CEO UPDATE
Over the past fortnight, ALC has been working closely with the Australian Government through weekly fuel security briefings as conditions tighten across pricing, distribution and operator capacity. The Government has now stepped in with a material intervention, halving fuel excise for three months, reducing the Road User Charge to zero, and deferring the planned increase, delivering a 32.4 cent per litre reduction in tax to ease immediate pressure on operators. At the same time, national fuel security settings have been activated, with coordination now being managed more actively across jurisdictions and early work underway on fuel prioritisation frameworks. While these measures provide short-term relief, they do not change the underlying operating constraints and pressure.
Distribution capacity is fully utilised, regional supply remains uneven, and price pressure is moving quickly through the system, with operators carrying the most risk. While the Australian Government contends this is not a national supply issue, ALC, through its members, recognises that the supply chain system is under enormous pressure and that any response must recognise the interdependencies. We continue to work with government, sharing member experiences. Supply chain logistics and transport operators are critical to keeping fuel, food and essential goods moving and have a history of working to support Australia – as demonstrated through COVID-19. The ALC position is highlighted on a daily basis in highly focused policy discussions, including, for example, Ministerial Fuel Briefings, Ministerial Councils and the National Food Council, where ALC continues to reinforce that supply chain logistics is the fundamental economic and social enabler – food, fuel and freight operate as a single system, and resilience depends on how the system performs under strain.
UPCOMING MINISTERIAL & GOVERNMENT MEETINGS
UPDATES ON PREVIOUS SIGNIFICANT MEETINGS
POLICY SUBMISSIONS
WORK IN PROGRESS
POLICY SUBMISSIONS
LODGED
UPCOMING ENGAGEMENTS | 3 APRIL - 17 APRIL
- Effects of excise and RUC changes on operators, including whether relief is flowing through or being absorbed by rising wholesale diesel prices.
- Diesel availability and prioritisation settings, including risks to freight if supply tightens further under current geopolitical pressure.
- Current diesel supply levels to Sydney and key regional hubs, including any allocation or delivery constraints.
- Queuing, delayed deliveries, or reduced runs impacting supermarkets, construction, and critical freight movements.
- Supply pressure in northern and regional Queensland, including wet season impacts on fuel distribution.
- Reliability of deliveries to remote communities and any early signs of stockpiling or demand spikes.
- Terminal and distribution pressure in Melbourne, including any constraints at ports or storage facilities.
- Impact on last-mile freight and supermarket distribution, including lead times and delivery frequency.
- National diesel stock position versus demand, including burn rate under current conditions.
- Triggers for escalation under the Fuel Emergency Response Plan and how freight is being prioritised in allocation decisions.
This meeting will focus on current road safety trends, risks, challenges and initiatives within the heavy vehicle sector.
For further details or to contribute to these discussions, please email Samantha.leighton@austlogistics.com.au
PREVIOUS ENGAGEMENTS
The Australian Government has strengthened coordination arrangements, including the appointment of a Fuel Supply Taskforce Coordinator, Anthea Harris, to work across jurisdictions and industry. Weekly engagement with Minister King and her office will continue.
An update from Peter Griel of the Australian Institute of Petroleum confirmed that Australia’s overall fuel supply position remains stable. No systemic national shortage has been identified, minimum stockholding levels are steady, and additional cargoes are being secured from global markets.
Localised shortages are emerging in regional areas such as Broken Hill and Cunnamulla, where low stock levels and uncertain delivery timelines are affecting operations. Flooding has also disrupted key freight routes, limiting access to parts of the network.
Distribution capacity is fully utilised. There are no additional trucks available to increase delivery volumes, and sites are being depleted faster than they can be replenished. Conditions are changing quickly, and information is often out of date by the time it is shared.
For critical services, fuel access remains a priority. Emergency service operators, including aeromedical providers, are receiving assurances of supply, but visibility is limited to a two to three-week horizon. Price is the more immediate pressure, with limited ability to absorb or pass through increases.
Pricing is now the central issue.
