Latest / 360 with Katie Woolf / The NT Road Transport Association’s Louise Bilato says a number of operators have sold up due to supply challenges and rising operating expenses

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The NT Road Transport Association’s Louise Bilato says a number of operators have sold up due to supply challenges and rising operating expenses · 360 with Katie Woolf

• 0:00
  Speaker 1: We have been taking a closer look at these diesel
• 0:02
  Speaker 1: and unleaded prices overnight at the terminal gate. We know
• 0:05
  Speaker 1: that we've seen a massive jump just overnight. So as
• 0:09
  Speaker 1: we see these fuel prices that are set to rise
• 0:11
  Speaker 1: up to twenty five cents per liter. Now that that
• 0:14
  Speaker 1: cut to the fuel excises ended, it was indeed a
• 0:17
  Speaker 1: temporary measure introduced under the former coalition government and it
• 0:20
  Speaker 1: was aimed well designed. I guess you'd say, to provide
• 0:23
  Speaker 1: some cost of living relief. Now one of the major industries, though,
• 0:27
  Speaker 1: that is set to feel the pinch. The most I
• 0:30
  Speaker 1: think you'd have to say is the transport sector. And
• 0:32
  Speaker 1: joining me on the line to tell us a little
• 0:34
  Speaker 1: bit more is the Empty Road Transport Association's Louise Belato.
• 0:39
  Speaker 1: Good morning to you, Louise.
• 0:41
  Speaker 2: Good morning Katie, Louise.
• 0:43
  Speaker 1: What is the industry preparing for at this point with
• 0:46
  Speaker 1: that excise ending?
• 0:49
  Speaker 2: Well, the excise, the fuel exercise did nothing for the
• 0:53
  Speaker 2: road transport industry, as you may have been aware. Yeah,
• 0:57
  Speaker 2: because we lost that a teen point two percent. We're
• 1:01
  Speaker 2: actually having reinstated eighteen point six percent dual tax credit,
• 1:05
  Speaker 2: but the price difference for diesel was up around thirty
• 1:10
  Speaker 2: cents a liter for the duration. So we were seeking
• 1:14
  Speaker 2: answers to why there was such a difference between diesel
• 1:19
  Speaker 2: and unleaded whilst the fuel exercise was there and got
• 1:23
  Speaker 2: no good answers except that there was a great demand
• 1:27
  Speaker 2: for diesel from mining and agriculture and shipping and as
• 1:33
  Speaker 2: well as the road transport industry, which told us that
• 1:36
  Speaker 2: the you know, the fuel companies were making huge amounts
• 1:41
  Speaker 2: of money there. So we had no fuel tax credits
• 1:45
  Speaker 2: and we had very high diesel prices. Now we're going
• 1:50
  Speaker 2: to have even higher diesel prices, but we will get
• 1:54
  Speaker 2: the eighteen point eight cents a liter duel tax credits
• 1:57
  Speaker 2: for on road, okay, and so on the ways talk
• 2:02
  Speaker 2: us through.
• 2:02
  Speaker 1: I mean, I guess for you know, for a regular
• 2:05
  Speaker 1: person listening this morning, they'll be wondering, how much does
• 2:07
  Speaker 1: it even cost to fill up a truck? You know,
• 2:12
  Speaker 1: I'm imagining quite bloody expensive.
• 2:16
  Speaker 2: Well, yeah, I mean, these days trucks usually have smaller
• 2:20
  Speaker 2: tanks and fuel up more regularly, but that can be
• 2:24
  Speaker 2: a bit hazardous if they're having to fuel up in
• 2:28
  Speaker 2: remote locations. But they've put about twelve hundred to fourteen
• 2:33
  Speaker 2: hundred liters of duel on. So if you're saying it's
• 2:37
  Speaker 2: two dollars two dollars, yeah, yeah, so that's three thousand
• 2:42
  Speaker 2: dollars to fuel up a truck.
