View of the Future

Brendan Richards outlined his view of the future at the Trucking Australia conference in Darwin. For generations, the trucking industry has managed and embraced change, but what is catching us all by surprise is the increasing pace of that change.

“Globalisation is a significant issue in the way it reacts with the economy. By 2050, it’s expected China will be the world’s largest economy. By 2025, the Asia-Pacific region will make up something like 50 per cent of economic activity globally. There’s a huge shift in economic power coming towards the Asian region.

“For us, it will completely change how our economy sits in the world, relatively. The reliance on us by the Asian region for our resources means the Australian economy is extremely well positioned for growth. As our economy increases in size, that growth doesn’t necessarily filter down to wealth for all of us. We have a 20–30-year established pattern of decline in multi-factor productivity growth in Australia.”

Multi-factor productivity growth is the core statistic to drive incomes. Australia is experiencing a relative decline in incomes, when compared to economic growth. There are no factors on the horizon to suggest this trend will change. Governments will be dealing with a bigger economy, where the individuals working in it are earning less.

This means the tax take for the government is also declining, in relative terms. An extra burden is then placed on the federal budget to fund things like the infrastructure needs of a growing economy. This is not a healthy trend, going into the future.

There will also be population growth, coupled with an ageing population. In 1970, eight per cent of the population was over 75, by 2000 it was 13 per cent and by 2050 it is expected to reach 25 per cent. This means there will be the same number of people working as there is today and these are the people who will have to support a much bigger economy.

“Where is the population going to be living, and where is it growing?” asked Brendan. “It is skewing more and more heavily towards urban areas. In 2015, 86 per cent of population growth happened in urban areas, of which 55 per cent was in Melbourne and Sydney alone.

“We’ve got this increasing amount of people moving around in the same areas, with a smaller percentage actually working. Those working will be working less hours, earning less money and contributing less tax to the government to deal with it. This will force the government to turn to private enterprise to fulfil the infrastructure needs. The growing economy will mean more freight movement. We have infrastructure constraints today, let alone what that might look like in 2050.

“This is painting a difficult picture of how this is going to get managed, but there is one thing the private sector will turn to to solve these issues. The growth in the freight task will be increasingly skewed towards technological solutions. All of these influences come together to cause a significantly greater investment in technology and with that a range of additional transport modes coming into play.”

Brendan sees the traditional road, rail, sea and air modes being supplemented by several more. There will still be road freight movements and others, but new modes like digital will come into existence. This vision also includes a new form of hub and network mode of transport. Then there’s replication and drones.