Bunker fuel prices have increased from around $900 per tonne to approximately $1,500 per tonne in recent weeks. The cost of bringing a fuel shipment into Australia has also increased, with some cargoes exceeding $200 million once freight, insurance and financing are included.
These increases are moving through the system. Container transport operators are reporting that fuel surcharges are rising from around 20% to 40–45%. Other input costs, including tyres and maintenance, are also increasing.
Smaller operators are carrying the most risk. Many do not have fuel levy mechanisms in place and are managing rising costs with limited cash flow. Some operators are standing down equipment where costs cannot be recovered or fuel cannot be secured.
There are also early signs of allocation pressure. Some operators, including bus and passenger transport networks, are receiving reduced fuel allocations, in some cases up to 20% below normal levels.
ALC highlighted that the messaging from State Government roundtables on fuel security often differs significantly from that of the Federal Government-facilitated meetings. In addition, ALC made it clear that people are at the centre of this disruption. Fuel security pressures are adding to an already constrained operating environment, including workforce shortages, insolvency pressure and an ageing driver base.
This reinforces the need for the Australian Government to consider longer-term structural responses alongside immediate measures.
The Australian Government confirmed that work is underway on potential fuel prioritisation frameworks, coordinated through the Fuel Supply Taskforce. Current settings prioritise defence and health. Broader economic prioritisation is under consideration, with input being gathered across departments and fed into National Cabinet processes.
The Australian Government has also confirmed it has introduced amendments to the Fair Work Act. The Fairer Fuel Bill will enable emergency contract chain orders for the road transport sector. This is intended to support cost recovery amid rising fuel prices.
The Australian Logistics Council participated in the National Food Council meeting on 23 March 2026 at Parliament House alongside senior representatives from government, including the Hon Julie Collins MP, the Department of the Prime Minister and Cabinet, and ABARES. The discussion centred on national security, pressures on the agricultural system, and the role of supply chains in maintaining continuity amid disruption.
ALC’s contribution focused on a clear shift in how food security is being understood. Australia is not facing a production shortfall. The risk lies in whether food and essential goods can continue to move when the system is under pressure. Food, fuel and freight operate as a single system. When one is constrained, the impacts flow quickly across the others.
This view was reinforced through broader consultation undertaken by the Government. Feedback from over 400 submissions pointed to food security as a national security issue, shaped by exposure to global shocks, reliance on imported inputs, and the performance of supply chains. There is a consistent concern that current models are too dependent on just-in-time distribution and lack the depth and redundancy needed to manage disruption.
Fuel sits at the centre of this. Availability does not guarantee access. The system depends on freight to move fuel, and that same freight task relies on diesel to operate. Any constraint in fuel supply or distribution immediately affects the movement of food, agricultural inputs and essential goods. This is compounded by existing pressure across the freight task, including workforce shortages, rising costs, and limited surge capacity.
The discussion also highlighted that system stress is already visible. In remote Australia, higher prices and reduced access are driven by freight and logistics costs rather than production limits. This reflects how the broader system would perform under sustained disruption, just at a larger scale.
Freight rail and industrial land were identified as immediate pressure points. Rail provides existing capacity for long-distance, high-volume freight, but is not being fully utilised. At the same time, the loss of industrial land near key freight nodes is increasing costs and reducing network efficiency. These are current constraints on performance, not future risks.
The overall direction is clear. Policy is shifting away from measuring inputs such as production levels or stockholdings and towards whether the system can continue to operate under pressure. That includes the ability to move goods, secure inputs, maintain workforce capacity, and recover from disruption.
For ALC, this reinforces the need to position freight as a core national capability. Engagement with Government will continue to focus on system performance, fuel access, the better use of existing capacity, and the protection of freight-critical land. Member insight remains central to this work, particularly where it reflects real constraints, costs, and operational impacts.
The Australian Government has announced a package of temporary fuel relief measures alongside the activation of national fuel security settings. This is a direct response to sustained disruption in global fuel markets and increasing pressure across Australia’s supply chains. It reflects a shift from managing fuel as a commodity to managing it as a critical system input.
