Australia, Transport News

NatRoad research suggests passing costs is best way to stay viable

Landmark research undertaken by NatRoad says that the road user charge can be circumvented through one key strategy

Recent research undertaken by the National Road Transport Association (NatRoad) says most road operators see the ability to pass through costs like the Road User Charge (RUC) to their customers as the best way to make their business viable.

NatRoad CEO Warren Clark says the economic viability ‘pulse check’ was a landmark piece of research by consultants HoustonKemp Economists and was sponsored by Ampol.

It was conducted before the recent rise in the RUC was announced, but Clark says that issue brings its results into sharper focus.

Clark says industry viability is a major challenge for heavy vehicle operators in Australia.

“Our research shows that things they need to do to stay viable and flourish vary according to the size of their business,” he says.

“For example, larger operators will generally be able to pass on new costs like the RUC, while some smaller ones will not.”

More than half of the 179 firms involved in the research employ fewer than 10 drivers and earn revenue of less than $2 million per annum.

The study found that 78 per cent of respondents identified through costs as an ‘important’ or ‘very important’ success factor.

This was followed by effective cost control (72 per cent), winning/retaining customers through non price factors (59 per cent) and having an appropriate pricing policy (58 per cent).

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“Hiring skilled staff to help with fleet and supply chain management at 54 per cent, optimising fleet use at 46 per cent and understanding market trends and customer needs at 45 per cent are other factors coming through loud and clear,” Clark says.

“While everybody recognises the need for our industry to decrease its emissions, only eight percent of respondents rate the issue as ‘very important’ right now.

“The large majority of businesses we engaged with do not actively measure their emissions, with only around 11 per cent of them calculating their carbon emissions.

“Anecdotally, we know that there are companies thinking about what they’re going to do but many, if not most, of the smaller operators are busy just keeping their heads above water.

“Few of the respondents think hydrogen fuel cell vehicles (19 per cent) or electric vehicles (11 per cent) are a suitable on-going fuel source at this stage of the game.”

Ampol Executive General Manager of International and New Business Brent Merrick says that Ampol will continue to support transport businesses as they navigate industry challenges.

“The transition to future fuels will take time, particularly given current cost pressures across our economy, but we are committed to being there for our customers to help them navigate through it,” Merrick says.

“Ultimately, the right balance needs to be found across the trilemma of ongoing energy security, affordability and transition and that will continue to be challenging.”

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