Future looks bright for transport

As a refreshing change, Diesel News can report some optimistic forecasts for the year ahead with a survey from the Commonwealth Bank finding increased confidence about the future in transport and logistics companies.

 

According to the Commonwealth Bank Future Business Index, the transport sector is performing well and ready for any future fluctuations in the market. Signs of growth in retail, agriculture and mining recorded in the index are seen as good indicators for transport, on which these sectors depend. This positive analysis comes at the same time as more gloomy predictions for other sectors like property and construction.

 

“The Transport & Logistics industry is this quarter’s success story, bouncing back from more subdued readings over the last six months to lead the mid-market,” said Micael Cant, Executive General Manager Corporate Financial Services Commonwealth Bank, in the report. “Eighty-eight per cent of Transport & Logistics firms expect their business performance to improve in 2014.

 

“The performance of the Transport and Logistics industry is typically representative of broader economic conditions, so it is encouraging to see a dramatic increase in confidence among these businesses. Optimism across all businesses is being driven by a number of factors, most notably stronger revenue and profit expectations. Notwithstanding the buoyant sentiment across the mid-market, there remains a level of conservatism as businesses continue to focus on managing costs.”

 

The survey by the Commonwealth Bank of 422 financial decision makers in both public and private companies was carried out at the end of 2013. Companies surveyed range between $10 million and $100 million, in terms of turnover.

 

“Transport & Logistics was the standout performer this quarter, recording the highest Future Business Index reading of any industry,” said the Comm Bank report. “Buoyed by rising revenue and profit expectations and lower levels of concern about energy and fuel costs, the industry also stands out as the only industry group where over half say they are well prepared for future volatility.”

 

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The index for transport and logistics moved from –8.4 in September to 38.7 by the end of the year. 57 per cent of businesses expressed the feeling they were well prepared. Regionally, the index rose most in New South Wales, with business expressing renewed confidence. Western Australia also lifted with a recovery in confidence, probably linked with increased activity in the mining sector.

 

Food for thought in 2014

The new year brings with it the need for a fresh look at the business of trucking. This is the time to set goals and look for new opportunities in 2014. The economic climate looks to be heading in a positive direction, albeit slowly, and there are signs of structural changes in the distribution of goods.

2014 Transport and Logistics Insights from Ferrier Hodgson tries to identify the kind of trends the transport industry needs to be aware of in the year ahead. Our industry represents 15 per cent of Australia’s gross domestic product, generating $201 billion each year with links to every aspect of the nation’s economy. Of this figure, road transport represents $48.3 billion in revenue for the 42,000 trucking operators in the country.

 

Three new opportunities are identified as important in 2014. An increase in the volume of agricultural exports to Asia is being predicted, with transport being a vital part of the equation. The growth in online shopping is having the effect of increasing the volume of goods being delivered direct to homes. Incoming containerised freight continues to rise at quite a pace following an 80 per cent rise in the past ten years.

 

As a result of these changes the trucking industry will have to adapt and grow to meet the challenge. Much of the new business involves large multi-national companies which tend to prefer to deal with larger blue chip operators and not small local contractors.

 

“Primary contracts are shifting to the industry majors who can demonstrate the advantages of global scale, competitive rates and freight visibility while demonstrating best-practice safety processes,” says the report.

 

The increase in online shopping does, logically, mean there will be a reduction in the number of freight movements in and out of distribution centres servicing traditional retail outlets. At the same time, new technology development continues to move ahead. Integration between business and their transport suppliers control systems often means more investment in equipment for the transport operator, either in vehicles or in the operations and billing control systems.

 

Fuel costs continue to rise and show no sign of ever going back down. At the same time, the reduced costs reckoned to flow from a National Regulator look like a long time coming, as disputes and hold ups continue. Add to this a shortage of skilled drivers and increasing traffic congestion in the capital cities, and the cost base for the industry remains difficult to quantify.

 

In their report, Ferrier Hodgson see good opportunities for smart operators who embrace change. However, there is a word of warning to mid-tier road operators struggling with difficult trading conditions and high levels of competition. They are squeezed between cheaper smaller operators and large competitors who can offer better customer service. As a result, they become price takers, reduced to sub-contractor status.

 

“Operators with a focus on establishing and maintaining a niche offering, bolstering their safety and compliance regimes, embracing collaborative networks and adopting new technology, will stand out from operators who ignore the challenges,” concludes the report.

New report to help software developers and transport operators improve fatigue management

Austroads ReportAustroads has released its report Nationally Consistent Heavy Vehicle Rest Area Data Definition Framework which it hopes will be used to help transport operators and third-party Intelligent Transport System (ITS) software designers create products to help truckies improve fatigue management.

The report proposes a data definition framework to describe Heavy Vehicle Rest Areas (HVRAs).