The package combines immediate cost relief with early-stage intervention to maintain supply continuity. It is designed to stabilise the system in the short term, while preparing for the possibility of tighter conditions.
At a headline level, the measures provide immediate relief to heavy vehicle operators. Fuel excise has been halved for three months, the Road User Charge has been reduced to zero, and the planned 6% increase has been deferred to 1 January 2027. Fuel tax credits have been adjusted accordingly. The combined effect is a reduction of 32.4 cents per litre in tax over the next three months.
- Fuel excise reduced from 52.6 cpl to 26.3 cpl
- Road User Charge reduced from 32.4 cpl to 0
- Fuel tax credits increased from 20.2 cpl to 26.3 cpl
- Net reduction of 32.4 cpl over three months
This is a material intervention. It provides immediate cost relief, improves cash flow, and eases some of the pricing pressure currently moving through the supply chain. However, it does not change the underlying operating environment.
Alongside these measures, the Australian Government has activated fuel security powers and is operating under the national framework for managing fuel disruption. This confirms that fuel supply is now being actively managed at a national level.
Key reference documents:
- Department of Climate Change, Energy, the Environment and Water – Fuel excise announcement
- Department of Climate Change, Energy, the Environment and Water – Fuel security powers
- Department of the Prime Minister and Cabinet – National Fuel Security Plan
https://www.pmc.gov.au/resources/national-fuel-security-plan
The National Fuel Security Plan sets out a staged escalation model, moving from monitoring through to direct allocation if conditions deteriorate.
- Stage 1: Monitoring and business as usual
- Stage 2: Market intervention to stabilise supply
- Stage 3: Prioritisation to critical sectors
- Stage 4: Allocation and control measures
For members, the immediate benefit is cost relief and some easing of margin pressure. The operating environment is shifting toward a more controlled system where distribution capability becomes critical.
The ALC expects the following to emerge across the sector in the coming weeks:
- Reduced input costs over the three-month relief period
- Increased government engagement, including requests for operational and capacity data
- Greater scrutiny of network performance, bottlenecks and constraints
- Potential inclusion of operators in fuel prioritisation and allocation frameworks
The central issue is movement. Fuel does not move itself. The ability to transport fuel at scale will determine whether supply reaches priority sectors. Freight operators are fundamental to this response.
The current environment also sharpens the role of freight rail. Australia already has a national rail network capable of carrying more freight than it currently does.
Better utilisation of freight rail would:
- Reduce overall diesel demand
- Provide additional capacity for long-distance movements
- Strengthen surge capability
- Relieve pressure on road networks
While the temporary reduction in the Road User Charge and the deferral of its increase provide necessary relief, they do not resolve the structural settings that continue to place pressure on operators.
GEOPOLITICAL & TRADE UPDATE
Development
Carriers are no longer treating the Gulf disruption as temporary. More services are now structured to avoid the region, with vessels routing via the Cape of Good Hope as a standard pattern rather than a workaround.
Why it matters
Longer routes reduce effective capacity. Ships are tied up for longer, rotations slow down, and schedules become less reliable. That tightens the market without changing demand.
For Australia, this means longer lead times and less certainty across imports and exports.
Implication for ALC advocacy
We need to keep pushing the point that disruption like this is not temporary. The domestic freight system needs to handle variability as a baseline condition, not an exception.
Development
With vessels taking longer routes, effective global shipping capacity has tightened. Analysts are now pointing out that rerouting is absorbing excess market capacity.
Why it matters
This is important. It means rates are not just reacting to disruption; they are being structurally supported.
Rerouting around Africa can add up to 11,000 nautical miles to voyages and significantly extend delivery times.
Even with more ships in the system, the longer routes are effectively reducing supply.
Implication for ALC advocacy
Freight cost pressure is not going away quickly. This strengthens the case for keeping freight costs and supply chain efficiency front and centre in policy discussions.
Development
The disruption is now visible in actual export flows. Kenya has reported millions of kilograms of tea sitting in warehouses as shipments to the Middle East are delayed or rerouted. (Shipping to key markets is still happening, but via longer, more expensive routes.
