Producers in Tasmania are facing higher transport costs linked to rising fuel prices, affecting the movement of produce to mainland markets.
The state exports goods valued at more than US$6 billion, with freight costs forming a key part of production expenses. Recent fuel price increases and surcharges are affecting both domestic and export supply chains.
Vegetable grower Harvest Moon reports rising operating costs across its production and distribution network. The company supplies around 90,000 tons of vegetables to national and export markets and uses approximately 3,000 litres of diesel per day across its farms and packing operations.
Managing director Mark Kable said higher costs are affecting harvesting decisions. "So it may get to that point where we won't harvest broccoli or cauliflower," he said. "The crops are looking magnificent at the moment, and this is our time of the year that Tassie shines, especially with the leafy greens, so it is very disappointing."
Freight costs are increasing across routes, with additional charges estimated at up to US$20 per pallet between Tasmania and Melbourne. Variability in pricing across shipping lines and transport providers is affecting cost planning. "The freight could be the tipping point," Kable said.
Producers report that wholesale markets limit the ability to pass on increased costs, as pricing is driven by supply and demand.
Transport costs across Bass Strait include surcharges linked to fuel prices, which are adjusted regularly. Shipping operators have shifted from monthly to weekly surcharge updates to reflect market changes.
Industry sources indicate that fuel price increases are also affecting input costs such as fertilisers and packaging materials.
Tasmania's position within supply chains adds an additional transport stage compared with mainland producers, increasing cost exposure. Exporters and suppliers are reviewing logistics and cost structures in response to current conditions.
The Tasmanian Freight Equalisation Scheme, designed to offset transport costs, is under review. Industry stakeholders indicate that the scheme remains relevant in managing cost pressures linked to freight and fuel price changes.
Source: ABC
