A Victorian owner-operator says soaring diesel prices and rigid fuel account limits are pushing small businesses to the brink, despite recent moves to introduce fuel levies.
Kim Harbour, who runs single-truck operation Lockwood Transport Excavation with husband Andrew Hogg, said their business is now burning through fuel faster than their account can handle, leaving them scrambling to cover the shortfall.
Operating five days a week on a fixed contract, Harbour said their $15,000 fuel account limit had previously been sufficient. But with diesel prices surging in recent weeks, that buffer has all but disappeared.
“We’re teetering on blowing that $15,000 limit by the end of this week,” Harbour told Big Rigs late last month.
“That still leaves us with another five days we’ve got to cover for fuel.”
Harbour said the options provided by their fuel supplier have done little to ease the pressure. Suggestions to prepay funds into the account effectively defeat the purpose of having credit in the first place, she said, particularly in an industry where operators are rarely paid upfront.
“I don’t know any truck driver that gets prepaid for the work they do. We rely on those accounts for cash flow,” she said.
Alternative payment methods, including bank transfers or credit cards, come with delays or added surcharges, further tightening margins.
Switching fuel providers is also not a simple solution. Harbour said a secondary account they hold is both more expensive and impractical for their daily route, which is tightly scheduled and weight-restricted.
“We’ve got to get two loads in a day. If we divert to another site to refuel, it blows our timelines,” she said.
The couple recently secured a fuel levy through their contract chain, which Harbour said would help offset rising costs, which has also since been backdated.
However, that still doesn’t solve the on-going cash flow crunch.
Fuel costs for the business have nearly doubled in less than a month, jumping from around $1.55 per litre to $3 per litre.
That spike has pushed their monthly fuel spend from roughly $8500–$10,000 to well beyond their account limit.
“It’s just affecting all our cash flow. It’s a nightmare,” Harbour said.
The announcement late last month of a three-month halving of the fuel excise and the scrapping of the road user charge for the same period was welcomed. But Harbour said the real impact won’t be clear until future Business Activity Statement (BAS) periods, warning the next quarter could prove particularly challenging.
“I think this BAS will be okay. I think it’s going to be the next quarter that’s going to be a tough one,” she said.
“I think it’s the combination of the cash flow and playing the catch up, that’s going to be the problematic part,” she said.
Meanwhile, to stay on the road, the business is now being forced to dip into savings or rely on credit.
Harbour said she chose to speak out not just for her own situation, but for others in the industry facing similar pressures.
“There’s a lot of stress out there. Everyone’s worried about where this is heading,” she said.
Harbour believes more decisive government action is needed, particularly around fuel pricing.
“At the end of the day, it’s the government’s responsibility to act in the best interest of the people,” she said.
“It needs to be more than just tweaking excise. This is getting out of control.”
She pointed to discussions around potential disaster-style relief for diesel-reliant industries as one option that should be seriously considered.
“If they don’t start helping these businesses, it’s not just us that gets hit. It flows right through to the supermarket shelf.”
With costs continuing to climb and no immediate fix in sight, Harbour said many small operators are now operating on a knife’s edge.
“It doesn’t take much more of this before people start parking up.”
Sharna Chapman, who runs the four-truck operation Runnymede Trucking in northern Victoria, published her March fuel bill online to illustrate how much the war in Iran was now hurting the small operators. The bill had jumped from $42,003 in February to $76,603 in March.
“Same work, same runs. Not much had changed from February,” Chapman said.
“This is why I said the help [excise cut] was great BUT we need immediate relief not in a couple of months’ time. To some $35k isn’t much, but in the transport industry, margins are already so tight that this is quite a large sum to have to come up with.
“Income for this month won’t start flowing till 30-60 days – this will be the end of a lot of hard-working operators and I really feel for them.”
On March 26, Chapman posted that she’d had to park two of the trucks up to see out the end of the month.
South Australian Road Transport Association Executive Officer Steve Shearer said the relief measures, while welcome, fall short of addressing the immediate crisis facing operators.
Shearer warned the bigger issue is unfolding now, with operators struggling to pay March fuel bills that have effectively doubled.
“Everybody’s fuel bill in March is double what they expected it to be, and haven’t got the money for it,” Shearer said.
He said the situation is being compounded by tightening credit from fuel suppliers, with operators hitting limits earlier and facing demands for immediate payment before further fuel is supplied.
“Fuel companies say, ‘Well, Steve, you got to pay your bill, mate, I’m not going to give you any more fuel until you’ve paid your bill’,” he said.
Shearer said discussions are already underway with government to explore ways of easing these pressures, including broader financial assistance measures and potential intervention to reduce risk for fuel providers extending credit.
“We are exploring a number of forms of financial support and assistance,” he said.
This could include relief on state-based charges and mechanisms to support fuel credit arrangements, but Shearer stressed time is critical.
Despite the temporary relief from fuel tax changes, Shearer said the core problem remains unchanged – operators are not recovering the true cost of fuel from customers.
In a recent survey of SARTA members, it was revealed that 83.5 per cent have not managed to fully pass on the fuel price increase, and on average, they’ve only managed to pass on 42 per cent of the increase.
“For all those operators, they would be nuts to give their customers any of the 26.3 cent drop [in excise].”
He said the only sustainable solution is a fundamental shift in how freight customers respond to rising costs.
“The only truly effective solution is for every customer to understand that if they want transport of their freight, they have to pay the full price of the fuel,” Shearer said.
In the meantime, many operators are facing an uncertain future, with Shearer describing unprecedented levels of distress across the sector.
“In my 32 years, I’ve never seen it as bad as this,” he said.
“Really good, competent operators are ringing me more and more each day and telling me that they and their subbies just don’t know how the hell they’re going to get through.”
With fuel now accounting for a dramatically larger share of operating costs, Shearer said there are few options left for businesses already under strain.
“There is nowhere to get that money from other than the customer or selling your house,” he said.
“How many times can you sell your house?”
Tamworth-based interstate truckie Marty De Vos said the excise cut does little to address the real cost burden, arguing more targeted relief is needed to keep businesses afloat.
His top priority is removing GST on fuel specifically for owner drivers and small transport operators, describing it as a direct way to deliver immediate cashflow relief where it’s needed most.
He also called for broader cost reductions across the industry, including lowering registration costs by allowing trailer combinations to operate under a single registration, reducing duplication and easing overheads.
De Vos said toll relief for heavy vehicles should also be considered, arguing it would deliver immediate savings without adding red tape.
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