{"id":2186,"date":"2022-04-14T00:00:00","date_gmt":"2022-04-13T12:00:00","guid":{"rendered":"https:\/\/staging.farmersweekly.co.nz\/carriers-feeling-the-heat\/"},"modified":"2022-05-03T06:27:06","modified_gmt":"2022-05-02T18:27:06","slug":"carriers-feeling-the-heat","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/news\/carriers-feeling-the-heat\/","title":{"rendered":"Carriers feeling the heat"},"content":{"rendered":"Reading Time: <\/span> 3<\/span> minutes<\/span><\/span>

Alliance Group chief financial officer Kristian Saksida said as a red meat processor and exporter, it is acutely aware of the rising costs and pressures of operating a business.<\/i><\/p>\n

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Livestock carriers are coming under increasing financial pressure and some in the industry say unless changes are made to help alleviate that, more transport companies will be forced to follow the example of Wairarapa-based Pinfolds, which recently announced it was shutting its doors after 102 years of business.<\/p>\n

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Mangatainoka-based Beale Transport director Regan Beale said there are a range of different burdens that livestock carriers are currently having to deal with.<\/p>\n

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One of those is because of space restrictions at meatworks, processing companies are filling trucks with small loads from multiple farmers, so truck drivers are having to drive greater distances to fill their trucks, rather than just stopping off at one farm.<\/p>\n

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\u201cThey (processors) want to keep farmers happy but it comes at our cost,\u201d Beale said.<\/p>\n

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\u201cInstead of (carriers) being able to go to one farm to get a load of sheep out, they\u2019ll (processors) split the load between say five (farmers), which means we\u2019ve got to do a lot more kilometres to get a load but we\u2019re paid the same money (per animal carried).\u201d<\/p>\n

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\u201cThat means we\u2019re losing money out the bottom every single time.\u201d<\/p>\n

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He does not blame farmers for wanting to move whatever stock away they can.<\/p>\n

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\u201cI know that a lot of farmers have got our backs but from what some of them have said to me, things are tight and even if it\u2019s a pain in the bum for them, if someone\u2019s going to turn up and take 50 lambs off their hands, they\u2019d rather see 50 go than none at all,\u201d he said.<\/p>\n

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\u201cFrom their point of view, they have to take what they can get.<\/p>\n

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\u201cI understand that, but we still get paid the same per lamb that\u2019s going to the works and instead of that lamb going from point A to point B, we\u2019re going around four or five farmers to make that load up.\u201d<\/p>\n

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He says as well as the fuel cost, there\u2019s also a time cost.<\/p>\n

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\u201cIt\u2019s not sustainable and they (processors) know that,\u201d he said.<\/p>\n

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Beale said out of all those involved in the supply chain \u2013 farmers, stock agents, carriers and processors \u2013 it\u2019s the carriers who wear most of the cost and risk.<\/p>\n

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\u201cBut when we ask for a 10% increase to cover costs all hell breaks loose because of the idea that we\u2019re trying to rip people off,\u201d he said.<\/p>\n

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\u201cThat\u2019s not the case at all.\u201d<\/p>\n

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He said until farmers realise some of the pressures that stock carriers are under, and he does not want to say that it\u2019s farmers\u2019 fault, in the future they will find that a 10% increase in the carrying price wasn\u2019t too bad after all.<\/p>\n

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\u201cBecause they won\u2019t be able to get anyone to move their stock or cart their grain or fert,\u201d he said.<\/p>\n

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He also takes issue with meat processor Alliance\u2019s 90-day payment policy, saying accounts need to be settled more quickly than that.<\/p>\n

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Unless there are changes to help meet some of the challenges carriers are facing, he said other stock transporters will be forced to close.<\/p>\n

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Alliance Group chief financial officer Kristian Saksida said as a red meat processor and exporter, it is acutely aware of the rising costs and pressures of operating a business.<\/p>\n

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\u201cThat\u2019s why earlier this year we introduced a FAF (fuel adjustment factor) to lessen the impact of volatility in the fuel market on operators,\u201d Saksida said. <\/p>\n

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\u201cThe FAF acknowledges the cost impact of fuel price changes, as well as the challenges of seasonal variations in volume. <\/p>\n

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\u201cWe believe the increase strikes a balance between recognising the increased fuel costs and allowing us to maintain a sustainable and profitable cooperative for our farmers.\u201d<\/p>\n

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He said Alliance\u2019s payment terms policy for suppliers of goods and services is aligned with its own cash cycle.<\/p>\n

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\u201cWe have to pay for stock, incur the costs of processing, but don\u2019t receive revenue from our customers for a number of months,\u201d he said.<\/p>\n

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\u201cWe are always careful to ensure suppliers are aware of this payment terms policy from the outset.\u201d<\/p>\n

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A livestock transport industry insider, who did not want to be named, said farmers could help carriers by taking more responsibility for stock effluent, as the cost of dealing with it is a significant issue that could be addressed if farmers stood stock for longer to empty out before being transported.<\/p>\n

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He said setting up a truck wash costs more than $500,000 and his company spends $10,000 to $15,000 a month just to wash trucks out.<\/p>\n

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\u201cIt\u2019s $300 to $400 each time you have to wash out,\u201d he said.<\/p>\n

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\u201cAnd if you have to do that after every load, you\u2019re going backwards.\u201d<\/p>\n

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He said stock needs to be stood off feed for at least six hours and for early delivery, same day kills, it needs to be the night before.<\/p>\n

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\u201cFarmers think the longer they leave stock out on feed they are going to get extra grams, which might make them a couple of extra dollars but basically it\u2019s just pinching from us, because it costs us,\u201d he said.<\/p>\n

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He said rates paid by meat companies to carriers to transport stock need to be increased and although are not the only pressure point for trucking companies, for some they will be the straw that breaks the camel\u2019s back.<\/p>\n

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\u201cThere\u2019s going to be more livestock (carrying) companies going under within the next 12 months,\u201d he said.<\/p>\n

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\u201cI guarantee it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Livestock carriers are coming under increasing financial pressure and some in the industry say unless changes are made to help alleviate that, more transport companies will be forced to follow the example of Wairarapa-based Pinfolds, which recently announced it was shutting its doors after 102 years of business.\n","protected":false},"author":19,"featured_media":281,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[3],"tags":[21,96],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t