Opinion

As price pressures rise for transport operators, something has to give

supply

Australians are facing their biggest economic challenge since the 2007 Global Financial Crisis – and there’s seemingly no end in sight for the near future.

From the bowser to the supermarket checkout, ballooning inflation and supply chain disruptions mean everyday Australians are paying more for essential items.

And while the government continue to introduce measures to ease these pressures and support businesses through these turbulent times, the transport industry has been overlooked.

As a sector used to operating on very thin margins at the best of times, unless there is urgent and prudent action to lower our operational costs, Australians will start to feel the pinch more than they already are.

In a recent column I called for an amendment to the Competition and Act Consumer 2010 in order to end the competition exemption that shipping liners receive.

This followed research carried out the Victorian Transport Association that found shippers have been achieving record profits all while transporting less cargo, highlighting the unfair burden being placed on the transport industry who are left footing the bill.

And exponentially increasing shipping fees are just one of many issues our industry is grappling with. The rising cost of fuel was a major talking point for both parties at the recent election, with the Morrison government halving the fuel excise in its Federal Budget, released weeks before Australians went to the polls.

But not only was this saving not passed on to the transport industry, we essentially funded it through the removal of the Fuel Tax Credit. Operators were instead offered a paltry fuel saving that works out to around 4.3 cents per litre. Car drivers can get a bigger discount just by hanging on to their shopping receipt.

Throw in increasing prices for labour, maintenance and parts and it’s clear that something has to give. While our industry has limited capacity to pass these costs onto customers, rising prices will eventually make their way down the supply chain to consumers, thereby offsetting the savings the cuts to the fuel excise were intended to create.

For some smaller businesses, there’s a real risk that they’ll be unable to turn a profit under such gruelling fiscal conditions and will be forced to close. The impact of that would be far worse than a bigger grocery bill, as these small operators play an integral role in our interconnected supply chains and closures could potentially create a domino effect that would result in massive disruptions and gaps on shelves.

The transport industry does not operate in a vacuum. We are the mechanism that gets produce into supermarkets, vaccines into clinics, clothing into retailers, whitegoods into kitchens and so much more. Anything that hurts transport operators in turn hurts the Australian public. This is something that many still haven’t realised – but they need to, before it’s too late.

The VTA is advocating for, and engaging with government on, a more equitable solution so that the industry can benefit from the savings that others in the community have experienced and not be forced to increase prices or shut up shop.

Unfortunately these recent price pressures are just the latest in a long line of challenges for the transport industry which includes driver shortages and issues around safety and licencing. But having worked in transport for a long time, I know just how resilient and innovative our great industry is.

Already we are seeing progress, with the Victorian Government embracing the VTA’s Driver Delivery Program in order to create a pathway for skilled young drivers to enter our industry.

We’re also seeing manufacturers embrace alternative fuel technologies to move towards a cleaner and more sustainable future – a topic that will be explored at the VTA’s upcoming Alternative Fuel Summit (August 23).

But these transitions take time. Until then, we need to reduce the cost of fuel for transport operators, the lifeblood that keep this country moving.

  • Peter Anderson is the CEO of the Victorian Transport Association.
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