Closure of SH1 costing millions

The closure of State Highway 1 north of Kaiko¯ura costs the trucking industry an estimated $2.7 million a week.

The New Zealand Transport Agency (NZTA) claimed in May the earthquake-damaged highway would be open with ‘‘full functionality’’ by Christmas, but last week admitted that goal was months away and work would continue ‘‘well into 2018’’.

The closure of the road following the magnitude-7.8 earthquake in November has forced about 500 trucks – a 13-fold increase on preearthquake numbers – to each day take an alternative inland route between Picton and Christchurch that is longer and more costly.

Analysis by Stuff found the trucking industry faces a bill of up to $71m to use that route for another six months.

Trucking companies have seen daily costs soar by about $389,000 for drivers to travel via the Lewis Pass and Murchison rather than use the coastal route.

Extra fuel, wages and maintenance bills have triggered an average hike of 18 per cent in journey costs, up to 25 per cent in some cases – a financial burden often being passed on to customers.

Road Transport Association chief executive Dennis Robertson said cost pressures had left many ‘‘stuck between a rock and a hard place’’.

‘‘The margins and profitability that some transport operators were expecting they are now not getting,’’ he said.

‘‘The reality is that transport costs are a percentage of any product and the problem is that the end cost will have to reflect those costs.

‘‘Industry can’t pick that up or otherwise they would be out the back door. It is really tough for some of them, but others have been in a positive situation with customers to broker a new cost system.’’

Robertson said the opening of SH1 during the day by Christmas – but with some unsealed surfaces, lane closures, traffic control and potential temporary closures, NZTA confirmed last week – would create uncertainty for truck drivers, meaning they would avoid it. ‘‘If people think there are going to be more hold-ups and delays on the fixed State Highway [1] they will, even if it is more costly, use the alternative route because they know it’s reliable.

‘‘I just think it would be a much better option to delay it and have it done properly.’’

Road Transport Forum chief executive Ken Shirley agreed the closure had left some road transport companies ‘‘really struggling’’, with some facing cost increases of 25 per cent on the alternative route.

‘‘If your business is moving stuff you can’t absorb it. Margins are squeezed to the limit, whether it’s road charges going up or fuel increases – these are costs you just can’t control.’’