"70-75% of operators may not survive six months" – an industry association warns as diesel costs devastate Australia's trucking sector.
Operational and Financial Pressures
Diesel prices in Australia surged from approximately $1.80 per liter to a peak of $3.20 per liter in April. Along the Hume Highway—a major freight corridor between Melbourne and Sydney used by roughly 5,000 heavy vehicles daily—prices were reported to range between $2.50 and $2.70 per liter. According to the Melbourne Institute, the price behavior has been described as a "rocket and feathers" phenomenon, where prices increase rapidly but decrease slowly.
The cost increase has directly affected businesses. Woody's Transport, a company operating in the sector, reported paying $250,000 for fuel in one month, up from $140,000 the previous month. The company reportedly passes a portion of these costs to customers through a levy while absorbing the remainder to retain business.
"His financial model relies on one-third of job pay going to fuel, one-third to maintenance, and one-third to wages."
Owner-drivers face baseline operational costs of $100,000 to $200,000 per year before fuel, with annual mileage reaching up to 200,000 km. Delayed payment terms—often between 30 and 120 days—add further financial strain. Driver Frank Black, a 40-year-old owner-driver, reported parking his truck for a two-week period due to the unsustainability of operations.
Industry and Expert Assessments
Warren Clark from the National Road Transport Association estimated that 70-75% of operators may not survive six months, and up to 80% may not last 12 months under current conditions. David Peetz, a professor at Griffith University, stated that the road freight transport industry is characterized by low profits and rising insolvency rates.
Regulatory and Policy Responses
In April, the Transport Workers' Union (TWU) secured a temporary order from the Fair Work Commission requiring clients to pay fuel surcharges when diesel exceeds $2 per liter. The order is scheduled for review in late July. The Fair Work Commission has also mandated that companies hold twice-monthly meetings to review rates.
"Drivers have limited bargaining power against large clients such as oil companies and supermarkets."
Richard Olsen, NSW state secretary of the TWU, stated that drivers have limited bargaining power against large clients such as oil companies and supermarkets. He called for permanent regulations to prevent drivers from cutting back on maintenance due to financial strain and advocated for a cost-recovery model with a permanent fuel levy regulated by law. Conversely, Milton Wood, owner of Woody's Transport, expressed that the government's actions have been slow and have had a minimal impact.
Broader Industry Context and Comment
Sean Mulvaney, a long-haul driver, reported filling his truck with 983 liters of diesel for $2,553.75—nearly double the cost from two months prior. The global fuel crisis, cited as being triggered by a conflict involving Iran, has been identified as a contributing factor to the price increases. Australia is reportedly the world's largest consumer of diesel per capita.
Driver Frank Black expressed concern about the financial risks faced by younger drivers, who may use their homes as collateral for truck loans. He also noted high rates of divorce and suicide within the industry and attributed the end of his own marriage to the demands of his work. Despite these challenges, Black stated that he enjoys the travel and freedom of the job but "would not choose trucking again" due to the personal and financial costs.
"Electric trucks currently account for only 1% of new truck purchases in Australia."
Transport consultant Phil Bullock from NineSquared emphasized the need for investment across all areas of the supply chain, including rail, and noted that electric trucks currently account for only 1% of new truck purchases in Australia.