An efficient transport system is crucial for the New Zealand economy. It facilitates businesses delivering goods to consumers, retail stores and ports for export, and maintaining business competitiveness. The objective of this research was to understand the importance of transport costs as a proportion of total business costs, and examine the opportunities to reduce these costs for New Zealand businesses.
We selected three industries as case studies – the logging, flower and grocery industries – covering different operating conditions and types of goods.
Through interviews and the collection of cost data from businesses in each case study industry, we estimated the transport costs as a proportion of its operating costs and revenue. Transport costs as a proportion of revenue ranged from 15–25% for the logging industry, and 1–12% for the grocery industry. There was insufficient information for the flower industry to estimate transport costs as a proportion of revenue.
We found that most businesses were seeking transport cost savings wherever possible, especially where those costs were within their direct control. However, smaller businesses where transport costs were bundled within delivered goods prices had limited opportunities to manage those costs.
Finally, we identified for further consideration a number of transport policy opportunities that might reduce transport costs for New Zealand businesses.