There’s no denying we’re starting to see some collateral damage appearing from what has proven to be an immensely sustained reduction and recalibration of freight volumes across the entire sector, writes Blake Noble.

One only needs to troll Trade Me and observe the mountain of keenly priced gear looking for a new home that would ‘routinely’ get spoken for in a flash, yet in this market, it remains homeless.

Anecdotally, it just looks and feels so quiet in the world currently, despite how upbeat the likes of ANZ’s Truckometer are; the recent stints I’ve had in-cab at both ends of the country have been noticeably devoid of the volume of heavy fleet on-road and congestion at freight terminals and the like, the latter more often being a blessing, but at this time of year, it leaves more of an eerie impact. The number of parked units lining the streets (an issue for another day) is also painful for all to see. This is meant to be prime time…

It would be truly glorious if costs dropped in line with volume reductions, but alas, no such law exists, and costs seem as persistently buoyant as ever. It doesn’t seem to have stopped some pretty exciting numbers being thrown around by certain operators for trip rates, though; some interisland rates I was recently quoted appeared to be straight out of a rate card from the 1980s, such was their lowness, but alas, they were as current as you like. It seems that too many operators just want to get home at any cost and overlook the damage done by the proposal and acceptance of rates that are literally below cost. I can see an old NZTA/police ad campaign rehash now – “If you offer ridiculous rates without truly knowing your costs, you’re a bloody idiot.”

But, in all seriousness, there are some alarming rates out there. If you’re unsure where things should stand or are unclear on how to cost where your operation needs to be, reach out to your favourite association – they all have access to superb cost modelling that’ll get you on the right track, even if it does provide an initial shock when you realise what you might’ve been leaving on the table (or the reason others have been pricing the job like they have). I suspect a fair amount of naïve optimism still exists in some quarters – “The rate is $100, I reckon I can do it 10% more efficiently than all of these experienced incumbent operators, so I can definitely do it for $90” – buggering the fact there might actually be $95 of fixed costs in there. With access to so much telematic and cost data on every movement of our units, there really is no excuse not to be across the basics.

Speaking of associations, I want to credit Transporting New Zealand on the recent appointment of Cameron Bagrie as its inaugural independent chair, a significant manoeuvre in the industry body’s quest towards sound governance. For those unfamiliar with the concept, the appointment of an independent chair, as opposed to a chair, indicates that in Bagrie’s appointment, they’ve selected someone who has no bond or ties to the stakeholders, and who is able to think and act for himself. This simple step (albeit involving a significant amount of legwork) to appoint someone with no industry allegiance of baggage, whether real or perceived, is huge and will hopefully lay a platform for a genuinely unified approach to achieving their objectives.

Finally, to circle back to my original message, it’s worth reiterating that it is tough out there right now – it doesn’t matter what size or shape the business is, chances are they’ll be doing it tough. My personal exposure to a range of transport-related companies, from the very small to the very large, shows me that we’re all well and truly in the trenches. I know firsthand the mental gymnastics that go on in one’s head when you post a challenging result for the month, quarter or year, and the navel-gazing that ensues. I’m a big believer in using these periods to thoroughly review and reassess how you’re doing things and looking for the opportunities within, but most importantly, looking after yourself and your teams and ensuring you are fighting fit, mentally and professionally, as much as anything.

I’ve mentioned it on several occasions in this column, but don’t be a stranger to others in the industry (or peers from other sectors); connect with other business owners, your local industry association rep, whoever you trust to vent to – chances are you’ll feel better airing where you’re at. Maybe they’ll give you the right steer to ensure you don’t shoot yourself, or others, in the foot with some of that naïve optimism!