The in­flu­ence of eco­nom­ics

The Aus­tralian road trans­port in­dus­try is not out­side the in­flu­ence of the Aus­tralian econ­omy, suf­fer­ing the ‘slings and ar­rows’ of the greater eco­nomic pic­ture. The last quar­ter of a cen­tury re­veals some im­por­tant pa­ram­e­ters that are both crit­i­cal to ope

Australian Transport News - - Contents -

The Aus­tralian Road trans­port in­dus­try is not out­side the in­flu­ence of the Aus­tralian econ­omy, suf­fer­ing the ‘slings and ar­rows’ of the greater eco­nomic pic­ture. The last quar­ter of a cen­tury re­veals some im­por­tant pa­ram­e­ters that are both crit­i­cal to op­er­a­tors, an­cil­lary fleets and even to pol­icy-mak­ers them­selves

The to­tal proper road task should be mea­sured in gross tonne kilo­me­tres ( gtkms) as even empty trucks, or just their tare weights, do a mod­icum of road dam­age. But more of­ten than not the road task is mea­sured as a net tonne kilo­me­tre task, which many econ­o­mists subscribe to.

Even rail pric­ing is based on gtkms as it is recog­nised that empty trains do track dam­age, so why not mea­sure the road sec­tor in the same way?


Al­though data is lim­ited to al­most the last 20 years, there have been some sur­pris­ing con­sis­ten­cies over the 1998-2016 pe­riod for the road trans­port task. Firstly, de­spite some hic­cups, both rigid and ar­tic­u­lated truck gross tonne kilo­me­tres have had growth of around 3.4 per cent per an­num over that pe­riod (see Ta­ble 1). What is sur­pris­ing is that, de­spite the e-com­merce boom, the ra­tio of task de­liv­ered by ar­tic­u­lated and rigid trucks has stayed rel­a­tively con­sis­tent at a ra­tio of 3.2 when the ar­tic­u­lated task is com­pared to the rigid truck task over that pe­riod. This is a very in­ter­est­ing task growth ob­ser­va­tion.

Fig­ure 1: Changes in the Ar­tic­u­lated and Rigid Aus­tralian Truck Gtkm Task Ta­ble 1: Trucks > 4.5 GVM – Gross Tkms Per­formed TO­TAL TONNES CAR­RIED

Over the 25 years to 2016, the to­tal Aus­tralian road freight task in­creased by 146 per cent (a fac­tor of 2.46) since the 1991 re­ces­sion year. These fig­ures pre­sented in Ta­ble 2 re­flect both the com­bined to­tal truck and light com­mer­cial ve­hi­cle (LCV) ton­nages car­ried in Australia over that pe­riod.

Fig­ure 2: The Aus­tralian Road Trans­port Task in Tonnes: 1991-2016 Ta­ble 2: Tonnes Car­ried All Road Trucks and s 1991-2016

Over­all, since 1991, the av­er­age com­pound­ing rate of ton­nage growth for the Aus­tralian road task has been nearly 3.7 per cent per an­num across all com­modi­ties. The rate of growth up to the 2007 global fi­nan­cial cri­sis was 4.7 per cent com­pound­ing per an­num.

Be­tween 2007 and 2015, the growth rate was only 0.74 per cent per an­num over that eight-year pe­riod, and this weak­ness has also been re­flected in the tight eco­nomic times for op­er­a­tors over this pe­riod.


Pos­si­bly least known about the Aus­tralian truck­ing pop­u­la­tion is who ac­tu­ally car­ries what. In Australia, as in all coun­tries, there are the car­ri­ers that do trans­port for money – hire and re­ward car­ri­ers – and oth­ers that carry their own goods as part of their op­er­a­tion. These op­er­a­tors are known as an­cil­lary op­er­a­tors, some­times called ‘own ac­count’ op­er­a­tors. Ex­am­ples of these op­er­a­tors are farm­ers, small re­tail­ers, small man­u­fac­tur­ers, some gov­ern­ment agen­cies, and lo­cal gov­ern­ments that do not out­source their op­er­a­tions to, say, a third-party lo­gis­tic provider but do the cartage them­selves.

