Do The New Rules For Fuel Cost Recovery In Road Transport Apply To Your Business?

Summary

• The Road Transport Contractual Chain Order has required fortnightly fuel cost rate adjustments across road transport contractual chains since 21 April 2026.
• Primary and secondary parties must take reasonable steps to confirm increases reach owner-drivers and platform workers further down the contractual chain.
• Rate adjustment obligations end once the national weekly average diesel price falls below $2.00 per litre.
• This guide explains the Road Transport Contractual Chain Order’s fuel cost recovery rules for businesses that engage road transport services in Australia.
• LegalVision’s business lawyers specialise in advising clients on road transport contracts and supply chain compliance.

Tips for Businesses

Record the fuel price at 6 March 2026 and your current transport rates as a baseline. Diary a fortnightly rate adjustment cycle. Ask each transport provider in writing how they pay owner-drivers and keep every reply on file.

The Fair Work Commission has introduced time-sensitive new rules, called the Road Transport Contractual Chain Order (RTCCO), that came into effect on 21 April 2026. They are legally binding, and breaches can attract penalties. This article explains who the order covers, what you must do, and how to protect your business from penalties.

What Do These Rules Do?

Because of rising fuel prices linked to the current Middle East conflict, businesses that rely on road transport must now pay more to cover the increased costs. The goal is to ensure the extra cost of fuel is shared fairly across the supply chain, from large businesses to individual drivers.

Does This Apply to Your Business?

The rules cover the road transport industry, including:

• general road transport and delivery;
• long-distance private road transport;
• waste management; and
• passenger vehicle transport (but not trams, monorails, or light rail).

The rules apply to everyone involved in a road transport contractual chain, so they will apply to your business if you are one of the following:

• a primary party: businesses that start the chain by hiring transport services (e.g. supermarkets, manufacturers, retailers);
• a secondary party: businesses further down the chain that subcontract the work (e.g. logistics companies, freight operators);
• a regulated road transport contractor: an owner-driver who owns and drives their own vehicle;
• a digital platform operator: companies like Uber or DoorDash; or
• a platform-based worker: such as an Uber driver.

What Are Your Obligations?

Every two weeks, primary and secondary parties must adjust the rates they pay to cover increased fuel costs. The increase is calculated as the difference between the current price of fuel per litre and what it cost on or before 6 March 2026.

First, pay your transport provider more. Work out how much fuel prices have gone up since 6 March 2026, and increase what you pay them by that amount. You can do this by increasing their rate, adding a fuel surcharge or levy, reimbursing the extra fuel cost or using any existing rise-and-fall mechanism in your contract.

Second, make sure the money reaches the driver. If your provider subcontracts to owner-drivers, paying your provider more is not enough. You have to take reasonable steps to check that the increase is being passed along. In practice, that means asking how they pay their drivers, requesting invoices or payment records, and confirming each fortnight that fortnightly rate adjustments have been applied. If a problem comes up later, you need to show what you did.

What Counts as “Reasonable Steps”?

The order does not define “reasonable steps” precisely, but the Fair Work Commission expects you to do more than simply ask once. In practice, reasonable steps mean:

• asking your transport provider in writing how they pay their owner-drivers;
• requesting payment records or invoices that show the adjusted rate;
• following up if you do not receive a response within the fortnight cycle; and
• keeping a written record of every request and reply.

If a driver later complains that they did not receive the increase, your records are your defence. A single unanswered email is unlikely to satisfy the Commission. Businesses that build a simple checklist into their fortnightly review process are in a much stronger position than those relying on verbal assurances. This applies equally to traditional contractors and workers engaged through digital labour platforms.

One exception: you do not have to chase the flow-through if the next business in the chain is a small business (under 15 staff) and not a transport business itself.

Your Obligations at a Glance

The table below summarises who must do what, and how often.

When Do These Obligations End?

The requirement to increase rates will stop once the national weekly average diesel price (as reported by the Australian Institute of Petroleum) drops below $2.00 per litre.

The Fair Work Commission will review these rules in late May 2026 and then every 3 months thereafter.

What Are Your Next Steps?

1. Map your transport contracts. Identify who you pay to move goods, who they subcontract to, and how each contract currently handles fuel pricing.
2. Review your contract clauses. If your contract only allows annual reviews, requires customer approval before any price movement, or has no fuel adjustment mechanism, you need to vary it now.
3. Set the baseline. Record the fuel price on or before 6 March 2026, along with your current rates, so you have a defensible starting point.
4. Diary the fortnightly cycle. Block time every two weeks to calculate the increase, pay it, and document the calculation.
5. Establish flow-through evidence. Ask each transport provider in writing how they pay their owner-drivers, request payment records, and follow up if they do not respond.

Key Takeaways

The RTCCO has applied since 21 April 2026. If you engage road transport services, you must adjust rates every fortnight for fuel costs above the 6 March 2026 baseline and, if you are a primary party, take reasonable steps to ensure the increase reaches owner-drivers and platform workers. These rate adjustment obligations apply across the entire contractual chain.

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Frequently Asked Questions

When Did These Rules Start?

The Road Transport Contractual Chain Order took effect on 21 April 2026. If you engage road transport services, the rate adjustment obligations have applied since that date.

Does This Only Affect Transport and Logistics Companies?

No. The rules reach across the whole supply chain, so they can apply to businesses that hire others to move goods by road, even if transport is not their core business. Whether they apply to you depends on your role in the chain.

How Often Do I Need to Act?

Covered parties adjust rates either fortnightly or twice a calendar month, on a single consistent cadence, and keep records of each adjustment.

When Do the Obligations End?

The requirement to adjust rates stops once the national weekly average diesel price, as reported by the Australian Institute of Petroleum, falls below $2.00 per litre. The Fair Work Commission also reviews the order periodically.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.