This arvo the FWC published its draft road transport contractual chain order (MS2026/1), the first use of the emergency powers created by the Fairer Fuel Act.
In summary:
🚚 The draft order covers the whole road transport industry, including long-haul trucking and platform-based couriers.
🚚 Primary and secondary parties in transport supply chains must adjust rates fortnightly to ensure operators recover increased fuel costs.
🚚 The fuel cost baseline is set at 6 March 2026, before the worst of the diesel price spike.
🚚 Adjustments can be made via rate changes, fuel levies, direct reimbursements, or any combination.
🚚 Existing rise-and-fall contract mechanisms will satisfy the obligation
🚚 The order takes effect 20 April 2026 and ceases to apply if the weekly average national terminal gate diesel price falls below $2.00 per litre
🚚 The order will be reviewed after one month and every three months thereafter
This process has moved incredibly quickly, from Royal Assent on 1 April to a draft order today. While technically open for consultation until Friday, I don't expect anything to change and expect this to come into effect as-is on Monday.
The substance of the order is sensible. Owner-drivers and small transport operators have been absorbing fuel cost increases that they have no ability to pass through because rates are locked in by long term contracts with larger clients sitting at the top of the supply chain. Without intervention, the predictable result was a wave of small operator insolvencies that would remove capacity from supply chain. The order addresses this by requiring the businesses at the top of the chain (retailers, manufacturers, mining companies etc.) to ensure that fuel cost increases flow through to transport operators.
The issue here is that these costs will have to land somewhere else, there are no free lunches. The most likely response is they get aggressively pushed onto consumers through rapid increases in food and retail prices. This will both further hammer already distressed households and push inflation higher.
For businesses that are utilising transport (which is almost everyone), this is going to be a cashflow impost in the very near term and modelling for the impacts should start now.