While we’re seeing some relief at the pump, fuel prices are predicted to rise then fall again, the economic down turn continues to bite in many other areas of New Zealand life.

What’s happening with the economic down turn in Wellington?

Everyone’s talking about the changes in Wellington.

With recent big changes, layoffs and redundancies in the public sector the impact on the vibrancy of Wellington is palpable.  Fewer people around simply means less need for lots of infrastructure, like cafes, retail and even transport. New ferry contracts cancelled or re-evaluated, has had a ripple effect on the region’s manufacturers and other suppliers.

What’s the impact on truck drivers?

New Zealand’s economy is currently experiencing subdued growth with a projected gross domestic profit (GDP) contraction of 0.2% for 2024. The economic situation in New Zealand overall also impacts truck drivers in many ways. An economic down turn means less demand for goods, which directly impacts freight volumes and so the trucking industry may be affected.​ When people spend less it means there is a reduction in demand, which filters through to many industries, including the ones who deliver the goods and freight.

What we have to be aware of if demand for shipping declines, competition among trucking companies may increase and therefore affect freight rates in the long term. Owner operators may be affected as their margins are usually tighter, yet fixed costs, like insurance and maintenance, stay the same. As well, trucking companies, like many other industries in an economic down turn, may face delayed payments. Where contractors hold up payments or don’t pay on time, adding to cash flow woes.

Some, though, might see more demand. For example, those who transport essential goods, like food and medical supplies. E-commerce deliveries, too, may be less affected.

Isn’t there a driver shortage?

It’s true, the trucking industry has been facing driver shortages and this may be the saving grace for truck drivers in an economic down turn. Where one employer may need to reduce shifts, others will be looking to employ more drivers. Efforts to attract foreign drivers have included a work-to-residence pathway but this pathway closed for new applicants in April. This may impact efforts to reduce the driver shortage and may strain the industry further.

Redundancies/lay offs

Economic stress in the home can take a toll on the mental and physical health of truck drivers. There may be redundancies or lay offs in the home. Financial worries increase pressure to do more trips, which can lead to driver fatigue. It also adds to stress levels to keep up with regular outgoings on less income.

It’s important for fleet managers to keep abreast of their truck drivers’ situations to help support their employees. And to also ensure truck standards, like truck washing and regular maintenance, are ongoing.