Transport costs hold groceries

Press, 7 September 1984, Page 4

Transport costs hold groceries

PA Auckland Grocery manufacturers are saving more than $2B million a year because of transport delicensing, says the executive director of the Grocery Manufacturers’ Association, Mr Ernie Newman.

“Savings in transport costs are one of the factors which have helped contain grocery bills during the last few months,” he said yesterday.

the savings accrued from increased competition between rail and road transport firms. A survey of association members showed that 20 respondents would save $20.2 million annually in the 10 months since transport licensing changes came into force. The benefits exceeded his members’ “wildest expecta-

tions”. Mr Newman said transport savings also gave grocery manufacturers improved export opportunities and allowed them to better face increasing competition from imports. “One interesting finding is that rail has retained 89 per cent of the freight it carried for our members before deregulation,” he said. Only 11 per cent shifted to road. Most of the savings came from the Railway Corporation’s reduction of rates to a more realistic level. Association members admired the way in which railways had responded to the new competition. “The consensus is that railways has improved vastly in its transit times, reliability, and attitude to customers,” Mr Newman said.