• 2:45
  Speaker 1: That is massive. Yeah, it's a massive amount. So obviously
• 2:50
  Speaker 1: the fuel ex size for you guys isn't such a
• 2:53
  Speaker 1: huge concern, but you obviously spoke about, you know, the
• 2:56
  Speaker 1: other measures for our road train o sport industry at
• 3:01
  Speaker 1: this point in time, like how big an impact is
• 3:05
  Speaker 1: this having when it comes to transporting goods in and
• 3:07
  Speaker 1: out of the territory and around Australia.
• 3:11
  Speaker 2: Oh, Katie, it's been massively problematic because there was some
• 3:16
  Speaker 2: real concerns about the financial stress of our road transport
• 3:20
  Speaker 2: industry whilst that duel tax credit wasn't there because as
• 3:23
  Speaker 2: I said, the fuel exercise did nothing for the road
• 3:26
  Speaker 2: transport industry. It had that fuel tax credit removed and
• 3:30
  Speaker 2: we still saw the very high diesel prices. So there
• 3:34
  Speaker 2: was a significant number of transport operators who were and
• 3:39
  Speaker 2: are you very compromised and potentially it's gone broke. We've
• 3:44
  Speaker 2: had other companies who were able to put those fuel
• 3:47
  Speaker 2: levees in place and who were traveling okay because there's
• 3:51
  Speaker 2: so much work on, but you know, when there's problems
• 3:56
  Speaker 2: with workforce and not being able to get sufficient divers,
• 4:00
  Speaker 2: that proved very problematic. And there's been a number of
• 4:04
  Speaker 2: trucking operators who've just sold up all their gear. They
• 4:07
  Speaker 2: haven't even tried to sell their businesses. They've just sold
• 4:11
  Speaker 2: up and walked away, walked out of the business. Well,
• 4:15
  Speaker 2: because the it's been so lot, there's long waiting periods
• 4:22
  Speaker 2: to get new trailers and prime movers, and so there
• 4:26
  Speaker 2: is a demand for equipment, and they've got better prices
• 4:30
  Speaker 2: for secondhand equipment, and it was it was cheaper and
• 4:35
  Speaker 2: easier for them to just pack up and walk away
• 4:38
  Speaker 2: and sell off their gear. Good.
• 4:41
  Speaker 1: Has that kind of thing happened here in the territory.
• 4:44
  Speaker 2: Yeah, we've had We've had some smaller operators who have
• 4:47
  Speaker 2: definitely sold up a lot of their gear and who
• 4:50
  Speaker 2: are intending to leave the industry. Mean a lot of
• 4:54
  Speaker 2: those people were, you know, thinking about it before this year,
• 5:01
  Speaker 2: but it's just become more attractive and it's been too
• 5:03
  Speaker 2: expensive to try and operate because if you everyone wants
• 5:08
  Speaker 2: a backloading rate. And we've had this conversation before. It's
• 5:12
  Speaker 2: rude because the cost of fuel is exactly the same
• 5:16
  Speaker 2: whether you're traveling into Darwin or you're traveling out of Darwin,
• 5:20
  Speaker 2: and a fully loaded road train burns a leter of
• 5:25
  Speaker 2: fuel for every point eighty seven kilometers regardless. So it's
• 5:32
  Speaker 2: a really compromising position that the industry faces when everyone
• 5:39
  Speaker 2: wants cheaper freight costs and the transport cost is the
• 5:43
  Speaker 2: transport costs and fuel and tires, et cetera all impose
• 5:48
  Speaker 2: huge stresses then on the business.
• 5:51
  Speaker 1: So the ways when you talk about you know, goods
• 5:54
  Speaker 1: and services, what do you think that we can sort
• 5:56
  Speaker 1: of expect over you know, over the coming months, and
• 5:59
  Speaker 1: and what can we expect from the transport industry.