“Diesel fuel prices have fluc­tu­ated be­cause of in­va­sions and ma­jor global crises”

Fig­ure 3: Aus­tralian Truck­ing by Fleet Type: 1996-2016

Ta­ble 3 re­flects the bal­ance be­tween the hire and re­ward (H&R) and an­cil­lary fleets and ve­hi­cle num­bers for trucks greater than 4.5 tonnes GVM over the last 20 years. Roughly the ra­tio of truck­ing fleets in Australia has ranged from six times more an­cil­lary fleets in 1996 when com­pared with the H&R fleet num­bers. Of re­cent years, this an­cil­lary ra­tio has dropped to 3.5 times the fleet num­bers in the H&R sec­tor.

The size of the an­cil­lary sec­tor of­ten comes as a sur­prise to reg­u­la­tors who of­ten only sur­vey op­er­a­tions and the per­for­mance of the H&R sec­tor. Cur­rently, Australia has lit­tle data on the main­te­nance, fa­tigue per­for­mance, and even kilo­me­tre per­for­mance of the an­cil­lary sec­tor. Fa­tigue re­searchers have also of­ten just re­lied on tele­phone lists and as­so­ci­a­tion data to do fa­tigue sur­veys, which ob­vi­ously re­stricts the anal­y­sis to the H&R sec­tor only.

It was only in 2015 that Australia had its first snap­shot of the driver fa­tal­i­ties in the an­cil­lary sec­tor, and yet we con­tin­u­ally ex­am­ine only the be­hav­iour of the H&R sec­tor through on-road en­force­ment find­ings and yet more H&R fa­tigue stud­ies that are said to re­flect the ‘whole in­dus­try’. Many re­searchers do not know what the an­cil­lary sec­tor is and even state freight flows are of­ten es­ti­mated by in­ter­view­ing road trans­port as­so­ci­a­tion mem­bers with­out talk­ing to any an­cil­lary fleets.

It is some­what a worry that the an­cil­lary sec­tor has come un­der such lit­tle scru­tiny. Most road trans­port as­so­ci­a­tions com­prise the H&R sec­tor and, pos­si­bly with the ex­cep­tion of the farm­ers’ fed­er­a­tions, the an­cil­lary sec­tor is rarely can­vassed with pol­icy is­sues.

Ta­ble 3: Aus­tralian Truck­ing by Fleet Type and Truck Pop­u­la­tion: 1996-2016

The num­bers of trucks in the an­cil­lary sec­tor has re­mained steady over the last 20 years, with a pop­u­la­tion of slightly over 200,000 ve­hi­cles. The H&R ve­hi­cle num­bers have grown from some 108,000 in 1996 to 162,000 in 2016, re­flect­ing sig­nif­i­cant out­sourc­ing to the H&R sec­tor. Within this H&R sec­tor, how­ever, the con­fig­u­ra­tions have evolved some­what, es­pe­cially as B-dou­bles and even per­for­mance-based­stan­dard (PBS) ve­hi­cles have emerged strongly over this pe­riod.

The B-dou­bles, which be­gan to grow from the mid-1980s, have now reached a pop­u­la­tion of some 19,000 ve­hi­cles, and PBS ve­hi­cles, which first emerged in 1997/1998, have hit a cur­rent level of some 5000 ve­hi­cles.

The de­cline in the 2016 num­ber of H&R fleets, how­ever, has been pri­mar­ily driven by the fall in owner-driver num­bers, es­ti­mated by one agency to be down by some 44 per cent since 2010, as well as sig­nif­i­cant con­sol­i­da­tion within the larger fleets due to a decade of poor eco­nomic con­di­tions for this H&R op­er­a­tor sec­tor.

