NZ online retailers profits hit by delivery companies’ surcharges

Reflecting a similar issue the world over, New Zealand online retailers are complaining that delivery companies’ surcharges are impacting their businesses.

Speaking to Stuff.co.nz, New Zealand online retailer director Corinne Callinan said, “NZ Post’s … surcharge will put more strain on businesses, many who are already struggling in the Covid environment.”

Greg Harford, CEO of industry body, Retail NZ said that online retailers are heavily dependent on delivery firms, especially with the strong growth of e-commerce.“Retailers are operating on very tight margins, and while they may be able to absorb cost increases in the short-term, it’s inevitable that they will be passed onto consumers in the long-run,” he said.

The surcharges levied by delivery firms include those to cover the expenses of personal protection equipment. New Zealand Post has seen profits grow strongly but say that this is not due to increased parcel volumes.

Aramex chief executive Mark Little said the courier company implemented a “critical service continuity surcharge” of 2.3 per cent from April 1 to help recover costs that were in excess of business as usual.

“The surcharge allows us to continue operating by scaling up our resourcing, increasing staff, providing courier franchisees with cover if they are unwell or required to isolate and continue delivering the best possible service for our customers,” he said.

“The cost of upscaling our business overnight to meet demand has had a dramatic effect and is something that the increase in parcel volumes does not offset. We as a network have absorbed these costs. However, it is no longer sustainable for our business to do so.”

This may be a symptom of inflation rising across the Global North as suppliers drive retailers prices up, ultimately impacting on the cost of living and businesses’ bottom lines.

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