What is Temporary Service Continuity Surcharge (TSCS)?

The Temporary Service Continuity Surcharge (TSCS) was introduced in late 2016 as a mechanism for helping cover significantly increased operating expenses caused by unforeseen events, such as major earthquakes, that result in road closures and other restrictions to our delivery network.   

We felt that adding a surcharge was a transparent method of sharing these unforeseen costs while providing the flexibility to adjust the figure accordingly based on conditions improving or worsening. It is a flat rate, which makes it easier for you to understand the cost impact on your business, as opposed to complex route-based permutations.  

The TSCS only relates to domestic products and services. It is applied to delivery base rates and is NOT added on top of other surcharges.

What is the current TSCS percentage?

View the current TSCS rate here.

How often does the TSCS percentage change?

The TSCS is designed to be removed or changed swiftly, for when the situations resolve or alter (for the better or the worse).  

The most recent TSCS percentage will always be listed here. This percentage will be in place for a full month – the aim is to have the next month’s percentage listed one week before it comes into force.  This allows you to plan for any financial impact associated with the TSCS.

Why does a delay to one part of our network cause operating costs to increase throughout? 

In order to deliver an item to any centre in New Zealand overnight, ALL the network components must operate to schedule. If one component of the network is shut down then vehicles in or out of any hub can be affected also.  

For example, if an aircraft from Christchurch to Palmerston North is delayed because a truck into the Christchurch hub is delayed, then all Linehaul out of Palmerston North to Napier, New Plymouth and Wellington would be delayed.  The same would apply to flights into Auckland for Hamilton, Bay of Plenty and the far North.  

Many of our customers rely on our overnight delivery ability, so when disruptions happen our top priority is to keep deliveries moving as quickly as possible.   Doing so may require adding additional vans and trucks to our Linehaul network, and the drivers to operate them. More vehicles in our Linehaul network mean that there must be more people at either end to handle the freight they carry, requiring additional staff and new hours.  

How do I work out how much it will cost me?

For example, if the base price is $10.00, VFF is 7.3% for the month and RUC’s is 3.5% and the TSCS is 1.8% then the total price would be calculated as follows: 

$10 x (7.3% + 3.5% + 1.8%) = $11.26

The extra TSCS cost for this example would be 18 cents.

For many New Zealand businesses – times are challenging. Why is it necessary to add costs to services in November 2021?

Over a period where many courier companies are struggling with service levels and taking weeks to deliver – New Zealand Couriers has worked hard and invested heavily to keep our customers’ courier items moving and service standards high.

We are the ‘final mile’ segment for many of our customers’ supply chains, COVID has hit our business with extraordinary costs – up till now, we have absorbed these costs. 

We understand our customers’ need for service continuity, at this point (November 2021) it is necessary for our customers to share some of the additional costs that COVID-19 has impacted on our business.

What are these additional costs and changes relating to COVID-19?

For the safety of our employees, our couriers, customers, receivers and the general public we have had to put COVID procedures in place, these come at a cost, as below:-

• ‘Distancing’ of personnel within our sortation and support teams has created more work and reduced efficiencies within our operations
• Reducing interactions between teams; creating ‘split-shifts’ so people are working at different times and related measures has created more work and reduced efficiencies within our business
• Costs relating to sanitising facilities; sanitising equipment; purchase of Personal Protective Equipment (PPE) etc
• It is a very challenging labour market – retaining our people and bringing on new team members to cope with increased volume in COVID conditions has come at a cost  
• Increased processing times have meant delays for some freight linehaul movements.  To safeguard our service levels, we have provided additional linehaul vehicles to move this freight and ensure it is delivered as swiftly as possible (rather than simply delivering late as other courier companies have done).
• Inflation and the cost of doing business is increasing at unexpected rates.  For us, the cost of moving freight is significantly more expensive than 6 months ago and the last 3 months have seen disproportionate cost increases 
• Unexpected surges in volume due to lockdown changes and different levels in different regions has meant we have needed to invest in additional equipment for sortation and movement of our customers’ freight – rocketing commodity prices (such as steel used for manufacture), is impacting directly on our costs
• Temporary labour where needed to support service standards
• Changes in Lockdown levels have meant massive variations in residential delivery volume – where and when necessary, we have invested in wage-drivers and rental vehicles to support these extraordinary delivery volumes.

Why is TSCS being applied nationwide when areas like the South Island are not in Alert Level 3?

Firstly, throughout our business, COVID procedures such as ‘distancing’ are in force to protect New Zealand and reduce the possibility of COVID outbreaks.  These procedures and safety measures come at a cost for all our branches and whole operation – regardless of the current Alert Level. 

Also, in order to deliver an item to any centre in New Zealand overnight, all network components must operate to schedule. If components of the network are impacted, then vehicles in or out of other hubs are frequently also affected.  

Labour shortages and remuneration changes have impacted nationwide, including our South Island branches.

But New Zealand Couriers had a General Rate Increase of 3.9% earlier in 2021, did this not cover these increased costs?

No, we have been hit by extraordinary cost increases – costs we did not budget for.

The earlier increase was to recover costs from the previous 12 months – we had a modest price increase as we were trying to buffer our customer base during challenging times – since then other transport companies have taken increases of up to 8% to the market.

Now, we are putting in a Temporary Surcharge to cover extraordinary costs (a surcharge that can be removed if these costs reduce).