Kim Hassall
It has been a constant question as to what a Heavy truck sector should benchmark its cost changes against. Over the last thirty years the ABS produced the Road Transport Producer Price Index (PPI) whilst for decades the Transport CPI had been produced as an element of the national CPI.
Over the last decade special sector truck indices have been produced one of which was the Construction index that comprised a basket of half a dozen common construction truck configurations.
Table 1: Benchmark Truck used Index changes 2021-2026
| Time line | Construction truck index change | Road Producer Price Index Change | Transport CPI change |
| Base Year 2021 | 0.00% | 0.00% | 0.00% |
| 2021 to Jun-22 | 23.00% | 2.60% | 13.10% |
| 2022 to Jun-23 | -2.10% | 5.00% | 1.80% |
| 2023 to Jun-24 | 4.50% | 7.20% | 4.60% |
| 2024 to Jun-25 | 1.70% | 3.50% | -2.60% |
| 2025 to Jun-26 | 12.10% | 17.70% | 3.20% |
| Ave p.a.change | 7.50% | 7.10% | 3.90% |
Construction truck cost index extract from Translog data bases
Table 1 presents Construction truck fleet percentage cost changes and compares them to the ABS’s Road Transport PPI and the Transport CPI. The TCPI was used many years ago as it was the only public domain index available. However, some thirty years ago, with the invention of Australia’s Producer Price Index and its specific elements, road transport was one such element.
Around this time private specialist heavy truck indices were developed which could be then used as a bench mark for particular commodity operations.
The cost of current construction truck operations, especially in the high fuel price cost environment is examined in Table 1. In this table the construction truck cost changes are compared to the changes in the two ABS transport indices.
Basically, despite annual cost fluctuations the average per annum construction cost increases were 7.5% per annum. The Road Transport PPI was close to this figure an very different to the Road Transport CPI which has no truck component.
Should this per annum cost change be used for forward budgeting construction fleet operations. This level is some twice national CPI when it was 3.8%. This example should indicate that specialist indices can certainly be useful when seeking an appropriate contract escalation formula.