Trucking industry suffering under high costs: VTA

By: Jason Whittaker


Trucking operators and owner-drivers are in danger of being forced out of business as running costs rise and customers refuse

Trucking operators and owner-drivers are in danger of being forced out of business as running costs rise and customers refuse to pay levies, the Victorian Transport Association (VTA) warns.

VTA Chief Executive Phil Lovel says many in the industry are struggling to maintain costs between the period of purchasing fuel and waiting for the levies to be paid.

He says delays are impacting heavily on the financial viability of small to medium companies to the point where prime contractors are being forced to provide funds just to keep drivers afloat.

"Whilst fuel levies are doing the job, there is still a big cost in carrying the high increases in fuel between levy increases," Lovel says.

This, he adds, is exacerbated by companies refusing to compensate operators and owner-drivers for rate increases. Although the Australian Trucking Association (ATA) argues trucking companies can stay viable by simply adjusting their fuel levies, Lovel says it is not as easy as it sounds as not all clients accept greater charges.

It appears the situation cannot be solved by refusing to work for a particular company either.

"It is very easy for the [Victorian Transport] Association to say, ‘Don’t work for them anymore’, but business is business and some companies will do anything," Lovel says.

The VTA has taken to appealing to customers to pay up, saying a refusal to do so will not only drive operators and owner-drivers out of business but also mean there will be no-one to cart freight.

Skyrocketing fuel prices now make up 27 percent of customer levies, according to the VTA. The group estimates companies are paying $1 per km for fuel based on the $1.81 per litre price.

"It seems clear to me that prices will stay high, which means there is no immediate relief in sight," Lovel says.

Lovel’s concerns come as the price of oil hit a record-high $US140 a barrel, with predictions of higher prices to come. Algerian Energy Minister Chakib Khelil expects oil to hit $US170 this year due to the weak dollar.

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