truckers win landmark order for more pay that could put pressure on inflation
Australia’s biggest retailers, manufacturers and mining companies will have to pay truckers more to offset rising fuel costs after the Fair Work Commission issued a landmark report that could put further pressure on inflation.
Truckers and their bosses, represented by the Transport Workers Union (TWU) and the Australian Road Transport Industry Organization (ARTIO), were pleading for action after weeks of rising diesel prices because their contracts were signed before war broke out in the Middle East.
The Commission ruled that from Tuesday, companies at the top of the supply chain must conduct fortnightly fuel price reviews and include rising fuel prices in the contracts they sign to transport their goods.
The decision was made on Monday following a fast-track legal process before the commission, which was accelerated after the Albanian government issued an emergency order under new laws passed by parliament in recent weeks.
The Commission’s orders come just in time for the logistics industry, which warned of the cliff on 21 April, as the average price of diesel remains stubbornly above $3.10 per liter. That was the date that trucking operators, many of them small family businesses and single truck drivers, warned they would be forced to close due to the delay between signing contracts and how much fuel has increased since then.
When making their applications, unions stated that the industry was at “breaking point” and that many truck operators were on the verge of collapse due to rising fuel costs. Many reportedly maxed out their credit cards or refinanced their homes to cover gas bills.
Commission chairman Adam Hatcher and vice-chairmen Ingrid Asbury and Mark Gibian said in their decision that the road freight contract chain orders “will require adjustments to all existing rates in the industry to cover the increased cost of fuel, but will not otherwise affect the way a variety of road freight jobs are paid, including part-load, mixed load, no-load, multi-leg and round-trip journeys.”
“We are happy with this [order] “It will not negatively affect, but will maintain, the viability and competitiveness of road transport enterprises, vehicle owners and other similar persons,” the commission members said.
TWU national secretary Michael Kaine said the order “imposes an obligation on wealthy customers at the top of our supply chains to pay their fair share to the transport industry”.
“Over the past few weeks, drivers and trucking businesses have outlined the dire conditions they face with diesel costs, with many already having to park their trucks or relying on personal loans to keep going. Many drivers in the industry are mom-and-pop operations who are now forced to subsidize fuel costs for the multibillion-dollar companies they transport goods to,” Kaine said.
“Although the industry still has a very challenging time ahead, this order will be a lifeline for the transportation industry and our national supply chains,” Kaine said.
“If the trucks stop, the economy stops,” said Peter Anderson, national secretary of ARTIO. “This Order ensures that the entire road transport industry has certainty to maintain its services and collect any additional extraordinary fuel costs from its customers,” he said.
“This order will not completely solve the fuel crisis, but it will mean businesses can continue to operate knowing they can make up for it wherever the price goes,” he said.
“This order comes at a critical time for truckers who are already handing out credits to pay off last month’s sky-high fuel bills,” said Glyn Castanelli, national president of the National Highway Carriers Association.
“Now these operators can have confidence that they can absorb these costs going forward and keep the wheels turning, which is good news for both them and our national supply chains,” Castanelli said.
During the hearings, some of Australia’s largest companies opposed such an order, citing a variety of reasons including increased costs as well as the effort and logistics required to increase fuel price controls.
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Elias Visontay is the National Consumer Affairs Reporter for The Sydney Morning Herald and The Age.Connect via email.
