Future-Proofing Trucking

Future Proofing Trucking

The rate of change in the trucking industry looks to be increasing, and trucking operators need to be prepared for the brave new world of trucking we are likely to be living in, it needs to be future proofing trucking. Brendan Richards outlined his view of the future at the Trucking Australia conference in Darwin.

Future-Proofing Trucking
Brendan Richards, a partner at Ferrier Hodgson and Azurium, speaking at the Australian trucking Association’s annual Trucking Australia conference.

“Change is the new constant is the message,” said Ben Maguire, Australian Trucking Association (ATA) CEO, speaking at the opening of the annual Trucking Australia conference in Darwin, recently. “For generations, in the industry we have managed and embraced change, but what is catching us all by surprise is the pace increasing in that change.
“These challenges also represent opportunities – not only do the new technologies offer us a chance to change our businesses, but also the impact on how the regulators will apply those pressures on the industry and how the technology will influence that. With this progress comes increased expectations from customers.”
One of the speakers at the event, Brendan Richards – a partner at Ferrier Hodgson and Azurium – is no stranger to change, or the management of change. He has worked in the corporate world as an adviser for over twenty years, counselling organisations facing financial challenges. He is a ‘corporate restructuring and business performance improvement specialist’. He is also a regular commentator on industry issues in Diesel’s sister title, Prime Mover.
He addressed the conference, attempting to paint a picture of the years ahead for the industry and address some of the topics likely to come to the fore as we move through 2020 towards 2050.
“There’s a word going around, we are now living in a ‘VUCA’ world,” said Brendan. “It’s an acronym and it’s a very apt one. VUCA stands for volatile, uncertain, complex and ambiguous. If you can’t relate to that you might be a bit behind the game, because that’s the world we are living in. There’s no doubt we have come to some sort of inflexion point, with the rate of change.
“I have been looking at what 2050 might look like. Thirty-three years away sounds like a long time and with the way things are changing, how can anyone predict what life might be like in trucking in 2050? If you were to count the time backwards that takes us to 1985. To me, 1985 feels like yesterday. It’s gone unbelievably fast and the next 33 years will go by even quicker.
“By 2050, transport will be a quite different industry to what it is today. This issue is not whether the changes I will indicate will actually occur, but it’s more about whether they happen by 2030.”
Looking at transport today, there are 42,000 players in the industry. This figure has been relatively static for decades. There has been some consolidation, with firms like Toll undertaking 100 acquisitions over 25 years, for example. Of these operators, 41,000 have fewer than five trucks; many of them are owner-drivers. The top four players make up 15 per cent of the total market.
There is a reason for trucking being so fragmented; the barriers to entry are low. The industry has been built on ferocious competition, often seeing operators leading the race to the bottom, in terms of rates.

“There are trends emerging, which we are seeing more of across the whole global economy, not just in trucking,” said Brendan. “There’s a range of global megatrends. Globalisation is a significant one, so is digitisation, urbanisation, as is resource scarcity. All of these things are changing the mix of how the world operates.
“All of these things are happening in a world where there is increasing pressure and an increasing acknowledgement of the need to up the ante around safety and environmental protection. There’s a huge range of influences setting a new backdrop, which we all have to work in, as we push on to 2050.