Ferry fuel surcharge will disproportionately affect farmers, says transport leader

Late autumn is a busy time for moving livestock between the North and South Islands, and dairy farmers have Moving Day coming up on June 1.

By Monique Steele of RNZ

An industry leader in livestock transport has described price hikes for freight crossing the Cook Strait as coming at the worst possible time of year for farmers.

Late autumn marked a busy seasonal period for the movement of livestock between the North and South Islands, particularly for cattle, as dairy farmers approached the end of the season and autumn bulls were sold and moved.

Farmers already struggling with extra fuel and fertiliser costs due to the war in the Gulf would face even higher livestock transport bills for crossing the crucial New Zealand strait.

KiwiRail increased its monthly fuel adjustment factor (FAF) for commercial operators using its Interislander ferry to 54% to cover increased fuel costs.

Bluebridge’s FAF was currently at 37%, after peaking at 48% last month.

Several South Island transport companies moving livestock, apples and wine said they were wincing at the new fees they expected to have to absorb.

They expected fresh produce to be most impacted, as well as wine from Marlborough and livestock.

FAF increase ‘bad timing’ for dairy farmers

National Livestock Transport and Safety Council chairman Derek Foley said herds were shifting through late April and May, largely due to new farm or herd purchases and winter planning.

“There’s probably 50 or 60% more livestock transitioned over the ferry in this period of time through to early June than any other time through the year,” he said.

“So this is really bad timing to put a catch-up FAF on, disproportionately affecting the farmers.”

Part of the Foley Transport empire in Waipukurau, he said dairy farmers would be particularly impacted in these busy months, ahead of more localised Moving Day movements on June 1.

“It’s a discussion that a lot of carriers are going to have over the next week or two as these movements start, and I suppose the washout of that’s going to be extremely more expensive cartage on the ferry for the dairy farming industry that’s transferring stock down South Island.”

Foley said transport companies and freight forwarders enforced their own weekly fuel adjustment factor early on in the war in the Gulf - which he described as “evenly spread”, peaking at 41% but now down to 27%.

He said ferry operators increasing their surcharges only now, and at a comparatively high rate, would disproportionately affect rural cartage.

“Because the ferry companies are trying to recoup cost from earlier increases they hadn’t done by applying a weekly FAF to their services, it sort of disproportionately impacted rural transport; that’s the issue.”

He said the Interislander surcharge could cost farmers an extra $500 per sailing for a couple of hundred cattle from north to south, for example.

In a statement on Tuesday, Rail Minister Winston Peters told RNZ the Interislander should not be expected to absorb fuel price increases.

Ferry availability already ‘concerning’

Several livestock firms speaking with RNZ said availability of the ferries was extremely challenging at present, with further disruption expected.

Foley said it was working with the ferry companies to manage the Kaiārahi being temporarily out of action for maintenance from next month.

“There’s a couple of issues with the strait; obviously, there’s the lack of services and the concern with the maintenance programme that’s going to be put in place, so it’s even going to be less.

“So scheduling livestock to get over and manage the welfare around that is pretty concerning.”

Foley said a couple more ferries and better competition were needed.

“We can’t control that, but that’s our dream.”

- RNZ