Australian trucking industry hurt by rising costs

| Friday, July 11, 2008

The situation is all-too familiar: Truckers are feeling the pain caused by stagnant freight rates, increasing fuel prices and a reluctance by customers to add fuel surcharges to the cost of deliveries.

It’s not just a North American problem. The situation in Australia has reached dire straits according to trucking officials there.

Executive Director Steve Shearer of the South Australian Road Transport Association told the news agency Web site, www.adelaidenow.com.au, on Wednesday, July 9, that the industry could see a “calamitous collapse” in four to six months as more haulers go broke.

Diesel prices have increased by 100 percent since 2005 but customers still refuse to pay a higher rate, Shearer said.

Trucking groups have asked the government and businesses to work together to increase freight rates by 20 percent and implement a fair fuel-surcharge system or there won’t be anyone left to haul the freight.

In Australia, two-thirds of the industry consists of operators with four or fewer trucks. Owner-operators continue to be the most vulnerable, Shearer said. Trucks haul 85 percent of the freight in Australia.

Another component driving the issue of cost is a pending federal report on climate change that could cause the Australian government to impose more tax on fossil fuels starting in 2010.

The Australian Trucking Association announced July 4 that all truckers should be taking steps to pass cost increases and fuel surcharges to their customers.

“Many trucking companies are already struggling to cope with the rapidly rising price of diesel, which has gone up by 50 cents per liter since last October,” Australian Trucking Association Chairman Trevor Martyn stated in a press release.

Emissions trading – a form of tax on pollutants including fuel – could increase the price of diesel by another ten cents per liter, Martyn said.

“It is essential that every trucking company puts a system in place now to pass on increases in the cost of fuel,” he added.

Martyn says truckers should to do several things. First and foremost, they need to know their cost of operations. He said truckers should negotiate with customers for a freight increase, add fuel surcharges and refuse jobs that do not pay enough.

– By David Tanner, staff writer
david_tanner@landlinemag.com

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