Why it matters
This is where it moves beyond logistics into trade outcomes. Goods are not just delayed; they are sitting idle, affecting cash flow, contracts, and downstream supply chains.
This type of disruption tends to spread. Once delays build in one region, they flow into others through vessel schedules and equipment availability.
Implication for ALC advocacy
This reinforces the need to look at supply chains end-to-end. It is not just about moving freight; it is about keeping trade flowing under pressure.
Development
The risk is no longer isolated to the Strait of Hormuz. There are growing concerns about escalation across the Bab el-Mandeb Strait, which connects the Red Sea to global trade routes.
At the same time, traffic through Hormuz has dropped sharply, with major impacts on global oil and shipping flows.
Why it matters
These are two of the most critical chokepoints in global trade. Pressure on both simultaneously significantly increases the risk to global supply chains.
Even partial disruptions force rerouting, increase costs, and reduce reliability across multiple trade lanes.
Implication for ALC advocacy
This reinforces the need to consider supply chain risk at a global system level. Australia sits at the end of long supply chains and is highly exposed to disruptions there.
Development
The risk of a global food shock continues to rise, with pressure building across fuel, fertiliser and freight.
Why it matters
Food supply chains sit across all three. When transport, inputs and energy costs move together, the impact compounds quickly.
For Australia, this creates volatility across both exports and domestic markets.
Implication for ALC advocacy
Food security needs to stay firmly in the logistics conversation. Movement is just as critical as production.
Development
We’re starting to see clearer differences between metro and regional fuel availability. Supply is holding overall, but distribution is tightening in parts of regional Australia, particularly where deliveries rely on long-haul road transport.
Why it matters
This is where system pressure shows up first. When fuel is available nationally but harder to move, regional supply chains feel it early. Agriculture, mining and regional freight are more exposed because they rely on a consistent diesel supply.
Implication for ALC advocacy
This reinforces that fuel security is not just about volume. It is about distribution and last-mile delivery. Regional resilience needs to be part of the national conversation.
Development
Air cargo capacity has not recovered. Network changes and airspace constraints are still limiting lift, and pricing remains volatile.
Operators are prioritising higher-value cargo, with lower-margin freight shifting back to sea despite longer transit times.
Why it matters
This is splitting the market. High-value freight still moves, but at a cost. Everything else slows down.
For Australia, this matters for pharmaceuticals, perishables and premium exports where timing is critical.
Implication for ALC advocacy
Air freight needs to be treated as core logistics infrastructure. It is not just about passengers. It underpins time-sensitive trade.
ALC IN THE NEWS
SUBMISSIONS LODGED
The Australian Logistics Council provided input to the Australian Department of Climate Change, Energy, the Environment and Water on the treatment of energy crops within the Product Guarantee of Origin (PGO) scheme. ALC supports a transparent, non-prescriptive certification framework to underpin investment in low-emissions fuels for hard-to-abate freight and logistics sectors. ALC recommends maintaining flexibility in feedstock eligibility, adopting a staged approach to incorporating broader lifecycle emissions (beyond farm gate), and implementing tiered emissions factors that combine default values with supplier-specific data. It also supports treating land use and soil carbon as transparent attributes rather than embedded emissions. ALC emphasises aligning the PGO scheme with wider policy settings—such as procurement and fuel incentives—to drive practical uptake, investment, and decarbonisation across Australia’s freight and logistics networks.
OPEN SUBMISSIONS FOR ALC MEMBER INPUT
2027 Occupation Standard
Classification for Australia (OSCA)
update
National Hydrogen
Regulatory Guidebook:
Pipelines
Rail Safety National Law –
Consultation Regulatory
Impact Analysis
Consultation Regulatory Impact Analysis Statement (C-RIS) on implementing a forward-looking cost base for heavy vehicle charges
For further details or to contribute to these discussions, please email: policy@austlogistics.com.au
Issued by:
Samantha Leighton,
Head of Government and Industry Affairs
Period:
21 March 2026 – 3 April 2026
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