• 6:05
  Speaker 2: I think we can continue to see that those bigger companies,
• 6:10
  Speaker 2: you know, the top end of town will be increasing
• 6:14
  Speaker 2: their freight prices. That's just given as the you know,
• 6:18
  Speaker 2: anyone who's borrowing money for their equipment will have to
• 6:24
  Speaker 2: cover those costs, which are you know, higher, Like everyone
• 6:27
  Speaker 2: has higher mortgage costs, it's the same when you're borrowing
• 6:30
  Speaker 2: money for you know, plant and equipment. And then, as
• 6:35
  Speaker 2: I said, we will see higher fuel prices. You've just
• 6:40
  Speaker 2: been talking about it. The eighteen point eight cents elater
• 6:43
  Speaker 2: fuel tax rebate doesn't cover it. Yeah, yeah, so brace
• 6:50
  Speaker 2: yourselves everyone for higher freight costs. Unfortunately, it is tough,
• 6:56
  Speaker 2: isn't it.
• 6:57
  Speaker 1: You know, like it's sort of the cost of living
• 6:59
  Speaker 1: for every body is on the rise. And and you
• 7:02
  Speaker 1: know it's for our truckies and for those obviously transporting goods.
• 7:07
  Speaker 1: You can understand if they're paying much higher petrol prices
• 7:10
  Speaker 1: or diesel prices, then it is understandable that obviously those
• 7:14
  Speaker 1: freight costs are going up. But it just, you know,
• 7:17
  Speaker 1: it just means that everybody is sort of feeling the impacts.
• 7:19
  Speaker 1: I think you'd have to say when it comes to
• 7:21
  Speaker 1: the cost of living and those costs rising, Katie.
• 7:25
  Speaker 2: It's scary. And transport has always been a marginal industry.
• 7:30
  Speaker 2: The profit margins for most of our transport operators, you know,
• 7:36
  Speaker 2: you're lucky if it's five percent. You know, there are
• 7:38
  Speaker 2: other industries, so they've got very significant percentage profits. So
• 7:44
  Speaker 2: they've got they've got more buffer you know, in the
• 7:47
  Speaker 2: in their their their business models, whereas transport has always
• 7:52
  Speaker 2: been the meat and the sandwich, and as they describe
• 7:54
  Speaker 2: as a price taker. Any little change and you know,
• 7:58
  Speaker 2: we've seen it across the board, not just with diesel,
• 8:01
  Speaker 2: but every oil and lubricants and filters and as I said, tires,
• 8:06
  Speaker 2: So it's every aspect of the transport operation which is
• 8:11
  Speaker 2: costing more money to actually do business. And yeah, but
• 8:16
  Speaker 2: there doesn't look like there's any relief on the horizon
• 8:20
  Speaker 2: at all. And you know, we've got the wet season,
• 8:23
  Speaker 2: which is a standardly a slower period for the industry
• 8:29
  Speaker 2: and where there's downturns et cetera. So we will potentially
• 8:34
  Speaker 2: see more of our Northern Territory road transport operators doing
• 8:38
  Speaker 2: it very very tough.
• 8:39
  Speaker 1: Yeah wow, Now, I mean it's going to be hard
• 8:43
  Speaker 1: and it's certainly going to be hard for them running
• 8:44
  Speaker 1: their Businesses Louise. Earlier this year, obviously we've spoken quite
• 8:49
  Speaker 1: a bit about the diesel addative AD Blue was quite
• 8:52
  Speaker 1: a topical issue with it running in short supply. What's
• 8:55
  Speaker 1: the latest on that situation. Well, the.
• 9:00
  Speaker 2: Federal government has again given moneies to manufacturers to manufacturer
• 9:09
  Speaker 2: at Blue in Australia, so we're given assurances that the
• 9:14
  Speaker 2: supply shouldn't be a problem ongoing when the Brisbane plant
• 9:20
  Speaker 2: closes at the end of the year, because there are
• 9:23
  Speaker 2: other manufacturers who are manufacturing AD blue. But the cost
• 9:28
  Speaker 2: of it, which is you know today in Darwin is
• 9:31
  Speaker 2: a dollar ninety five lita for AD blue is still
• 9:36
  Speaker 2: you know, last year at this time it was seventy
• 9:39
  Speaker 2: six cents a liter, so and you know, when there
• 9:43
  Speaker 2: was a huge constraint it went up to three dollars
• 9:46
  Speaker 2: a liter in places. But there is a lot more
• 9:50
  Speaker 2: new trucks on the road who all must have add blue.
