Napier Port passes insurance costs on to truckies

Napier Port passes insurance costs on to truckies | Insurance Business New Zealand

Napier Port passes insurance costs on to truckies
Two national associations are concerned by Napier Port’s announcement it will impose a levy charge on to transport operators collecting and dropping off freight to compensate for insurance premium hikes.

The exact amount of the levy has not been confirmed, but Napier Port did confirm to Insurance Business that the charge was down to its increased insurance costs.

Ports, like some businesses and insured individuals, are facing increased insurance premiums in the wake of the Canterbury and Kaikoura earthquakes, which have, among other areas, affected the ports in Lyttleton and Wellington.

The New Zealand Shippers’ Council (NZSC), that represents New Zealand’s major cargo owners, including many of the country’s biggest exporters and importers, has spoken out against the levy, calling the move “an alarming precedent.”

“What we’re seeing is a levy that lands on those who have no contractual relationship with the port, and therefore no ability to influence the outcome,” said NZSC chairman Mike Knowles.

“In our view, ports should either be absorbing those increased (insurance) costs as part of normal business activity, or negotiating them with their commercial clients – the shipping lines; not imposing them on parties who have no ability to review and negotiate rates,” Knowles added.

Knowles said the council acknowledged the pressure increased insurance premiums put on supply chain providers such as ports, but added placing a levy on to parties who don’t have a commercial relationship with the port is “not the way forward.”

“We are extremely concerned that this precedent may be adopted by other ports and (we) will strongly oppose any move in that direction,” Knowles warned.

National Road Carriers CEO David Aitken told Insurance Business that his members were very upset about the charges the port was introducing to cover its increased insurance costs. Aitken added that the road freight transport industry was not a customer of the port, and therefore should not incur its operational or business costs.

“Our members are simply delivering or collecting containers, and other freight on behalf of importers, exporters and the shipping companies,” he said. “The road freight transport industry is simply a service provider.”

Aitken said the port should pass the increases on to the shipping companies, if it “was not prepared to absorb the costs itself,” and not charge truckies who were already suffering from low margins.

“The port has picked on small local trucking companies as the line of least resistance,” he commented.

Aitken said some of its members would have their trucks in the port, “hundreds, if not thousands of times a year.”

National Road Carriers is the largest nationwide organisation representing the road transport industry. It has 1,700 members, who collectively operate 15,000 trucks throughout the country.

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