Big changes are com­ing

New Zealand Truck & Driver - - Feature -

LAST MONTH I HAD THE OP­POR­TU­NITY TO WRITE FOR THE FIRST time about the Road Trans­port As­so­ci­a­tion and our per­spec­tive. It was good to see in that edi­tion a num­ber of com­ments about folk in the trans­port sec­tor un­der­stand­ing how to make pric­ing changes, given the rise we’re see­ing in fuel prices…and how this will af­fect them.

There is a need to un­der­stand the whole con­cept of a Fuel Ad­just­ment Fac­tor (FAF). What was con­cern­ing how­ever, was that while ev­ery­one said you needed to do it….no one re­ally ex­plained how to do it.

The crit­i­cal thing here is that to do it you need to have con­tracts and terms of trade that spec­ify that when fuel prices change, you will be pass­ing these on.

Se­condly, you need to know your costs and know ex­actly the cost of fuel (as a per­cent­age of your to­tal cost), so that when you ad­just the FAF you only change the per­cent­age cost of the fuel.

For ex­am­ple, if your fuel cost is 15% of the to­tal op­er­at­ing cost and if fuel in­creases by 2% you only change the 15% by 2% (not the to­tal).

If you need help with this, the mem­ber­ship of RTANZ has ac­cess to area ex­ec­u­tives who can help. Also, on our web­site we have a tool to show you what you have to do and how to ap­ply the FAF. Please, if you are a mem­ber, check it out.

Last month I talked about what the RTANZ mem­ber­ship wanted from us as an or­gan­i­sa­tion, and I pro­vided some back­ground on the things we are do­ing to as­sist the mem­ber­ship.

I also said that we needed to have a voice around these is­sues to sup­port the mem­ber­ship – and I would like to draw to your at­ten­tion a good ex­am­ple of why this is so.

I be­lieve we’re about to see some sig­nif­i­cant changes in our in­dus­try. Not only will we be fac­ing a chang­ing sec­tor over the next few years, I think that some of the Gov­ern­ment’s pro­posed pol­icy will have a pro­found and far-reach­ing ef­fect on us. Ide­ally, we need a strong and sin­gle body or voice to deal with this.

One area to con­sider is the labour re­forms that the Gov­ern­ment is en­ter­tain­ing – namely na­tional awards and col­lec­tive agree­ments over en­tire sec­tors.

Don’t get me wrong, I think that we should have good pay rates and those in our in­dus­try are at­tracted by both the great con­di­tions and the pay – I just don’t think that na­tional awards nec­es­sar­ily de­liver this.

We don’t have the Gov­ern­ment set­ting the trans­port rates; we live in very com­pet­i­tive times so we need to have a mech­a­nism across the sec­tor to set wage rates to be able to man­age com­pet­i­tively and re­main prof­itable.

This is where your as­so­ci­a­tion can have a unique place. It would be even bet­ter if it was one voice and was seen as an au­thor­i­ta­tive body – so that it can en­gage on these is­sues.

If the sec­tor and the bod­ies ad­vo­cat­ing for them are seen as frag­mented, then we are start­ing on the back foot. This is a very good ex­am­ple of how we need to think about look­ing for­ward to the fu­ture, not back­wards to the past.

Go­ing for­ward, I don’t think we can just cruise along with

“busi­ness as usual” – we are not go­ing to be op­er­at­ing in “usual” con­di­tions: We are clearly op­er­at­ing in a chang­ing world.

This is go­ing to be huge for us and we must have an in­dus­try-wide strat­egy.

It is clear that change will hap­pen. But are we ready for it?

T&D

Road Trans­port As­so­ci­a­tion NZ chief ex­ec­u­tive Den­nis Robert­son

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