Trucking told to factor in carbon tax now

Transport operators urged to take action to minimise the impact of carbon tax on their business

August 2, 2012

The trucking industry will feel the sting of the carbon tax before 2014, according to an advisory firm, which has warned operators to act now to protect their margins.

The carbon tax began on July 1 but the trucking industry was given a two-year exemption. The tax will apply to operators on July 1, 2014 through an increase in the fuel excise.

However, Ferrier Hodgson says operators need to start factoring in price increases from higher up the chain

"I’m talking here about the increased costs that will emerge as your suppliers look to pass on their impact from the carbon tax," partner Brendan Richards says.

"Keep an eye on marginal increases in utility prices, wages, general consumables, plant and equipment and other capital items."

Richards says those in niche areas should pass on the increase to their customers sooner rather than later, but adds that it may be hard to do so.

"The reality is that in the current economic climate and highly competitive environment, some customers routinely change transport operators for a slightly cheaper rate," he says.

"As much as I may say that cost increases should be passed on, the commercial capability to do so, particularly for small to medium sized operators, can be limited."

Richards says operators should consult their accountants to identify the impact the tax will have on their business and take the findings to their customers to push for a rate increase.

"Those businesses that delay making the necessary price increases are putting themselves behind the eight ball and creating opportunities for those already on the front foot," he says.

Trucking operators will pay an extra 6.8 cents per litre for fuel when the tax is applied to the industry. Although it lobbied for trucking to be exempted from the tax, the Australian Trucking Association (ATA) says the two-year reprieve will give businesses time to renegotiate contracts and look at ways to improve their fuel efficiency.

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