Latest / 360 with Katie Woolf / The Transport Association's Louise Bilato says the fuel price hike is going to have major impacts on delivery and freight services

Transcript

The Transport Association's Louise Bilato says the fuel price hike is going to have major impacts on delivery and freight services · 360 with Katie Woolf

• 0:00
  Speaker 1: And I think that what we're actually going to see
• 0:02
  Speaker 1: is that this is a big impulse for a lot
• 0:04
  Speaker 1: of industries and it's going to hit our hip pocket
• 0:07
  Speaker 1: in more ways than what we would have realized or
• 0:09
  Speaker 1: actually thought about, you know, think about freight being transported
• 0:13
  Speaker 1: around the nation, think about wanting to catch a flight
• 0:17
  Speaker 1: to somewhere else, and these different ways that we are
• 0:19
  Speaker 1: potentially going to see costs go up and impacts for
• 0:23
  Speaker 1: so many different industries. Now joining me on the line
• 0:26
  Speaker 1: right now, we have got Louise Blato, who is the
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  Speaker 1: executive officer of the NTI Road Transport Association. Good morning
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  Speaker 1: to you, Louise.
• 0:36
  Speaker 2: Good morning Katie, Louise.
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  Speaker 1: We talk about these petrol prices going up and I
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  Speaker 1: would imagine that the people who are really feeling the
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  Speaker 1: impact of that more than most is our truckies and
• 0:47
  Speaker 1: those working in the transport industry.
• 0:50
  Speaker 2: Absolutely, Katie. And what we're concerned about and trying to
• 0:55
  Speaker 2: do some contingency planning, is what if the diel price
• 1:00
  Speaker 2: goes to three dollars a liter and what will that
• 1:03
  Speaker 2: look like for our freight movements around Australia. And that's
• 1:10
  Speaker 2: not unlikely, it could well happen in the near future,
• 1:16
  Speaker 2: hopefully that very high price wouldn't stay that way. But
• 1:22
  Speaker 2: for example, we've got a one of our national carriers
• 1:25
  Speaker 2: who has done a lot of freight based in the territory.
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  Speaker 2: Their fuel bill is a million dollars a months right now,
• 1:36
  Speaker 2: and if the fuel price goes up, just for example,
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  Speaker 2: to three dollars a liter, that would be another five
• 1:45
  Speaker 2: hundred thousand dollars per or months onto their fuel bill,
• 1:49
  Speaker 2: which they couldn't survive if that wasn't passed on to customers.
• 1:55
  Speaker 2: What we're yeah, what we're looking at then is decisions
• 1:59
  Speaker 2: being made around what people do, what freight they require,
• 2:04
  Speaker 2: what becomes essential and what's not. But how long you
• 2:08
  Speaker 2: can do that. You might do that for a month
• 2:10
  Speaker 2: or two months or three months, but you can't do
• 2:13
  Speaker 2: that necessarily for twelve months without it affecting the whole
• 2:16
  Speaker 2: of the economy.
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  Speaker 1: And Louise, this is a real live issue right now,
• 2:21
  Speaker 1: isn't it, Because we just don't know what price we're
• 2:24
  Speaker 1: going to end up paying at the bowser.
• 2:27
  Speaker 2: Well, we know for a fact it's going up, and
• 2:30
  Speaker 2: that the world crude price per barrel is going up.
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  Speaker 2: You know, there's suggestions it could go above two hundred
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  Speaker 2: dollars US a barrel. It's currently one hundred and twenty
• 2:42
  Speaker 2: dollars a barrel. So that's why we are considering how
• 2:49
  Speaker 2: the you know, the country, and what our freight task
• 2:52
  Speaker 2: will look like if fuel and diesel will go higher
• 2:56
  Speaker 2: than petrol, but if it goes above or goes towards
• 3:01
  Speaker 2: three dollars a liter, which is I said, unprecedented, But
• 3:06
  Speaker 2: Katie made the point. And there is a lot of
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  Speaker 2: additional costs also with any oil and petroleum product, So
• 3:12
  Speaker 2: kerosene that's used for making bitchumen, all the oil lubricants
• 3:18
  Speaker 2: that go into every type of machinery, whether it's heavy
• 3:22
  Speaker 2: earth moving equipment as well as trucks, all of that
• 3:26
  Speaker 2: has gone up twenty percent in the last week. So
• 3:29
  Speaker 2: that has a huge impact on the bottom line as well.
• 3:32
  Speaker 1: It most certainly does. Gee it's going to make it
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  Speaker 1: difficult for so many different industries. And I think that
• 3:39
  Speaker 1: you know, when we're talking about freight, a lot of us,
• 3:41
  Speaker 1: you know, you sort of don't consider just how much
• 3:45
  Speaker 1: we rely on this in the territory.
• 3:48
  Speaker 2: And we saw, Katie, didn't we win the floods were
• 3:51
  Speaker 2: in South Australia. What happens when you can't get straight through,
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  Speaker 2: but what happens when you can't afford to actually be
• 4:01
  Speaker 2: moving freight? And most trucking companies are aware of the
• 4:07
  Speaker 2: importance of applying a fuel levy or fuel surcharge. When
• 4:12
  Speaker 2: the price is so volatile and erratic it's gone up
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  Speaker 2: twenty five cents in a week, companies can't absorb that