• 9:55
  Speaker 2: And it's again another costingpost and case is that these
• 10:01
  Speaker 2: things are very hard to absorb, but they have to
• 10:03
  Speaker 2: be passed on. Yeah.
• 10:05
  Speaker 1: Well, and this is the thing I mean, Louise, just
• 10:07
  Speaker 1: based on you know, the discussion that obviously we've been
• 10:09
  Speaker 1: having this morning, the talk of the petrol prices, you know,
• 10:11
  Speaker 1: the other costs that are associated and the difficulties that
• 10:15
  Speaker 1: the transport industry has gone at the moment, and they're
• 10:17
  Speaker 1: being very small margins as it is. I mean, is
• 10:21
  Speaker 1: there anything that could change in any way that you know,
• 10:24
  Speaker 1: that might provide some relief or that you know that
• 10:27
  Speaker 1: might see things sort of become a bit more positive
• 10:30
  Speaker 1: in this space.
• 10:32
  Speaker 2: I think if there is any downturn elsewhere, we might
• 10:37
  Speaker 2: see increased workforce, or we might have some of the trucks,
• 10:44
  Speaker 2: especially in Western Australia, that have been unable to operate
• 10:47
  Speaker 2: because of a lack of the workforce. You know, there
• 10:51
  Speaker 2: might be people who are interested in coming into the
• 10:55
  Speaker 2: industry that way, which will certainly help the the civil
• 11:00
  Speaker 2: works projects and the mining projects. And that's that's definitely
• 11:05
  Speaker 2: a good thing because the more from our point of view,
• 11:08
  Speaker 2: the more bitumen we've got on road surfaces, the more
• 11:13
  Speaker 2: cost effective is the road transport task. As soon as
• 11:18
  Speaker 2: we're on unsealed roads, you know, we know that's at
• 11:21
  Speaker 2: least three times and sometimes a lot more than that
• 11:24
  Speaker 2: to actually operate and to do business, and there's that
• 11:27
  Speaker 2: many more delays and prepare and maintenance costs on our
• 11:32
  Speaker 2: unsealed road networks. You know, it's it's really is ridiculous.
• 11:36
  Speaker 2: It's really uncompetitive trying to actually move freight around the
• 11:40
  Speaker 2: territory on our undersealed road network. But the one the
• 11:45
  Speaker 2: one positive I can mention is that the Northern Territory
• 11:51
  Speaker 2: Government's registration so road transport road registrations are going up
• 11:56
  Speaker 2: on the Eastern Seaboard under the Heavy Vehicle National Law.
• 11:59
  Speaker 2: Those jurisdictions it's going up two point seventy five percent
• 12:05
  Speaker 2: from the first of October. The Northern Territory and Western Australia,
• 12:11
  Speaker 2: thankfully as not part of the Heavy Vehicle National Law.
• 12:16
  Speaker 2: That rise in the Northern Territory is going to be
• 12:19
  Speaker 2: one point five percent. So we've managed to negotiate with
• 12:22
  Speaker 2: the Northern Territory government. They understand the pressures that everyone
• 12:27
  Speaker 2: is experiencing. So registrations on our heavy vehicles going up
• 12:33
  Speaker 2: one point five percent, not two point seventy five percent.
• 12:36
  Speaker 1: Well, yeah, that is a small positive luise by the
• 12:40
  Speaker 1: sounds of it. Hey, we always appreciate your time. Thanks
• 12:43
  Speaker 1: so much for having a chat with us this morning
• 12:45
  Speaker 1: and talking through you know, how it works for the
• 12:47
  Speaker 1: transport industry when it comes to those petrol prices and
• 12:50
  Speaker 1: various other aspects.
• 12:52
  Speaker 2: Thank you, Katie, Thank you