- Under ERP, the transport sector has been allocated NZ$20 million for decabornisation
- It is said that freight emissions are to be cut by 35% by 2035
- This will be done by deploying biofuels, hydrogen zero-carbon trucks and Zero-emissions shipping
Under the game-changing Emissions Reduction Plan of New Zealand, a NZ$20-million fund has been allocated to accelerate the decarbonisation of freight transport. This includes co-funding for low-emission freight projects through a dedicated round of the Low Emissions Transport Fund delivered by the Energy Efficiency and Conservation Authority and funding the Te Manatū Waka Ministry of Transport’s development of decarbonisation aspects of the National Freight and Supply Chain Strategy and other freight-related actions in the Emissions Reduction Plan.
It is said that freight emissions will be cut by 35% by 2035. It would be done by deploying biofuels, hydrogen, zero-carbon trucks and zero-emissions shipping.
Freight companies are still grappling with Omicron-related disruptions and have not yet paid attention to their emissions reduction plans.
Let us look at the freight stocks and how are they doing.
Source: © 2022 Kalkine Media®
Freightways Limited (NZX:FRE)
FRE is a leading freight company of NZ. On 9 May, it provided its trading update in which, it stated that its operations had been affected by Omicron. The update covers the impact of the Omicron variant and the general business environment. It stated that the Omicron variant had an impact on operations reflecting in the lowering of volumes and higher operating costs.
Over the months of March and April, Express Package volumes suffered and were down 2% over pcp. The Omicron spread also impacted the cost of operations as the staff had to isolate for 7 to 10 days and the company had to hire temporary staff to maintain operational performance.
During this period, it also implemented a COVID-19 wage premium to reward those working in tough conditions, incurred training costs and increased the use of temporary staff.
Also Read: How are these 3 NZX transportation stocks doing in 2022?
On 17 May, the stock was trading down 1.11% at NZ$10.68, at the time of writing.
Mainfreight Limited (NZX:MFT)
MFT is a leading logistics company with a YTD return of 21.32%. On 12 May, the Company announced that it would hold its annual meeting on 28 July 2022 which is a Thursday. The venue and other details of the meeting will be announced in due course. All director nominations should be received by 28 May 5 PM and the nominations will be made by the shareholders who are entitled to attend the Annual Shareholders’ meeting.
On 17 May, the stock was trading flat at NZ$72.70, at the time of writing.
Bottom Line: Freight Cos have to decarbonise by 2050. The companies are working on their plans and the time frame set out is 30 years. According to an estimate, freight volumes would increase by 33% and accordingly, emissions would also go up by 37%. If nothing is done now to curb them, it will be a major problem.