Logistics firms brace for carbon tax impact


Logistics companies are already bracing for the impact of the carbon tax even though it doesn't directly apply to heavy vehicles until 2014.

Logistics firms brace for carbon tax impact
Logistics firms brace for carbon tax impact

By Sean Muir | June 22, 2012

Logistics companies are already bracing for the impact of the carbon tax even though it doesn't directly apply to heavy vehicles until 2014.

Speaking with SupplyChain Review yesterday, Northline CEO Craige Whitton says the knock-on effect of the carbon tax is a major issue for the supply chain industry.

"What’s happened as part of the legislation, on-road trucks have been exempted under the carbon tax legislation until July 1, 2014," Whitton says.

"However, the off road users are being slugged with the equivalent of a 23-bucks-a-tonne charge for carbon, and they are not being charged directly in that way, they are being charged via a reduction in their diesel fuel rebate."

"Effectively, rail operators have introduced carbon cost surcharges, and that is something we have also had to introduce to pass on that cost recovery.

"So anything that is off-road – air transport, rail transport, sea transport – they are impacted and that does have implications for us as well."

Northline - which moves 2 million
tonnes of freight per annum - incorporates rail into its primarily road-based network to freight goods in places like
Western Australian and the Northern Territory.

"Not everything travels on road,"
Whitton says. "And as a result of that there are carbon cost surcharges being passed to us by rail operators that we are having to pass on."

Ferrier Hodgson partner Brendan Richards
says road transport operators have been lulled into a false sense of security by the deferral of fuel tax credit (FTC) reductions, with many regarding the carbon tax as a July 1, 2014 issue, or something to think about a bit further down the track.

"FTC reductions may only add 1 percent
to the cost of doing business in two years’ time - and many in rail, air and sea transport have already introduced carbon tax surcharges, a sign of things to come for road transporters -
but the biggest threat to the profitability of many transport and logistics businesses lies in the immediate, indirect cost of the carbon tax."

"While little has been done to estimate immediate -
July 1,
2012
-
indirect cost increases, I have seen suggestions that costs for trucking businesses may increase by up to 3.5 percent, and significantly more than that in some sectors of the industry."

"To delve further into the doom and gloom, many transport businesses operate on net profit margins of between 2 percent and 5 percent. If the immediate cost increases can’t be passed on, many of those operators will dip into the red."

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