‘Nothing moves’: Grim new warning of ‘killer’ price rise facing Australia

Cost of living is already out of control – but it’s about to get even worse for Aussies as one crucial industry is pushed to breaking point.

Australia’s trucking industry has been hit by crisis after crisis – and it could soon lead to more pain at the supermarket checkout.

The sector has already faced unprecedented pressures lately, including the Covid pandemic, global supply chain issues and a nationwide shortage of AdBlue.

But now, our truckies are grappling with an even more dire nightmare, with skyrocketing fuel costs and tolls sparking fears of a looming exodus from the industry – and price hikes for consumers.

Simon O’Hara, CEO of Road Freight NSW, said recent years had proved “without freights, nothing moves” – and everyone loses when the sector is struggling.

And while we’re all paying more at the bowser these days, Mr O’Hara said freight operators were also reeling from the 22.1 cents per litre cut to the 44.2 cent fuel excise implemented by former treasurer Josh Frydenberg during the 2022 federal budget in April.

While the move saved motorists around 22 cents when filling up, the savings that were previously on offer for truck drivers were cut short.

The cut to the fuel excise was welcome relief to consumers – but hit the truck industry hard.

Previously, freight companies would receive 17.8 cents back per litre, however this was cut to 4.3 cents per litre from March 30.

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The trucking industry is in crisis as costs skyrocket. Picture: iStock

“A problem for freight operators is that fuel costs are increasing, and we are seeing that increase at the bowser with prices well and truly over $2,” Mr O’Hara told news.com.au.

“The problem is that not only are truckies paying higher fuel costs when they fill up, the rebate they would normally expect during tax time – tax credits, in effect – has been taken off the table for three months as a result of the reduction in the fuel excise the Morrison government did just before the election.

“That will lead to a number of things – one, there will probably be a $20 increase (on the average weekly supermarket shop) for consumers, and also for freight operators, it means higher costs.”

Mr O’Hara explained that freight operators would not be able to immediately pass on those higher costs to their immediate customers, as it takes time for contracts to be negotiated – which means “profit margins erode pretty quickly”.

He said that ultimately, the crisis will cause many to question “whether they can continue to operate in this sort of environment”.

“We will get operators making the conscious decision to leave the industry, and the tightening we’ve seen over the past six months will get even tighter … if there are less freight operators to rely on,” he said.

Experts warn the problems facing the freight sector will push up grocery prices by an average of $20 per week. Picture: iStock

Mr O’Hara noted that rising fuel costs were just one of a string of issues plaguing the sector at the same time.

“It’s all happening at once, so it’s a very interesting time,” he said.

Last month, Australian Trucking Association (ATA) chair David Smith also warned the Government grocery bills would explode if the fuel tax credit wasn’t restored to 17.8 cents.

In a letter to former Prime Minister Scott Morrison, Mr Smith said a reduction of trucks on roads would lead to supply chain issues which could add “$20 per week to the average household’s food bill”.

“The fuel tax credit is a significant component of trucking’s established business model,” he wrote.

“The food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax credit.

“This will negate the cost of living relief which the Government sought to provide.”

Mr Smith also warned that a number of operators would “inevitably collapse in the coming months” unless changes are made.

‘Never been more stressed’

Meanwhile, the Transport Workers’ Union has also hit out at NSW’s notoriously expensive toll network, which NSW secretary Richard Olsen described as a business “killer” in a recent interview with The Daily Telegraph.

TWU National Secretary Michael Kaine told news.com.au the industry was now at breaking point.

“Sky-high fuel prices are pushing road transport to the very brink. Transport families have never been more stressed about how they’ll make enough money to break even, let alone make even a small profit,” he said.

“We’ve heard countless stories of workers parking up because outrageously high operating costs means truck drivers end up even further behind after finishing a run.

Transport families have never been more stressed about how they’ll make enough money to break even. Picture: iStock

“The result is an industry that’s less sustainable and more deadly. When truckies’ razor thin margins are slashed, the pressure is on to take risks, overload, drive fatigued or cut back on maintenance to make ends meet.”

Mr Kaine said it was time for the government to act.

“This is bigger than a single fuel spike: national supply chains are under existential threat because truckies have no means to recoup fuel costs from wealthy companies at the top who set transport contracts,” he said.

“It’s critical the Federal Government moves to urgently implement an independent body with the power to set enforceable binding standards in road transport as was recommended by the Senate nearly 10 months ago”.

– with Jessica Wang