Vehicle transport companies eyeing “Omicron Surcharge”

Omicron is playing havoc with some of Australia’s largest vehicle transport providers and, if rumours are true, will soon begin to introduce levies to cover the rising cost of pandemic-related staff shortages.

As reported, ASX-listed logistics giant Qube started charging its customers a levy of $28.50 per container this week citing the rising labour costs due to pandemic-related absenteeism.

“This impact is driving significant additional costs into our business as we attempt to provide ongoing services. Absenteeism within the national logistics industry continues to put undue pressure on all elements of the supply chain,” the company said.

“The need for the levy will be reviewed as markets return to normal when COVID eases, hopefully in the months ahead,” a company spokesman told the Sydney Morning Herald and The Age.

Qube, which has operations in every state, handles about 750,000 car imports a year as well as grain exports, timber imports and helps handle logistics for retailers like Woolworths.

Similar moves are being put in place with Australia’s largest privately owned logistics operator, ACFS, confirming that it had introduced a surcharge of $25 per container last Monday for the same reason.

The company has also considered reducing shifts due to the staff shortages which have to be covered by workers doing overtime, or bringing in external contractors. It also covers pay for those forced off work due to COVID.

Impact on Vehicle Transport

At this stage, we’ve not heard of specific moves to introduce an Omicron levy within the vehicle transport industry. However, with Qube’s stake in industry giant PrixCar Services, we expect it will be only a matter of time before equivalent levies are implemented there.

And, if this were to be the case, we believe other vehicle transport companies would respond and follow suit with prices expected to rise by between 1.5%-6% over the coming weeks.