KiwiRail<\/a> does not receive fuel subsidies, so prolonged periods of elevated fuel prices must be actively managed to ensure services remain financially sustainable over time.\u201d<\/p>\nTransporting NZ chief executive Dom Kalasih said the fee would be imposed on companies transporting a huge variety of goods.<\/p>\n
\u201cThat could be anything from furniture, some grocery stuff, could be some livestock \u2013 basically every commercial truck [that] travels from north to south, and vice versa, will be paying this additional fee.\u201d<\/p>\n
Kalasih said it\u2019s likely transport companies will have to pass these costs on to businesses, who will in turn pass that on to consumers.<\/p>\n
\u201cMore than likely they\u2019ll be paying higher rates for that transport than they had originally intended, so then they will have to make the business decision, so that they can remain financially sustainable, as to how they manage that increased cost.<\/p>\n
\u201cUltimately, I suspect, all of this stuff, will flow to a consumer.\u201d<\/p>\n
Kalasih said just how much Interislander\u2019s increased fuel charge will affect New Zealanders depends on the product being transported.<\/p>\n
Many transport companies have been imposing their own fuel surcharges through fuel adjustment factors because of the soaring fuel prices, Kalasih said.<\/p>\n
New Zealand Shipping Federation executive director John Harbord said the ferries had been hit by significant diesel cost increases.<\/p>\n
\u201cThe Cook Strait ferries, at the moment, are spending approximately about $600,000 more a week on diesel than they were previously, and so you know they can\u2019t absorb that amount of cost increase themselves.\u201d<\/p>\n
\u2018Completely standard\u2019<\/p>\n
KiwiRail and Peters, the minister, declined to be interviewed for this story. However, in a statement, Peters said Interislander shouldn\u2019t be expected to absorb fuel price increases.<\/p>\n
\u201cThere isn\u2019t a trucking firm in the country that would be prepared to absorb fuel prices increasing, so why would the Interislander be expected to do that?\u201d<\/p>\n
![\"Winston]()
Winston Peters. Photo \/ Mark Mitchell<\/p>\n
He said Interislander was taking steps to keep costs low, but no transport business could control fuel prices, which was why fuel adjustment factors existed.<\/p>\n
\u201cIt is completely standard in the transport industry to adjust rates based on fuel prices \u2013 so standard, in fact, that Bluebridge adjusted theirs a few weeks ago and Interislander is following suit.<\/p>\n
\u201cWe were briefed on the planned increase for the month of May and were assured that these increases are tied to the freight customer share of Interislander\u2019s fuel operating costs.<\/p>\n
KiwiRail\u2019s Wilson said fuel prices remained \u201cvolatile\u201d, KiwiRail recognised it was implementing a large monthly increase and it would continue to monitor fuel prices.<\/p>\n
She said commercial customers had been told last Thursday of the increase. The adjustment was being set monthly and could go up or down, depending on fuel price changes \u2013 though when prices fall, there could be a lag before that flows through into prices.<\/p>\n
Wilson said at this stage, KiwiRail was not making more regular price increases.<\/p>\n
\u201cKiwiRail is monitoring the situation and making every effort to continue to absorb cost increases across a monthly period to provide certainty for customers.\u201d<\/p>\n
International surcharges could cause \u2018massive\u2019 cost<\/p>\n
Harbord, the Shipping Federation boss, said Maersk\u2019s 27% fuel surcharge would also result in increased costs for businesses and consumers.<\/p>\n
He said if the shipping giant was charging hundreds of extra dollars on each container it moved in and out of New Zealand, that would put pressure on both importers and exporters.<\/p>\n
\u201cIf you think about the implications of that, in that 99% of New Zealand\u2019s import and exports are moved by ship, that is a massive increased cost on the New Zealand economy.\u201d<\/p>\n
Lisa Coleman, director at New Zealand freight company Rocket Freight, said fuel surcharges for international shipping were changing rapidly because of the uncertainty of global fuel prices.<\/p>\n
She said all international shipping companies were imposing extra fuel costs, through different mechanisms, and under different names.<\/p>\n
Usually, rates are set every few months but now they are changing every couple of weeks.<\/p>\n
Coleman said companies \u2013 even if they had allocated fuel out months in advance or were in transit \u2013 were trying to safeguard themselves if they couldn\u2019t get the product, or the cost increased.<\/p>\n
\u201cI absolutely think it\u2019s going to keep going up, it\u2019s going to keep going up until it becomes unsustainable \u2013 I am very prepared to see covid level freight costs, which was ten times the cost of normal freight.\u201d<\/p>\n
Coleman said ultimately this meant higher prices for products on the shelves.<\/p>\n
She said Australia was seeing 50% fuel surcharges added to local transport services from international shipping companies.<\/p>\n
Finance Minister Nicola Willis said the Government had been monitoring global shipping costs.<\/p>\n
Willis said the impact would be different, depending on the exporter.<\/p>\n
\u201cThis is what we are talking about when we talk about the secondary impacts that come through for overall inflation \u2013 it\u2019s not just how much the petrol price increases, but it\u2019s how this conflict in the Middle East puts price pressure on across the board, that eventually gets reflected in our economy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A fuel adjustment factor has been described as a surcharge, added on top of a base freight rate,…\n","protected":false},"author":2,"featured_media":412564,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[15408,138,3088,5499,22191,2082,2678,114726,111,139,69,39995,16743,6861],"class_list":["post-412563","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-almost","tag-business","tag-commercial","tag-doubles","tag-ellen","tag-for","tag-fuel","tag-interislander","tag-new-zealand","tag-newzealand","tag-nz","tag-odwyer","tag-surcharge","tag-vehicles"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/412563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=412563"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/412563\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/412564"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=412563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=412563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=412563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}