Transporting New Zealand has welcomed a Budget announcement of substantial funding increases for roading and infrastructure projects, but warned that many operators are facing tough times.
“Roads in New Zealand have been desperately underfunded for decades so new investment in highways, including national and regional roads of significance, is desperately needed,” says Transporting New Zealand interim chief executive, Dom Kalasih.
“Kiwis can’t continue to put up with deteriorating roads that are jeopardising economic growth, which is vital for the community and businesses.”
Mr Kalasih says investments in transport and tax relief will be welcome news to Transporting New Zealand’s members. The Government has pledged $1 billion to accelerate land transport projects including Roads of National Significance, in addition to $20.7 billion already signalled in the Government Policy Statement on land transport.
Other transport investments include $939 million to repair roads damaged by last year’s severe weather events in the North Island, and $200 million for maintenance and renewals on the national rail network.
Another $1.2 billion will go to the new Regional Infrastructure Fund, and the government will also establish a National Infrastructure Agency.
Mr Kalasih says that road transport operators are reporting low demand and increasingly tough economic conditions.
“Transporting New Zealand is hearing from many members who have seen revenue drop significantly over the past few months. Many trucking firms haven’t seen the traditional post-Christmas uptick in business, with bulk and aggregate and logging operators some of the worst affected.”
Transporting New Zealand account manager, Lindsay Calvi-Freeman says members across the lower North Island are reporting decreased revenue.
“I’ve spoken to members with their revenue down 40% on last year, and others who have been forced to lay off staff, the last thing anyone wants to be doing. Fortunately, there are a reasonable number of operators reporting reasonably steady demand, but almost everyone has noticed an impact.”
Fellow account manager, Odette Geyer says the pain is being felt across the supply chain.
“We’re seeing an increasing number of liquidations, as the cost of lending and reduced business confidence starts to bite. Last week we saw three transport liquidations announced in three days. The road freight industry also supports a whole range of suppliers, and so tough conditions for our members have a big flow-on effect.”
Vicki Harris, who manages Transporting New Zealand’s member benefits and commercial partners, says she has noticed an increase in members looking for savings across fuel, insurance and supplier services.
“It’s really tough out there at the moment. A lot of members are looking to cut expenditure and maximise their bang for buck. We’re seeing a good number of referrals through to Transporting New Zealand’s supplier discount schemes, including fuel and tyre retailers.”
Mr Kalasih says he’s confident the road freight industry will navigate the difficult economic conditions, as they have with previous challenges.
“Over the past few years, we’ve seen road freight operators successfully deal with the COVID pandemic and severe pressures on the supply chain, acute driver shortages and cost pressures, and now the dual challenges of an economic recession and continued inflationary pressure. Things are tough, but road freight firms are very resilient.”
