Team Global Express NZ chief executive Stewart Smith has confirmed job losses for staff across the country and in its main Auckland customer support office.
“Like any business, we must adapt to changing customer needs and set ourselves up for the future,” he said.
“This has led to a change in some roles in our branches and at our Support Office in Auckland which we are currently working through. We can confirm there will be an overall reduction in team member numbers.”
An estimate from the Rail and Maritime Transport Union earlier this month was that 170 jobs were on the line, but Smith said the final amount was “a fraction” of this.
He could not confirm the actual number as it was still to be finalised.
Union general secretary Todd Valster said it was not a good sign for the industry.
“It’s not a good sign that a reasonably significant transport operator in New Zealand is winding back.”
But Smith said the changes were about meeting customer needs and minimising duplication of some tasks across multiple sites.
Williams & Wilshier Transport managing director Warwick Wilshier who is also the chair of Transporting NZ said everywhere you looked things had slowed for freight and logistics companies.
“The rural sector, for example depending on which part of the country you’re in, there’s lots of grass and so people aren’t buying maize for stock food. Traditionally, we’d be seeing all of those carriers that are carting maize and fertiliser out, but they’re not busy.
“The livestock sector, same, meat prices have dropped and the demand has dropped a bit so they’re not overly busy either… so they’ve just got everybody on 40 hours a week or reduced hours, using annual leave and stuff like that, it’s quite tough.
Wilshier’s company carts logs, something he said had also slowed down.
“We rely pretty heavily on the export markets, and particularly China, and their construction sector’s not flash at the moment so their consumption is probably half what it normally is.
“And typically what happens is the export log prices drop pretty quickly and we have to reduce so we’re just facing that now. The big companies and the big forest estates are giving signals now that we’re going to be reducing production, maybe 80 percent or so which means four days a week I guess, or just generally reduced.”
He said trucking companies had worked hard to build up a workforce for years and many would not be laying drivers off if they could help it.
“Truck drivers are so precious and have been in short supply. We’ve struggled with it since Covid and so we go out of our way to look after everybody and make sure they’re the least affected.
He said many had gone into their leave balances as they had been used to working more hours than were currently available.
Last week’s NZ Institute of Economic Research Quarterly Survey of Business Opinion showed an overall slump in business confidence, with weaker demand and high interest costs wearing companies down.
Transporting NZ chief executive Dom Kalasih said while the sector was not seeing masses of companies falling over, there was a sense of “people are just getting by”.
“And usually a reasonably good indicator of that, for me anyway, is the number of people that typically do management roles, but are out driving trucks at the moment.
“So what’s happened is they have reduced the staff and now the people in the office, they’re actually just filling in those gaps by driving trucks at the moment.”
Kalasih said those in the transport and logistics sector would be wise to undertake risk assessments and brace for the “quiet” to continue for a while yet.
“Some will be probably more exposed to being acquired by other companies as well, I think we’d be naive not to expect it, particularly if these conditions continue then that risk is just going to be growing – although maybe I should say opportunity for others.”
He said the slowdown was also being seen through a non-renewal of Transporting NZ memberships.
“Quite a few of the memberships that aren’t being renewed are due to people retiring. So there might have been some people that might have thought a couple of years go on, I’ll go on until I’m 67 or 68, but with this downturn, it’s more likely that some of those will retire earlier than what they intended to.”
The Port of Tauranga described its six months to December as “challenging trading conditions”, when it reported its interim result.
“Earnings were impacted by lower overall trade volumes, especially in imported and transhipped containers, and higher operating costs, including rail charges,” its report to the NZX said.
“Total trade volumes reduced 8.5 percent compared with the first half of the 2023 financial year.”
Transport company Freightways’ half year results described “continued lower same-customer volumes” and “a slowdown of some of our customers”.
Similarly logistics company MOVE reported “economic and sector headwinds” for the same reporting period.
“With inflationary cost pressures and subdued customer activity, particularly for freight and warehousing. The retail and construction markets have been particularly hard hit, both of which are important customer sectors for MOVE,” the results explained.
MOVE chief executive Craig Evans told Newsroom businesses should look to slow down their supply chain.
“For most businesses, faster and smaller deliveries just in time is just an added expense. Most products aren’t even used within the first week of delivery. By utilising alternative modes of transport, such as shipping and rail which often only take a day or two longer, we can deliver larger loads in a timely manner, while reducing costs to our customers and benefiting the environment.”
Wednesday’s inflation figures signalled higher interest rates were likely to stick around, despite the annual rate down to 4 percent, the lowest since June 2021.
The Reserve Bank, however had anticipated it to be at 3.8 percent for the March quarter. It held the Official Cash Rate at 5.5 percent last week. That will next be considered on May 22.
