‘Critical’ trucking crisis could see shop prices rise

Australia is facing a holiday trucking crisis as a fuel additive shortage threatens to raise shelf prices on a number of common goods.

A global shortage of vital fuel additive AdBlue, which helps limit pollution from diesel engines, is afflicting transport around the world.

Road Freight NSW CEO Simon O'Hara told Today that Australia got most of its AdBlue from China, who have widely restricted its distribution.

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The government has said Australia has five weeks supply of the product.

"What I'm seeing now is a lot of purchasing by trucking operators trying to get as much AdBlue as they can to keep the trucks running," Mr O'Hara said.

"Without trucks, as we know, Australia stops and if you look at half of Australia's truck fleet not being able to operate then we have serious concerns."

He said the federal government was "moving very quickly" to secure extra supplies of urea, which is used in AdBlue's production.

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Supermarket at Christmas

"The key here is that not only do we get a long-term supplier, we also get some short-term supplies quickly as well, and I know the government is talking to the Middle East, it reached a deal with Indonesia to get us some more," Mr O'Hara said.

"But these things within the supply chain are critical, and a lot of people wouldn't have heard of these sorts of things."

With trucking vital to the delivery of basic staples such as food, medicine and drinkable water, Mr O'Hara said it was "conceivable" prices could rise in shops and supermarkets.

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"What we are seeing is about a factor of six increases to AdBlue at the moment which is quite significant, sometimes higher," he said.

"The real question we have got here is how will the smaller operators be able to absorb these costs, because a lot of the time they don't have the power to get price increases as a result of the increase to AdBlue.

"But by and large what you will see is increases on the supermarket shelves and elsewhere. This is undoubtedly going to have an effect further on down the supply chain."

Australia does produce AdBlue domestically, but it only makes up about 10 per cent of the country's supply.

It is also more expensive than the overseas-produced additive, so expanding domestic production would increase prices.

"Prices would go up, but it just depends on how we would do it just depends on how we would do it, and the supply for AdBlue is always there, because our truck fleets are expanding to use AdBlue much more," Mr O'Hara said.

"So, it is certainly a growing market. So, you would have to think there would be a pretty damn good business case in there."

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