Wednesday, January 25, 2017

Cook Strait freight levy imposed due to earthquake transport links damage

Kaikoura MP Stuart Smith has backed an expanded coastal shipping schedule in response to increased inter-island commercial vehicle charges being introduced by KiwiRail across Cook Strait.
KiwiRail announced a 15.5 per cent earthquake levy charge in December as a result of the Picton to Christchurch road and rail link being closed for repairs following the Kaikoura earthquake in November.
KiwiRail expect inter-island freight volumes to drop by 50 per cent as a result of the main transport links on State Highway 1 and the Main North Line being closed for the next 18 months.
Toll Holdings have since announced a 3 per cent increase in freight charges to clients.
In an email to clients, Toll New Zealand business development and sales manager Roberto Brady said the company had no option but to pass this levy on from January 31.
"As a result we will be applying an extra 3 per cent to the existing surcharge, effective from this date," Brady said.
Brady said the decision was not made "lightly" but the company must be "responsible in terms of recovering our costs."
Several Marlborough small businesses have been affected by the new levy.
Bush's Honey manager Murray Bush said the increase had added 18 per cent to freight costs.

"Passing these increases on is never an easy exercise, so in the short term we just have to wear it," he said.
Geoffrey Sowman Funeral Services monumental manager Ken Rooney said the company had resisted passing on the extra freight cost to consumers.
The firm transported 200-300 tonnes of imported granite by truck and rail from Auckland each week.
Smith said the increased charges were a good opportunity to develop coastal shipping services.
Two coastal ships transporting freight between Wellington and Christchurch would be more efficient than using road in spite of the similar 10-hour travel times, he said.
Smith said coastal shipping was efficient and eliminated double handling of freight which is happening now using 'road bridging' where goods in containers are loaded on and off rail wagons at Wellington, Picton and Spring Creek and finally onto trucks for the final journey to Christchurch by road.
A coastal shipping schedule could use international shipping companies which are able to transport domestic freight en route to any port in New Zealand, he said.
A KiwiRail spokesman said the company had worked to provide flexible shipping options and services for the road transport network across Cook Strait since the earthquake.
"This will continue to be critical until State Highway 1 and the main north line are rebuilt and operational again for road and rail," he said.
In December KiwiRail proposed an earthquake levy for its commercial vehicle customers following a review of the impacts of the Kaikoura earthquake on KiwiRail's operations.
"This is in line with KiwiRail's commitment to continue to provide reliability, frequency and capacity across Cook Strait by offering customers multiple service options," he said.
The levy would be reviewed in June after feedback from clients and when road and rail links were more certain, with a final decision on the levy made in February.
KiwiRail had responded to the road congestion and launched a new coastal shipping service, NZ Connect, between Ports of Auckland and Lyttelton, he said.
It had also expanded its inland freight hub at Blenheim where rail freight carried by the Interislander can be transferred to road vehicles and trucked into Christchurch via SH7.
KiwiRail had also investigated using an Interislander ferry to operate a 24-hour service between Wellington and Lyttelton.
"It believed it is better to service current demand via Picton as the largest volumes at present are passengers and tourists," he said.
In an email to clients KiwiRail sales and commercial general manager Alan Piper said significant damage to the main north line had a "material impact on freight volumes by as much as 50 per cent on Interislander ferries."
"Until the MNL (main north line) is repaired and operational again, we expect rail volumes on our ferries will be 50 per cent lower than normal," Piper said.
Interislander had considered reducing ferry sailings, and reducing the ferry fleet, he said.
"Neither of these will be optimal for our customers who need the flexibility and capacity of regular time slots.
"We know that providing resilient services for the road transport network is more important now, than ever."
Late on Tuesday Toll New Zealand announced it was dropping the 3 per cent surcharge.
In an email the company said:
"As a result of KiwiRail's decision to delay the implementation of an earthquake levy on interisland freight until the middle of February 2017, Toll New Zealand has notified customers that it has withdrawn the 3 per cent surcharge it previously advised customers would come into effect on January 31.
"Discussions continue between KiwiRail and Toll and Toll expects that KiwiRail will reconfirm a possible levy and new implementation date in the next few weeks. Toll will advise its customer of any subsequent surcharge after these discussions have concluded."​
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