NEW ZEALAND BUSINESS NEWS
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Freightways, the listed transport and logistics group whose courier brands move parcels and business mail around New Zealand and Australia, has reported double-digit earnings growth for the first quarter of its 2027 financial year. Revenue for the three months to September reached $408.3 million, up 17.6 per cent on the same period a year earlier, while net profit climbed 12 per cent to $26.2 million.
Operating earnings before interest, tax and amortisation rose 12.9 per cent to $50 million. The company attributed part of the revenue gain to higher fuel-recovery charges, VTFE, an Australian temperature-controlled transport business it has added, and continued market-share gains.
High fuel prices are doing double duty. They lift the surcharges Freightways passes through to customers, which inflates revenue, but they also drain the discretionary spending that drives a chunk of parcel volume. The company pointed to retail and hospitality spending in particular as the areas where households have pulled back.
The split in New Zealand express package volumes shows the effect. Total volumes rose 2.9 per cent, but volumes from customers already on the books rose just 0.3 per cent, meaning almost all the growth came from winning business from rivals rather than from the market expanding.
Within that, e-commerce volumes grew 24 per cent while retail volumes fell 1 per cent and health volumes dropped 3 per cent. Demand for pricier services, including overnight airfreight and temperature-controlled deliveries, also remained soft.
Customers are choosing slower, cheaper delivery over speed. At the company’s annual meeting, chief executive Mark Troughear said customers were happy to wait a day or two longer for road delivery rather than pay twice as much for airfreight.
The express package division lifted revenue 20.1 per cent to $346 million, but earnings rose a more modest 9.9 per cent, and its EBITA margin slipped to 12.2 per cent from 13.3 per cent. That gap between the revenue line and the earnings line is the cost of carrying more volume through cheaper road services while fuel-related charges inflate the top line.
The information management arm, which handles records storage and destruction, performed better. Earnings there rose 17.5 per cent to $9.4 million and the margin improved to 14.7 per cent from 13.2 per cent.
For small businesses that ship, the result points to a courier market with plentiful capacity, but a steep price for speed. A retailer or manufacturer weighing overnight airfreight against a road service faces a clear trade-off, and many are choosing the slower option.
The weakness in retail and health volumes is a useful read on where consumer and institutional spending sits. Businesses in those sectors should expect parcel activity to track their own sales rather than any broader market lift, because the growth Freightways is booking comes from taking share, not a rising tide.
Margin pressure in express packages also suggests fuel surcharges aren’t fully insulating carriers from costs. Businesses negotiating freight contracts may find more willingness to discuss service levels and routing than in a tighter market.
Freightways expects volumes from existing customers in both New Zealand and Australia to stay subdued for now. It said those volumes should improve gradually if fuel prices fall and remain lower.
The company sees potential for a stronger recovery in New Zealand, while Australia’s pace depends more on how quickly the wider economy there picks up.
Freightways reported revenue of $408.3 million, net profit of $26.2 million and operating earnings of $50 million for the three months to September.
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