Trucking Industry Faces Challenges Due to Rising Fuel Costs

According to an industry association, soaring fuel prices could threaten the viability of some trucking businesses in Aotearoa.

The ongoing conflict in the Middle East has disrupted the Strait of Hormuz, a crucial shipping route, resulting in unstable oil prices. Recently, oil prices surged beyond US$100 per barrel.

This increase in oil costs is projected to raise the prices of goods, particularly since over 90 percent of freight in Aotearoa is transported by road.

The New Zealand Trucking Association reported that fuel expenses have overtaken labor costs as the largest expenditure for trucking companies, now comprising 30 percent of operational costs. This marks an increase of about 8-10 percent since the recent tensions in the Middle East began.

David Boyce, CEO of the NZ Trucking Association, expressed his concerns in an interview, stating, “It’s quite challenging out there… For some, this could be the tipping point.” However, he added that the industry has shown resilience and many will hope this situation is a temporary challenge.

Boyce noted the significant fluctuation in diesel prices, which jumped 35 percent just this week. He emphasized that the rapid rise in costs would soon affect consumers. “Transport operators have minimal capacity to absorb these costs, so they will need to pass them on to customers immediately,” he explained.

Despite these challenges, Boyce remains optimistic about diesel supply, indicating that New Zealand currently has about 25 days of diesel stock, with an additional 29 days worth on the way. “Provided there are no disruptions or unforeseen events affecting supply, we should be fine,” he stated.

On another note, the Commerce Commission is increasing its oversight of fuel prices, ready to address any questionable pricing practices. Commissioner Bryan Chappel emphasized the Commission’s readiness to identify unjustified price hikes at gas stations and urged consumers to utilize tools like the Gaspy app for price comparisons.

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