Unlike most other major world economies that were hit extremely hard by the Global Financial Crisis (GFC) in 2008/2009, the Australian economy faired reasonably well at the time. No doubt helped by the Federal Government’s financial incentives and the robust Australian economy. Today these major economies are flourishing, having put the pain of the GFC and the subsequent difficult fiscal decisions behind them. The Australian economy however seems to have stagnated. No more so than in the trucking industry. T-Mark figures released recently by the Truck Industry Council (TIC) show that while new truck sales were up in the July to September 2014 quarter, they still lag the pre GFC sales by almost 20 per cent. Compare this to our close relatives just across the ditch in New Zealand, who are having their best light vehicle and truck sales year on record, whilst in Europe and the United States truck sales over the past two years have approached or exceeded pre GFC levels.
It is not that there has been a downturn in the amount of freight that needs to be moved in Australia, in fact the opposite is true. In its recently released Australian Road Freight Estimates: 2014 Update, the Bureau of Infrastructure, Transport and Regional Economics (BITRE) stated that road freight had well and truly recovered from the GFC (2008-2010 Australian road freight grew on average just over one and a half per cent per year), however from 2010 on, average growth has been over four percent annually. Now some will argue that we are moving freight more efficiently (and we are) with combinations taking advantage of the likes of Higher Mass Limits (HML) and Performance Based Standards (PBS), but these more efficient vehicles alone do not account for the increased freight moved. There are more trucks on our roads than ever before catering for our ever growing road freight task.
The amount of freight that is being moved is growing and the number of trucks on our roads is growing, however new truck sales are well below levels seen before the GFC. So where are these additional trucks coming from? The answer is quite simple, operators are not retiring their old vehicles as we saw pre GFC. They are keeping their existing trucks longer and adding new trucks to their fleet when they have to. The net result, our Australian truck fleet is getting older. The average age of the Australian truck fleet is 13.8 years, in the case of rigid trucks the average age is even older, now approaching 16 years. This is approximately double the truck age of countries that we would like to compare ourselves with in Europe, as well as North America and Japan. With the increased average fleet age comes the penalty, a slower uptake of the modern safety and environmental features found in today’s new trucks. These reduced safety and environmental outcomes fly in the face of governmental policy, but as yet we have seen little government action to avert the growing age of our truck fleet. Unlike countries such as Japan, many in Europe and certain States in the US, Australia has no incentives in place to make the purchase of a new safer, cleaner and greener truck an economically attractive proposition. Without such incentives I can only see the Australian truck fleet getting older. Government does have options to address the reality of our aging truck fleet, options such as those proposed in the TIC National Truck Plan. I am pleased to say that some levels of government are now discussing this aging issue with TIC and other industry groups.