VTA to operators: put up rates or fold

Date: 16.12.2013

The Victorian Transport Association (VTA) is calling on operators to put up their rates as the cost of doing business in the transport sector continues to rise.

Fuel and labour were the main drivers of an increase in operating costs in 2013

The Victorian Transport Association (VTA) is calling on operators to put up their rates as the cost of doing business in the transport sector continues to rise.

The VTA made the call during the release of its annual cost index, which showed the price of doing business in the trucking industry increased 2.04 per cent this year.

VTA CEO Neil Chambers says numerous sectors of the transport industry are struggling and those that fail to seek cost recovery will find it harder to survive.

"Freight customers must accept that justifiable transport cost increases need to be passed on in the supply chain," Chambers says.

"If this isn’t accepted, I’m afraid that we will witness more transport company financial failures in the industry in 2014, a reduction in the quality of transport services and diminished competition in the marketplace."

The cost index shows labour and fuel were the main offenders in sending operating costs higher, but Chambers adds that labour costs may be higher than what is reflected in the index.

"We acknowledge that labour rates for individual companies may have risen even more than reflected on the VTA cost index due to more generous enterprise agreement outcomes," he says.

"Monitoring by the VTA of enterprise agreements ratified by Fair Work Australia in 2013 shows an average increase in labour rates of over 3 per cent per annum, and some being recorded over 4 per cent."

Chambers says many trucking operators are also struggling from an increase in WorkCover premiums.

Chambers says the price of diesel increased from 134.7 cents per litre on average in November 2012 to 153 cents per litre in November 2013 – a 13.55 per cent increase in one year.

Chambers attributes some of the rise to a reduction in the fuel tax credit, which dipped from 12.6 cents per litre to 12 cents per litre in July this year.