HVRAs are generally provided by state road agencies (SRAs), but others are provided by the private sector, local governments and the community.

Having a consistent data definition framework for HVRA characteristics will allow, over time, for SRAs to provide information that can be used to help drivers and road transport companies meet fatigue management regulations says Austroads.

The HVRA data definition framework has been developed within the context of all rest areas and other SRA roadside facilities.

The framework is intended to be used by third parties to develop Intelligent Transport System (ITS) software for trucking companies or by drivers using mobile applications.

Austroads claims a common data definition for HVRAs may lead to greater consistency in navigation system design and truck journey planning systems.

“It is intended to allow development by third parties of selected real-time HVRA performance and feedback systems. In turn it will provide a potential means of feedback,” Austroads says.

The use of HVRA data by trucking companies will allow jurisdictions to more effectively inform industry of the HVRA network what is available to drivers, leading to improved fatigue management.

“When this occurs, full value will be gained from government investment in HVRAs,” says Austroads.

The publication is available online https://www.onlinepublications.austroads.com.au/items/AP-R443-13.

Finding skilled labour for Heavy Vehicle Transport sector a major issue says report

MAD D2 BTS 13_2688A new report highlights shortfalls in retention and finding skilled labour in regards to the Heavy Vehicle Transport sector as well as a sharp drop in Vehicle Body Builder apprenticeships with a reduction of 54% and high cancellation numbers across many apprenticeships.

However, the report also suggests significant increases in apprenticeship levels in most areas of the Heavy Vehicle Transport sector.

The Future Trends in Workforce Demand and Occupational Priorities for the Commercial Vehicle Sector in Queensland 2013-2018 report released by the Commercial Vehicle Industry Association of Queensland (CVIAQ) states businesses in the Commercial Vehicle sector are experiencing a shortage of skilled labour across a number of trade areas, with the highest shortages occurring in the trade areas of Heavy Commercial Vehicle (HCV) Technician, Boilermakers and Vehicle Body Builders, followed by Sales and Parts Interpreters and Automotive Electricians respectively.

The report suggests the main reasons organisations were experiencing shortages were:

  • Lack of suitably skilled workers
  • Salary competition
  • Attractiveness of other industries
  • Labour shortage
  • Attractiveness of the Resources sector

The report also indicates this shortage of skilled labour is impacting on business by causing a lack of capability to complete work on time and to tender for contracts.

“Businesses are impacted further by newly employed qualified workers not having the necessary skills or experience resulting in an attrition rate of 50% in such workers during a trial or probationary period,” the report states.

The majority of businesses taking part in the survey have a trades and technician based workforce indicating the industry has a reliance on a robust technical training system to provide its future workforce.

In this regard, apprenticeship in-training numbers have either remained relatively stable in relation to apprentice Sales/parts Interpreters and Vehicle Body Builders, or increased slightly in relation to apprentice Light Vehicle Technician, HCV Technician, Boilermakers and Auto Electrician in-training numbers from July 1, 2011 to July 1, 2012. From 2010-2011 to 2011-2012, there have been significant increases in apprenticeship commencement numbers across the following apprenticeships:

  • HCV Technician from 344 to 545 (or 58%)
  • Auto Electrician from 188 to 288 (or 49%)
  • Light Vehicle Technician 1,231 to 1,589 (or 29%)
  • Boilermaker from 1,519 to 1,755 (or 16%)

The only reduction in commencement numbers has occurred in the Vehicle Body Builder apprenticeship with a reduction of 54% from 201 to 92 from 2010-2011 to 2011-2012.

However, cancellation numbers have also increased at an alarming rate across some of the apprenticeships with the following levels of cancellations occurring from 2010-2011 to 2011-2012:

  • Auto Electrician from 71 to 100 (or 41%).
  • HCV Technician from 145 to 183 (or 26%).
  • Light Vehicle Technician from 642 to 718 (or 12%)
  • Vehicle Body Builder from 56 to 74 (or 32%)

The report states completion numbers for these apprenticeships however, have remained relatively static.

This paper was commissioned by CVIAQ for three main purposes according to CEO Brett Wright.

Firstly to assist the industry in understanding the workforce challenges it faces over the next five years and enable it to plan accordingly.

Secondly, to educate industry on the structure of the Vocational Education and Training (VET) system in Australia and what role each stakeholder plays and thirdly, to inform government of the critical role the industry plays in underpinning the “four pillar” economy of Queensland and make recommendations for initiatives which will positively benefit the industry and the state economy.

The CVIAQ used the official opening of the Brisbane Truck Show attended by the Hon. Campbell Newman MP, Premier of Queensland and the Hon. Scott Emerson MP, Minister for Transport and Main Roads, to launch the report.

Click here to download a copy of the report