Carbon Tax and the Impact on the Road Freight Industry

As we watch the drama unfold around the Governments’ Carbon Tax, there is much concern over whose pockets will cover these extra costs.

With the cost of fuel steadily rising and the current fuel rebates being threatened, it is no wonder that the market is lacking confidence.

The QTA and ATA along with other industry representatives have been lobbying hard to get the point across about the industries concerns on the impact of Carbon Tax, particularly the use of diesel in road transport. They have argued strongly that trucking operators should be exempt from the carbon tax altogether. It was pointed out that our industry has reduced its greenhouse gas emissions by 35% since 1990 and has cost us hundreds of millions of dollars to do so.

The PM quoted “families, tradies and small business people do not have to worry about a petrol price increase” and it was argued that 85% of trucking businesses have five employees or fewer, so are in the same position as small businesses as others in the economy that the Government has pledged to protect.

After hard attempts and efforts, the announcement was made that the trucking industry will be exempt from the carbon tax until the 1st July 2014. The first reaction was one of disappointment but the decision will give small trucking businesses breathing space and a further 2 years to continue lobbying and put forward the argument that there are a range of complimentary measures which Government can introduce to assist in contributing to a clean energy future other than a tax.

So currently the operators receive a tax credit of 15.043 cents per litre which on the 1st July 2014 will fall 6.858 cents per litre, matching the planned 2014-15 carbon price of $25.40. This is expected to cost the industry and its customers $510 million in 2014-15 alone. And it just gets worse. The industries fuel tax credits will then decrease each year as Australias tax carbon price rises. Operators will not be able to absorb the costs……our customers and Australian consumers will pay.

This delay till 2014 is giving trucking business breathing space to increase fuel efficiency and renegotiate contracts with their customers. This is why Cannon Logistics are researching innovative technologies to decrease the emissions of our operations because if fuel consumption can be decreased, then the cost of providing freight services can be decreased. It’s just good business. 

These initiatives are evident in the ‘Freight Smart Grant’ awarded to Cannon Logistics by The Queensland Transport and Logisitcs Council which was mentioned in our first blog, for work testing and implementing new refrigeration lubricants that potentially save up to 30% on running costs.

Cannon Logistics also have one of the youngest Fleets in Southeast Queensland with an average vehicle age of 2.5 years. This minimises emissions further by ensuring the latest mechanical technology and vehicle health.

Grants like the ‘Freight Smart Grant’, which encourage industry to look outside the traditional and actively pursue new and efficient technologies is definitely a path that has the preferred support of Cannon Logistics.

We will endeavour to keep you updated on the progress of our “Freight Smart Grant” and the continued discussions with Government regarding the carbon tax debate. To keep up to date on these issues, please subscribe to our blog.