This week an article citing the most recent Centrix Credit Indicator report was published, which revealed liquidations in the transport sector were up 52% over the previous 12 months, higher than even construction (38% up) and hospitality (49% up).

For those of us in the industry, this comes as no surprise, as we witness the fallout around us every day. At NRC we continue to help our members on a daily basis as some juggle reduced customer demand and cash flows, and holding on to staff and equipment.

So I am the first not to bat away the realities of this pain faced by so many transport operators with an empty “things will get better”. For the 154 kiwi companies behind the 52% increase of liquidations clearly they are not. 

But there seems to be a shared sentiment among economists and commentators that the worst is behind us.  Speaking to the Port of Auckland this week, it seems that recently container volumes have been consistently up. It may be too early to tell if this is a positive indicator for the wider economy, but I will be watching with interest.

Another glimmer of hope is the 50-basis point reduction in the official cash rate this week. This will start to play a part in freeing up cash flow in the economy over time.

For those transport operators that are continuing to struggle to make the numbers work – don’t tackle it alone. Call our team at NRC who are specialised transport experts, and they can help you work out a path forward.

Government procurement rules being optimised

Keeping on the positive, the government has announced a shake up to procurement rules which will take effect 1 December. Government contracts a significant amount of transport work, not least among roading projects, so these changes will be welcomed by transport operators bidding for public contracts.

Finance Minister Nicola Willis said “We want to see taxpayer money supporting Kiwi businesses to grow, hire, and thrive.”

Among the improvements, government has said extra weight will be given to factors such as using kiwi businesses to deliver contracts, and looking at how the proposal benefits the economy, whether national or regional. 

NRC will be calling for the changes to government procurement to extend to ensuring that the rates paid to transport operators are enough to cover the true cost of meeting regulatory compliance. It is well documented that recent economic pressures have seen an increase in non-compliant operators undercutting law-abiding transport businesses by cutting safety corners such as certificates of fitness. We want government to lead the way in procuring quality, compliant transport operators. 

The new rules will apply to all goods, services and refurbishment contracts worth more than $100,000 and all construction contracts over $9 million.

Northport consents to expand port granted after a decade’s work

The Northland economy will be buoyed by the news last week that the Environment Court has granted consents for Northport’s plans for expansion at Marsden Point. 

National Road Carriers presented in favour at the hearings, Northport is a critical part of the freight and supply chain for Northland and the local economy. Having the capacity to meet future growth is essential. The port can now move forward with plans to build a dedicated container handling, storage and logistics facility.

This should not have taken over 10 years of work to reach this point. Let’s hope the fast track consenting legislation means these kind of delays are left behind in the past

for our important transport infrastructure.

My warm congratulations to Northport CEO Jon Moore and the team at Northport –  your hard work has paid off.

Justin Tighe-Umbers, Chief Executive, National Road Carriers Assn