National Road Carriers Association

PROTECTING YOUR BUSINESS AGAINST THE INVISIBLE THIEF

By Justin Tighe-Umbers, CEO, National Road Carriers Association

Justin Tighe-Umbers

INFLATION. ONE WORD THAT CAN REACH INTO THE POCKETS OF

every New Zealander and rob us of our hard-earned cash. Inflation quietly sneaks up on us with increasing prices and cost of living pressures, making it harder for consumers to make ends meet and business owners to manage costs and maintain prices.

With inflation running at 7.3%, a 32-year high, for the June 2022 quarter (Statistics NZ) it’s reasonable to ask: what’s driving the numbers? Recent high prices for petrol and diesel, the transport sector was a significant contributor to our rising annual inflation – petrol increased by 32%, the largest annual increase since 1985.

And it looks like we may be in a waiting game. According to Infometrics Principal Economist Brad Olsen, until the United States get a grip on inflation “our imported inflation into New Zealand remains high, and it makes it much more difficult here at home to get inflation under control.”

Where does this leave the transport industry?

There has been some good news of late. Supply chain issues have been easing with the Freightos Global Container Index (FBX) decreasing from a high in September 2021 of nearly $11,000 to $4,262 in September 2022.

Statistics NZ reported economic activity rose 1.7% in the June quarter as measured by gross domestic profit (GDP). The transport sector significantly contributed to this rise with a 19.7% increase in the June quarter (9.6% annual), suggesting strong economic activity across the sector.

But there is no denying that there will be a bumpy road ahead for transport operators in 2023. Plenty are getting ahead of the game – here at NRC we’ve already seen a sharp increase in demand for our cost management services, from members and non-members alike. We see everyone from operators running hundreds of trucks right through to fresh-eyed newbies wanting to make sure they can pay off their new rig.

We recognise many business owners are back on the tools, driving due to talent shortages and a need to muck in just to keep the wheels turning. Where to start, is a common question so NRC suggests taking stock of a couple of key aspects initially. Firstly, with fuel costs making big moves, make sure you have your fuel adjustment factor (FAF) sorted. Not sure you’ve got it right? Then reach out to the NRC team who are more than happy to provide advice and assist.

Secondly, rising costs are having an impact across the board, so its critical transport operators understand the core costs affecting their business, both now and into the future. NRC’s Cost Model takes a look under the bonnet at your delivery costs. It helps predict costs up to 12 months ahead – and works for any size transport business, from single vehicles to large complex fleets.

Owners can look at different cost scenarios and make informed choices that keep delivery contracts profitable. It’s a simple process, it takes just 10 minutes to crunch the numbers once you have the data needed. In most cases, you’ll get your personal cost report within two business days. So, take the first step to keeping the invisible thief at bay, and call the NRC team.

For more information go to https://www.natroad.co.nz/ or call one of the team on 0800 686 777. T&D