The Ups and Downs of the Western Australian Economy

the ups and downs of the Western Australian economy

Kwik Logistics is a company which has grown consistently over the years while having to deal with the ups and downs of the Western Australian economy. It has been developed by Craig Smith-Gander who comes from a varied background and not one steeped in the traditions of the trucking industry. 

He is a pragmatic man who seeks practical solutions to specific problems and then goes with it. His life experience started with 10 years as an officer in the infantry before moving into a a major construction business for a period, and then working in banking and finance.

When Craig was looking for a new challenge he came across a small crane hire business and this was the base from which the Kwik Logistics organisation has grown. In 2004, Craig bought into a business called Kwik Transport and Crane hire. It was a relatively small business but the books looked good and Craig decide to give it a go.

WA has been through a significant recession in the past few years meaning businesses like Craig’s handling crane hire and transporting heavy movable buildings and transporting them, has seen reduced activity. Now the business is beginning to expand again. The former Jonesway operation, which Craig has now included in the business, had been almost exclusively based on modular building transportation. Kwik Logistics has retained all of the trailers used for that kind of work but the business has got rid of most of its prime movers.

The buildings set to be moved are jacked up on custom built hydraulic lifts for the trailer to reverse in under, before they are lowered down onto the trailer bed. The process is then repeated at the site for the end-user.

“We need to retain a core group of experienced drivers,” says Craig. “It’s a bit different than just hiring a truck and getting a casual driver in. You’ve got to have a core group of people and then you have to be able to blend that in with additional human resources when you need them. You’ve got to have subcontractors, who can bring the trucks along or you have to have a pool of casual drivers who can be brought in to help out. 

“Luckily, we have a good group of people who do other work but are able to come in and help. We have what we call ‘team leaders’ who supervise all of the work and when the jacking is done they are controlling it, they are managing it.

“It’s because this is a specialist business, a project-based business. The economics of running this business is very different from someone who is running line-haul freight, where are you have a very good understanding of what you need on a day-to-day basis. Our customers will often give us two weeks notice of major moves, so we can’t have 30 trucks and 30 drivers waiting around fiddling their thumbs, waiting for someone to come along and turn them on.”

 

the ups and downs of the Western Australian economy

 

Instead, Kwik Logistics have developed a model which has a low fixed cost base and can access people and materials at short notice when required. There are now only 12 people working on the transport side of the business. All up, over the three sections of the business, which includes crane hire, traffic management and moving buildings, there are just under 100 permanent employees.

Because of the crane hire side of the business there is already a great deal of capital tied up in some rather expensive cranes. Being able to avoid even more capital equipment by using a leasing option for prime movers does allow Craig a little bit more flexibility and a little less exposure.

On an ongoing basis Kwik Logistics has at least four or five trucks in regular weekly work around Perth moving buildings and other items for customers. Having a crane hire business also as part of the operation, it is not unusual for a construction project to require cranes and heavy haulage equipment to move construction materials or building modules in and out of sites.

One of the emerging trends in the construction industry in Perth is the use of prefabricated modules in residential buildings. This means less disruption and time on site but the factory built housing module needs to be moved from the place where it was constructed to the site on which it will be set. Often these kinds of jobs can involve Kwik supplying crane, transport and traffic control for the same customer at the same time.

“When I bought the business, I could see there would be good deal of crossover between the crane business and transport business, and this has proved to be the case,” says Craig. “We’re also moving a lot of school buildings. It all happens in school holidays in a big rush. That’s a great example of whether two facets of the business works well together.

“Before we bought Jonesway, our crane business was 90 per cent of our business. Now, since we have developed the house moving business it represents around 40 per cent of our turnover.”

 

the ups and downs of the Western Australian economy

 

While a big part of the business is moving modular items around, Kwik still have to send the odd road train to the Eastern States, so it is exposed to the National Heavy Vehicle Regulator. The company needs to manage fatigue but when it is doing this specialised transport in WA they have to travel in daylight, between sunrise and sunset.

“Typically, you’re going to be under escort, but not always,” says Craig. “You’re going to be travelling no more than 80 km/h. Fatigue management is an interesting subset when you’re travelling in convoy in three large vehicles with escorts front and back. Fatigue management is probably not top of the tree for us, because of the nature of the work.

“Access is not such a big issue in the West, either. Main Roads in Western Australia are an effective organisation and we have a very good relationship with them, as do most heavy haulage people in the state. They are very efficient at providing us with permits, remembering most of our movements, especially the long-distance ones, are on state roads and so the local councils are not involved.

“However, local government intervention in transport matters by levying quasi tolls is becoming a problem. The Western Roads Federation, which I happen to be the chairman of, is extremely active in making sure that the state authorities are aware of what local government has been trying to do.

“It doesn’t just happen in the metro areas, it is also happening significantly in regional areas. Local governments see the mining industry, in particular, as a cash cow, and they then try and charge them access fees on local roads to mine sites, which can be incredible amounts of money for the local government. On the other side, it can also be a large cost to the mining or the transport company involved.” 

 

the ups and downs of the Western Australian economy