According to a report released today, one of the issues facing the Australian economy and specifically the trucking industry is the need to improve productivity in productivity improvements. We’re spending billions of dollars on infrastructure to improve productivity, but the productivity involved in creating this infrastructure is not very high.
It would appear we’re wasting billions of dollars, which we can ill afford, when creating productivity improving infrastructure, which takes so long it can barely keep up with increased road traffic. A report published today talks about projects which are notoriously being delivered late and over budget.
This is not the kind of behaviour which would be acceptable in the road transport sector, if freight was delivered late and over budget then we don’t get paid and the wheels of industry would grind to a halt. Not an ideal situation.
The report has been published by Dr Ahiaga-Dagbui, who researches within Deakin’s School of Architecture and Built Environment and it outlines the continuing overspending and lack of real productivity within the infrastructure building sector.
It is probably arguable that the only component within many of these giant infrastructure projects which could be said to show a high-level of productivity would be the road haulage component. If there is a major project happening multiple operators will be preparing tenders and competing strongly to get the work.
Clearly elsewhere in the infrastructure building world things aren’t quite as competitive and a lot of fat is included in the price.
Of course, the scale of some of these infrastructure projects does mean unforeseen circumstances can cause major upsets. Geological problems for road projects, difficulty in accessing the raw materials for building and other factors can often mean that a project will be delivered late or over budget.
What is probably unforgivable is the fact that so many of these projects are not only late but also over budget. This situation is also likely to get worse in the next decade or so. There is little likelihood that projects like the new Sydney Airport will be cheaper than planned or arrive early.
The recent report from Infrastructure Australia is telling the government that the recent spate of infrastructure spending is not enough and further billions of dollars need to be spent in the next 10 years in order for Australia to be able to grow its economy in the way it would wish.
The report tells us that over $100 billion has been spent on transport infrastructure since its previous audit in 2015. It also tells us that the economy is being stifled by continuing increases in congestion on our roads which continues to compromise productivity.
Looking at it from this perspective of somebody who has worked in the road transport sector for their entire career, it seems that the only industry which has been consistently highly productive is also the one which is being made less productive by all of the other industries, which don’t seem to care about improve productivity.
It looks like the trucking industry is stuck in a situation where it needs to wait for the rest of the economy to catch up with the commercial reality of the real world.