• 4:20
  Speaker 2: if it goes up another fifty seventy five cents a lita.
• 4:25
  Speaker 2: And as I explained to you some time ago, most
• 4:29
  Speaker 2: road trains burn more than a litera a kilometer, So
• 4:34
  Speaker 2: it's not hard for you to calculate just how much
• 4:38
  Speaker 2: fuel is used in the road transport industry. It's about
• 4:41
  Speaker 2: twenty percent of a trucking company's operating costs.
• 4:46
  Speaker 1: Wow, Louise, these discussions they sound like they're very real,
• 4:50
  Speaker 1: and they're happening right now. That the reality here is
• 4:54
  Speaker 1: that those companies that the industry is talking about what
• 4:58
  Speaker 1: they need to do to try to absorb, well, they're
• 5:02
  Speaker 1: not going to be able to absorb those costs. What
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  Speaker 1: they're going to need to do in terms of passing
• 5:07
  Speaker 1: on a percentage to the consumer.
• 5:10
  Speaker 2: That's right, that's exactly right. And then as I said,
• 5:13
  Speaker 2: what becomes affordable and what's not affordable, how people spend,
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  Speaker 2: How this impacts the wider economy, and we don't know
• 5:22
  Speaker 2: where this international volatility is going to go. You know,
• 5:27
  Speaker 2: Australia is no longer in a bubble, as we are
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  Speaker 2: well aware through COVID, and it is directly affecting everyone's
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  Speaker 2: bottom line.
• 5:37
  Speaker 1: Louise, how are those in the industry feeling right now?
• 5:40
  Speaker 1: I mean they must be pretty concerned.
• 5:44
  Speaker 2: Extremely well. Everyone is looking at their bottom line and
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  Speaker 2: very concerned, you know, trying to ensure that they've got
• 5:53
  Speaker 2: those duel levees applied. Some of our smaller operators haven't
• 6:00
  Speaker 2: viously done that, but they can't afford to be price
• 6:03
  Speaker 2: takers as they have, otherwise they won't be in business.
• 6:07
  Speaker 2: And you know, knowing that, you know, it was tires,
• 6:11
  Speaker 2: it was people's wages. Now it's duel and all the
• 6:16
  Speaker 2: oils and lubricants. You know, there's nothing that hasn't been
• 6:19
  Speaker 2: touched either through the COVID pandemic, with the demands on
• 6:26
  Speaker 2: the freight task, with the floods and now this, Yeah,
• 6:31
  Speaker 2: it's massive. No one's got a little war chest to
• 6:36
  Speaker 2: be able to easily tap into.
• 6:38
  Speaker 1: Yeah, Louise. Somebody had made the comment on the tech
• 6:41
  Speaker 1: sign saying that transport companies get diesel rebates, so they're
• 6:44
  Speaker 1: not so badly impacted.
• 6:46
  Speaker 2: But is that the case, Yes, they get I think
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  Speaker 2: it's sixteen and a half cents a litera off, so
• 6:53
  Speaker 2: it's and primary producers get more per liter off at
• 6:59
  Speaker 2: next side. But when you consider the amount of fuel
• 7:03
  Speaker 2: that's used to move freight, as it said, more than
• 7:09
  Speaker 2: a leter per kilometer transported, it's a very different context.
• 7:15
  Speaker 2: So yes, everyone is aware because transport operators are in
• 7:22
  Speaker 2: the real world, so their family cars fueling them up
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  Speaker 2: is going to be affecting them, but they're operating costs, yeah, through.
• 7:34
  Speaker 1: The roof, Louise, When are you expecting that you know that,
• 7:38
  Speaker 1: I know that you've said that those meetings are happening
• 7:40
  Speaker 1: right now. The different people in the industry are having
• 7:43
  Speaker 1: to make these pretty tough decisions right now and really
• 7:46
  Speaker 1: looking at those prices continuing to rise. When do you
• 7:50
  Speaker 1: anticipate that territories are going to sort of feel the
• 7:55
  Speaker 1: impact of that.
• 7:58
  Speaker 2: I think straight away it's I mean, as I say
• 8:01
  Speaker 2: it's it's already gone above two dollars eight a later,
• 8:05
  Speaker 2: and we know that the price in Darwin or in
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  Speaker 2: Catherine isn't the price that's reflected elsewhere in our remote
• 8:13
  Speaker 2: communities in the territory anyway. So there will be that
• 8:17
  Speaker 2: fuel surcharge being applied as of you know absolutely right now.
• 8:23
  Speaker 2: It's what happens as it gets higher and higher. And
• 8:27
  Speaker 2: that's because you know a lot of our no but
• 8:31
  Speaker 2: doubt people have discussed this before, our diesel powered generating
• 8:35
  Speaker 2: plants in remote communities. You know, civil contractors, you know,
• 8:41
  Speaker 2: having to make contingencies forward for the costs of future
• 8:46
  Speaker 2: materials if they've already got contracts locked in place. You know,
• 8:51
  Speaker 2: there's there's a whole heap of other knock on effects
• 8:54
  Speaker 2: that will yeah, certainly affect their bottom line.
• 8:57
  Speaker 1: Oh you spot on, It's going to have an impact
• 8:59
  Speaker 1: in so many ways. Luise Blato will keep in contact
• 9:02
  Speaker 1: with you. I reckon that you know that we're probably
• 9:05
  Speaker 1: going to be speaking over the coming days and weeks
• 9:07
  Speaker 1: as we see these these prices go up. I really
• 9:10
  Speaker 1: appreciate your time this morning. Thanks for chatting with me.
• 9:13
  Speaker 2: Thank you, Katie, thank you