Fig­ure 4: Aus­tralian Truck­ing by Fleet Type: 1996-2016

Source: NRTC 1999, ABS SMVU de­tailed data cubes 2006 and 2017


The road trans­port sec­tor com­prises more than the truck­ing sec­tor. It also con­tains postal and courier op­er­a­tions, and pub­lic bus and coach op­er­a­tions. How­ever, the to­tal road freight sec­tor is es­ti­mated to be 79 per cent of the road trans­port GDP fig­ure.

Fig­ure 5: The Road Trans­port Hire and Re­ward Con­tri­bu­tion to GDP

Source: ABS Na­tional Ac­counts: Pers Comm (ABS I/O con­sul­tants)

With the rise in pub­lic trans­port over the last 25 years, the ac­tual road freight com­po­nent of road GDP will be smaller than that pre­sented in fig­ure 5 but, even though the be­hav­iour will track be­low this line, the ac­tual in­dex will ex­hibit sim­i­lar be­hav­iours.

The June 1991/92 base year saw the road trans­port con­tri­bu­tion to Aus­tralian GDP at $10,255 mil­lion dol­lars. This grew by the end of the 2016/17 fi­nan­cial year to $23,856 mil­lion dol­lars. This re­flected a com­pound per an­num growth rate of 3.4 per cent.

How­ever, since June 2008, post the GFC, the road freight con­tri­bu­tion to GDP not only stalled but went neg­a­tive at 4.4 per cent be­low the June 2008 fig­ure.

In fact, since June 2008, Aus­tralian road trans­port has been in a chronic de­pres­sion – at least for the H&R sec­tor.

The road freight con­tri­bu­tion is car­ried by the ve­hi­cles in the H&R sec­tor and not by the en­tire com­mer­cial ve­hi­cle fleet. The an­cil­lary com­po­nent of road trans­port GDP is not re­flected in the na­tional road GDP fig­ure, but can be ex­tracted from the na­tional in­put-out­put ta­bles. Few an­a­lysts have even un­der­taken this ex­er­cise.

How­ever, a fur­ther in­di­ca­tor of the se­vere pres­sure in the H&R sec­tor is that many con­fig­u­ra­tions in the Aus­tralian road trans­port sec­tor are per­form­ing fewer kilo­me­tres on av­er­age than they did a decade ago, and fore­cast road pric­ing rev­enues are not com­ing to the road agen­cies. This re­flects the cur­rent ef­fi­cient road-pric­ing method­ol­ogy that may not make state trea­sur­ers ex­cited.


Over the last quar­ter of a cen­tury, diesel fuel prices have fluc­tu­ated be­cause of in­va­sions and ma­jor global crises. Fig­ure 6 re­flects an in­dex of raw Aus­tralian diesel prices av­er­aged across raw pump and bulk drop prices. This in­dex has not re­moved GST or the diesel fuel credit.

Fig­ure 6: The Aus­tralian Diesel Price In­dex: 1992-2017

The in­dex base of 100 starts in June 1992 and con­tin­ues for the 25 years to June 2017. In June 2008, at the peak of the GFC, oil prices hit a high of 281 in­dex points. This was a com­pound in­crease of 6.7 per cent per an­num to June 2008. Since that time there has been an eas­ing in fuel prices to 222 in­dex points, which has come as a re­lief to in­dus­try.

Over the full 25 years, av­er­age an­nual com­pound growth was 3.24 per cent per an­num, but be­hav­iour for this ma­jor cost in­put has been less than well be­haved and has had op­er­a­tors of­ten scram­bling for fuel levies in their cost es­ca­la­tion ne­go­ti­a­tions.

Fig­ure 7: Reg­is­tra­tion Price In­dices: Ar­tic­u­lated and Rigid Trucks: 1992-2017

The sec­ond bug­bear for op­er­a­tors is reg­is­tra­tion charges. Changes in charges are a con­stant source of lob­by­ing and ex­am­i­na­tion of the ap­pro­pri­ate use of the now evolved Na­tional Road Trans­port Com­mis­sion’s charges model that is still be­ing re­fined and ac­tively used in the road pric­ing de­ter­mi­na­tions. Al­though the model can be ar­gued as be­ing eq­ui­table and ef­fi­cient, as pric­ing should be, there have been some in­ter­est­ing vari­a­tions in truck reg­is­tra­tion charges over the last 25 years.

