A Doubling of Trucking
Road freight is expected to double in the next 10 years, growing faster than the economy as a whole and probably as much as the resource sector. I briefed the trucking industry on the policy implications of this, speaking today in a Volvo forum at the 2011 Brisbane Truck Show ( and the above photo shows me demonstrating totally non-existent driving skills in a simulated roll-over ).
The largest urban road project in Australia was built under the Carr government: Westlink M7, 42km running North-South through Sydney’s Greater West. It carved an hour off travel journeys by removing 48 sets of traffic lights. It was probably the country’s best example of public private partnership in roads.
There are going to have to be more such private tollways in urban areas to enable governments to build more roads in rural and regional Australia (where there is not enough daily traffic to support a private investment model).
The freight industry will also suffer acute skill shortages, that is of mechanics and drivers, as pressures on road transport mount as acutely as in the resource sector.
I told the industry that the pressures of a doubling in road freight would force governments to seriously consider the Henry report recommendations for distance-based taxation of the road transport. In the report that came out on May 2 2010 Ken Henry recommended that governments look at abolition of registration charges and taxation on diesel, with the introduction of taxation based on distance travelled.
The capacity to monitor distance is now being provided by the Intelligent Access Program in the process of becoming universal. The IAP is currently a voluntary program that allows heavy vehicles access to certain roads in return for monitoring compliance with access and speed regulations by using telemetics and satellite positioning.
The drivers of change in the industry are:
Fuel efficiency: Volvo’s new FH 16s are now saving 500 litres on a run from Ayres Rock to Darwin. It’s a figure like that will drive truck purchases in the industry. Of course fuel efficiency will also be driven by the introduction of carbon tax which is unlikely to exempt road freight.
Safety: Plans to expand the network of roads that can be used by B-Triples (three trailer trucks) have brought safety concerns to the fore. Statutory schemes, like NSW’s Chain of Responsibility which holds consignors, consignees and the ultimate client all responsible for safety are being implemented in every state in Australia.
Environmental performance: 36 per cent of transport emissions are from freight, and it is exceedingly unlikely trucks will be exempt from a carbon tax.
I concluded my address by saying all these implications would flow from the fundamental facts: a doubling of road freight within 10 years.