The National Road Transport Association (NatRoad) has warned that a proposed fuel cost recovery mechanism being considered by the Fair Work Commission risks creating a significant compliance burden for small trucking businesses already under financial pressure.
The Commission has begun hearings into a major application for a road transport contractual chain order covering fuel cost recovery across the industry. NatRoad says while the intent to support operators is positive, the practical implications of the proposal need careful consideration.
NatRoad Chief Executive Officer Warren Clark said the industry supports the principle of ensuring operators can recover rising fuel costs, but any mechanism must reflect how freight operations work in practice.
“We want every transport business in this country, from fleet to owner driver, to recover their costs,” Clark said.
“That’s exactly why we’re asking for this to be done properly, because a mechanism that sounds good on paper but can’t be applied in practice helps nobody.”
Clark said the complexity of modern freight movements makes detailed cost recovery calculations difficult, particularly for smaller operators managing mixed loads and multiple delivery points.
“How does a small trucking business calculate cost recovery on a single pallet of office paper, carried on a B-double with 50 other items, for 50 different customers, dropped at different locations?” he said.
“The proposal doesn’t answer that question, and until it does, it cannot be enforced, and it cannot be complied with.”
NatRoad also expressed concern that the proposed shift from a traditional fuel levy to broader cost recovery obligations could increase administrative requirements for businesses without the systems or resources to manage detailed cost modelling.
Clark noted that fluctuating fuel prices and varying operating conditions further complicate the process.
“Fuel costs can change before you leave the depot. City driving means idling in traffic. Regional driving means headwinds on the highway,” he said.
“How is a small operator supposed to calculate cost recovery for a trip before they’ve even taken it? This needs to be thought through and not rushed.”
The association also highlighted the commercial reality that much freight is moved without formal written contracts, relying instead on established relationships and informal agreements.
“You can’t impose a contractual obligation when no formal contract exists,” Clark said.
“Much of the road freight in this country moves on a handshake, a phone call, or a quote. That’s the commercial reality of this industry, and any workable solution has to account for that.”
NatRoad warned that mandating standardised cost recovery arrangements could also affect competition within the industry, potentially placing smaller operators at a disadvantage compared with larger carriers that have greater administrative capacity.
“Competition drives efficiency in this industry,” Clark said.
“We should be encouraging businesses to find smarter ways to manage costs, not designing regulations that punish those who already have.”
NatRoad is calling on the Fair Work Commission to convene an industry-wide conference to work through practical and enforceable solutions before any final decision is made.
“We are calling on the commission to resist pressure for a rushed outcome,” Clark said.
“The proposal before the Fair Work Commission is significant and complex. The industry should be given proper time to consider it, and not be expected to respond over the Easter weekend.”
The outcome of the hearings will be closely watched across the heavy vehicle sector, which includes hundreds of thousands of operators moving freight across Australia under the Heavy Vehicle National Law framework.
