Rising fuel prices could see many small fleet and owner-operators go broke, according to several that Big Rigs has spoken to around Australia.
With many clients refusing to accept a rate increase, operators are struggling to make ends meet, they said.
In Penguin, a small Tassie town beside the Bass Highway, one operator told us the cost of diesel was 238 cents per litre (cpl). At nearby Burnie, diesel was 237.9 cpl, whilst E10 was 216.9 cpl.
Veteran Queensland owner-operator Laurie Seery, who has been a truckie for 50 years, said the fuel price was “killing transport businesses”.
“We need to band together and do something about it such as stopping delivering for five days and it would shut down the nation,” he said.
Seery added he won’t have a bar of government excuses and claims there is enough fuel in Australia to meet our needs.
“There is a lot of diesel coming out of the ground at Moomba in SA and Aramac in Queensland which is suitable for trucks; some of it goes overseas,” he said.
Charters Towers-based Seery drives a 1998 Acco International and said his costs had skyrocketed in recent weeks.
“I have been getting it in Townsville for $2.16 and my costs have risen big time. Every time it goes up, the price of everything from papers, cars, groceries and everything else rises.
“You check out prices in supermarkets and everything has gone up. Us truckies are being screwed and it now costs double for fuel to transport cars from the north to Brisbane. If I try and put my rate up to compensate, my clients can’t afford it.”
Chad Dehne runs Slingshot Transport based at Katherine in the Northern Territory and runs 10 trucks. “I buy fuel in bulk and used to pay $1.90 and now it has shot up to around $2.20, When I put the rate up some will pay it and others won’t so it affects us,” Dehne said.
Perth-based WA owner-driver Wayne Cook described rising fuel costs as a “modern day version of bushranger Ned Kelly”.
“I was at Ravensthorpe in the south-east last week and paid $2.42 but around Perth it varies from $2.16 to $2.20. At an unmanned site at Bunbury it was $2.17. The price is going up all the time,” explained Cook.
He said the only way he could compensate for the cost rise was to include that factor when he prepares job quotes.
A Victorian owner-operator was also concerned about how rising fuel prices was affecting his business. He’d just purchased a second-hand Kenworth K200 and travels weekly between country Victoria and interstate as far away as Queensland.
“I travel about 5500km weekly and it used to cost me around $5500 and now that has risen to $8500. I fuelled up at Ballarat and paid $2.33 a litre for diesel,” he said.
There are cheaper options out there, he conceded, but they are few and far between.
“I did fuel up to the south of Moree this week and it was just over $1.90 a litre but may have gone up now,” he said.
This angry long-time road transport lad said that when there is a fuel hike, few clients will agree to a higher rate.
“I also have to pay $3500 each quarter for registration and these fuel prices are killing me,” he said. “We keep Australia supplied and get knocked from pillar to post.”
Queensland owner-operator Adam Gee said that rising fuel costs are going to send some small blokes to the wall.
“Especially if it reaches the expected $2.80 a litre,” he said. “The cheapest I’ve seen it was yesterday at Captains Mountain at $2.13 and I paid $2.40 at Injune the week before last.
“The average price with the big fuel companies seems to be around $2.25 to $2.35, I think I paid $2.32 in Adelaide on Tuesday, it’s becoming beyond a joke, seriously.”
On a trip out west along the Flinders Highway in late September, Big Rigs checked out the prices at various outlets.
At Calcium Roadhouse it was 219.9 cpl and at Charters Towers Gold City it was 226.7 cpl. Further out west it was over 240 cpl.
Another long-time owner-driver said he was also alarmed at how many businesses seem prepared to put up with a cost that equates to around 40- 50 per cent of gross earnings.
“I have said it before and keep saying it, but it falls on deaf ears, the answer to this problem is camaraderie: one in, all in,” he said. “All owner-drivers have to do is go home for one week. Turn phones off. Go home and spend a week with family, or whatever they want to do, but it has to be all of us.
“When customers cannot get an owner driver/truck to move their freight, they cannot supply their customer. Then the customer is not happy, which in turn makes the end user not happy.
“After two or three days, turn your phone on and the customer will ring, negotiate a safe, sustainable, profitable business, with a seven-day end of week payment term. And in a written contract. This needs to be across the board.”
Governments need to step up
Australia’s monthly Consumer Price Index (CPI) indicator rose 5.2 per cent in the 12 months to August 2023 according to the latest data from the Australian Bureau of Statistics (ABS). This was up from 4.9 per cent in July.
Fuel prices were one of the main factors nudging Australian inflation figures higher.
The inflationary impacts from fuel price rises are consistent with the latest fuel price analysis from the Australian In- stitute of Petroleum (AIP).
According to the Australian Institute of Petroleum, the national average diesel wholesale price for the week ending Sep- tember 22, 2023 was 210.7 cpl. This is up by 10.6 per cent in three months (190.5 cpl) and by 12.43 per cent from the same period last year (187.4 cpl).
“There is a concern that the price of diesel will rise above the spikes witnessed in mid-2022 and again in late 2022 when the diesel price edged closer to 230 cpl,” said Neil Chambers, director of Container Transport Alliance Australia.
“In addition, what customers don’t see directly are the impacts on the complete cost of diesel fuel imposed on transport operators through the decision of the federal government to increase fuel excise levies on fuel used in heavy vehicles by 6 per cent per year from July this year (2023) through to July 2026.”
While most container operators levy a fuel surcharge on customers to offset diesel spikes, and other costs of fuel, he con- ceded the current price increases are “putting pressure” on operators to adjust that charge, which is usually between 24 to 34 per cent on top of the base container cartage rate.
Cam Dumesny, CEO of WA’s peak trucking body, Western Roads Federation, believes governments on all three levels – federal, state and local – can play a key role in helping mitigate rising freight costs by focusing on freight productivity.
“The industry has identified numerous relatively simple and easy to implement solutions that can help reduce freight costs and so cost of living pressures,” Dumesny said.
“We know it works. For example, in one instance co-operation with the WA government led to fresh produce being delivered into and out of WA with an extra day’s shelf life, meaning less waste and lower produce costs.”
He believes local governments, particularly in Perth, also have a role to play. “Preliminary analysis by a leading AI company of data supplied by the industry has shown local government decisions are reducing local delivery efficiency by as much as 20 per cent.
“That means residents are paying more. Federally, the government must take a lead on addressing trans-national freight efficiency across all modes, not just road.”