THE SLUGGISH economy, poor consumer confidence, and contracting exports expected for 2009 to 2010 are expected to have a negative impact on total freight movements and growth.
IBISWorld is estimating an average revenue growth of 3.0%. Road freight in particular, is expected to suffer as it faces tough competition from rail, and the impending Carbon Pollution Reduction Scheme will also see a shift from road to rail.
Fuel prices, a key factor in road freight, have plunged globally due to the industrial slowdown. This is expected to stabilise and begin to increase in the 2009 to 2010 period. However, the weakened Australian dollar means fuel prices at the pump have remained relatively steady despite the falling prices.
The demand for truck drivers remains high, and employment is expected to remain constant with an average growth of 1.6% per year up until 2014. The average wage is also expected to increase by 5.4% in 2009 to 2010.
Through 2008-09 and into 2009-10 IBISWorld expects operators to introduce or increase fuel surcharges to offset the increase in cost. This is will result a return to profits in 2009-10.
In late 2008 the Australian Government announced the introduction of a Carbon Pollution Reduction Scheme, setting a target of a 5.0% reduction in emissions by 2020. The Scheme will be introduced in 2010 and include transport fuels.
The scheme will impose permits on fuel producers with cost being passed down the supply chain. The Government has indicated an intention to offset any increase in the price of transport fuels with a cent for cent reduction in the fuel excise. For light vehicles this will apply for a minimum of three years. For heavy vehicles the fuel excise rebate will apply for only one year.
The industry is not expected to be significantly impacted as costs will be passed through to customers. Operators will take the opportunity to compete on emissions output and associated costs. Firms that invest in hybrid vehicles, larger and more efficient per tonne vehicles that use less fuel will be able to offer a price advantage over competitors.
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