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Urgent Toll Reform Needed As Daily Cost Outstrips Driver’s Wage

Wage Calculation

The New South Wales Government must show national leadership and reform its road tolling system for heavy vehicles with the revelation that Sydney tolls are outstripping the cost of driver wages, the National Road Transport Association said today.

NatRoad was due to appear before the Transport and Customer Service Committee of the NSW Legislative Council’s Inquiry into Road Tolling Regimes this afternoon, but the hearing has been postponed by the Sydney lockdown.

NatRoad’s written submission calls for a variable toll rate that incentivises off-peak journeys or gives discounts for multiple journeys, and creation of an independent regulator to manage a fair and transparent toll pricing regimen.

“High tolls are a burden that’s simply unacceptable for owner-operators operating on an average profit margin of just three percent,” said NatRoad CEO Warren Clark.

“They force trucks onto un-tolled suburban roads, generate noise and congestion, cause safety problems and increase emissions.”

Managing Director of Eastern Creek-based trucking company based Shaws Darwin Transport, Allan Thornley, says that the round trip cost of tolls ($140) for a typical delivery run from western Sydney to the Northern Beaches now outweighs the cost of a driver ($134) for the four-hour trip.

Mr Thornley estimates his company’s cost in tolls to operate a delivery truck around Sydney is about $38,000 a year. The cost of tolls has climbed since the opening of the M7 in 2005 and even more markedly in the last three to five years.

Costs for a 12-pallet rigid delivery truck trip from Eastern Creek to Brookvale and return
Driver’s wages for a 4 hour round trip $134
Capital cost of a rigid (half-day) $50
Tyres, maintenance and fuel $50
Cost of tolls

(WestLink M7, Hills M2, Lane Cove Tunnel and Military Road E-Ramp)

$140

 

“It’s come to the point where I even question the value of our drivers using tolled roads. The cost of the tolls seems to far outweigh all the other costs to operate a truck over the road,” Mr Thornley said.

“Most routes give only limited time and distance savings. They are generally easier for a truck to navigate with fewer corners and intersections, but the cost is significant and something we can’t control.

“We have looked at ways to offset tolls and it’s almost impossible to do so without introducing a lot of red tape.

“We are operating at scale on other routes so we can absorb some extra charges, but there are many smaller operators whose average net profit margin (after tax) has fallen to about 3% and aren’t so lucky.”

Mr Clark said truck operators pay a fuel-based road user charge and between three and 11 times more in registration charges than cars, depending on the weight of the heavy vehicle.

”They shouldn’t be loaded up with tolls that are generally three times greater than for cars.

“The country’s largest toll operator, Transurban, applies its own multiplier to trucks versus car tolls for road wear and repair using a logic that defies understanding.

“Modelling shows that of the extra $16.48 Transurban charges a truck over 20 kilometres on the M7, just $3.20 represents actual road damage costs.

“If charges reflected the real cost of road maintenance or the actual savings from using tollways, operators would be more likely to use them.”

Mr Clark said the concepts of variable toll rates and off-peak incentives were not new but Australian governments were notoriously shy of making them a reality. The catalyst would be the creation of an independent tolls regulator.

“Variable tolls that incentivise off-peak travel, or multi-use discounts, are simple mechanisms that would restore fairness and save communities a lot of grief,” Mr Clark said.

“Heavy vehicle operators and motorists alike would benefit from having a ‘cop on the beat’ to stop unfair toll road practices.

“The independent regulator would oversee an independent pricing system based on pricing rules agreed by the government.

“It would set service levels for the road network to facilitate high productivity vehicle access, future vehicle automation and truck rest stops.”

Mr Clark said NatRoad would be happy for the Independent Pricing and Regulatory Tribunal (IPART) to fill the role on an interim basis and then recommend a way forward, based on an analysis of all current government contracts with toll providers.


About NatRoad
With a proud history dating back to 1948, NatRoad operates to represent its members and as advocates for the $96 billion road freight industry. With more than 45,000 trucking companies employing more than 140,000 people across the country, the road transport industry is one of Australia’s biggest economic drivers.

NatRoad is a not-for-profit Association that is 100% funded via its membership fees and business partnerships. No funding is provided by government or unions. We know the road transport industry. Our board is made up of individuals who run transport businesses and have members from owner-drivers to road freight and large fleet operators, representing all aspects of the industry. General freight, road trains, livestock, tippers, express, car carriers, as well as tankers and refrigerated operators.

For interviews with Warren Clark or Allan Thornley, contact Craig Regan (0408) 448 527