Again, from a base of 100 in June 1992, the bas­ket of ar­tic­u­lated trucks saw an in­dex growth rate of 3.46 per cent since June 1992 to June 2017. How­ever, since the GFC, or from June 2008, the ar­tic­u­lated reg­is­tra­tion in­dex has grown by 6.49 per cent per an­num to June 2017. As road trans­port GDP went neg­a­tive since June 2008, ar­tic­u­lated trucks have ex­pe­ri­enced al­most a 6.5 per cent in­crease per an­num for each of the last nine years. This has been a pretty hefty slug to the in­dus­try.

On the other hand, rigid trucks not in com­bi­na­tion, the back­bone of e-com­merce and many ur­ban de­liv­er­ies, have ex­pe­ri­enced a steady 2.91 per cent per an­num av­er­age reg­is­tra­tion cost in­crease over the same 25 years, al­though heavy rigids in truck and dog com­bi­na­tions have had re­cent large in­creases.


Over the last quar­ter of a cen­tury, road trans­port in Australia has ex­pe­ri­enced long-term growth, even though there have been sev­eral sig­nif­i­cant hic­cups along the way. Growth in gross tonne kilo­me­tres and tonnes car­ried has con­tin­ued to grow at 3.3 per cent and 3.7 per cent per an­num re­spec­tively.

Road trans­port GDP has gone neg­a­tive since 2008, and in the face of this, ar­tic­u­lated reg­is­tra­tion charges have in­creased by 6.5 per cent per an­num. Also, since the global fi­nan­cial cri­sis ended fuel prices have fallen, which has been a re­lief after surg­ing to a 25-year peak at the height of the GFC in 2008.

The an­cil­lary road trans­port sec­tor is still a much-un­known sec­tor of the in­dus­try. It con­tains more fleets and ve­hi­cles than its much-ex­am­ined ‘hire and re­ward’ coun­ter­part that is of­ten re-ex­am­ined in de­tail, es­pe­cially in the fa­tigue and main­te­nance ar­eas. We know lit­tle of the an­cil­lary side of the in­dus­try, which has 3.5 times the fleets and 30 per cent more ve­hi­cles than those thought of as ‘op­er­a­tors’.

In 25 years, we only know how many ve­hi­cles are in this sec­tor and al­most noth­ing about their safety, fa­tigue, main­te­nance or kilo­me­tre be­hav­iour. Maybe this is a study for the next 25 years.

How­ever, the ‘hire and re­ward’ op­er­a­tors are be­com­ing more pro­duc­tive and in­roads have been made with B-dou­bles, which have be­come the new work­horse in Australia, and the added ben­e­fits with the adop­tion of ve­hi­cle con­fig­u­ra­tions.

Both these ve­hi­cle classes have brought sav­ings and safety ben­e­fits to the road freight sec­tor. How low would road trans­port GDP have ac­tu­ally fallen if the sec­tor had been with­out these ve­hi­cles since the height of the GFC in June 2008?

The next 25 years will be an in­ter­est­ing story. Can his­tory teach us any­thing? Do we be­lieve Goethe when he said “the only thing that his­tory teaches us is that his­tory does not teach us any­thing”? Per­haps he was not talk­ing about road trans­port!

Source: De­tailed ABS data Cubes

Source: De­tailed SMVU data 1998, 2016

Source: ABS SMVU data 1991-2016

Source: ABS SMVU data 1991-2016

Source: NRTC 1999, ILI 2006 and 2017

Source: Translog Databases

Source: Ex­tracts from Translog Databases

Dr Kim Has­sall is a di­rec­tor of the In­dus­trial Lo­gis­tics In­sti­tute and chair education of the Char­tered In­sti­tute of Lo­gis­tics & Trans­port, Australia.

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