Growth in population and construction plus demand from Asia keeping forecasts strong
Transport operators will have opportunities to capitalise on growing demand in years to come, due to “infrastructure and construction booms and the needs of a growing population”, according to an industry report.
The fourth-quarter market overview report from insurance broker Gallagher, titled Reflecting on a year of change, analyses recent developments and future outlook for a number of industries, with transport deemed to be well placed for future growth.
The report references studies predicting truck traffic to increase 50 per cent by 2030, with Australia’s population pushing towards 30 million in the same period, meaning “this traditional industry can only become more pivotal to our economy”.
Looking back on the past year, it reflects on a year of significant change, despite it being an industry that is “sometimes regarded as slow to adapt”.
Gallagher’s main developments for transport in 2018 include:
- In-cab driver monitoring systems gathering pace and take-up (telematics has been gaining traction for some years, it notes)
- Big legislative change impacting the transport sector in the form of tighter Chain of Responsibility (COR) measures
- Operators with distribution centres facing increasing property insurance premiums due to major fires at warehouses across Australia that have heightened insurer scrutiny on expanded polystyrene (EPS) panelling
- Enduring trends of an ageing workforce and the relative shortage of trained drivers in Australia showing no sign of abating.
On driver monitoring systems the report says: “In a sector suffering from increasingly tight margins, telematics systems can play a pivotal role in reducing fuel use and tyre wear, and assist with establishing reliable cost/kilometre ratios.”
While it notes the technology can be expensive and some companies can be reluctant to make the investment, the human cost aspect and reducing the risk of heavy vehicle accidents “makes business sense to all parties”.
Toll was one such company to invest in driver monitoring technologies. Read more here
Regarding COR, the report reiterates the well-documented changes defined by Section 26C of the Heavy Vehicle National Law (HVNL), with primary duty obligation now extended along the supply chain and the maximum fines for breaches ranging from $300,000 and/or five years’ imprisonment for an individual to $3 million for companies.
However, “While those penalties are potentially severe, the legislative changes are unlikely to present significant compliance challenges for larger operators who already have strict processes in place around reporting and adherence to requirements.
“An upside may actually be that the changes should empower operators to push back against unreasonable or illegal clauses in suppliers’ contracts.”
The report cites a move towards a society increasingly valuing work-life balance as contributing to a decline in the appeal of long-distance truck driving.
While it doesn’t propose a solution, the void will have to be filled as Australia’s growing population, combined with an increasing demand from Australian products from Asia, “equates to a strong and sustainable need for freight services”.
A concluding sentiment that “the sector is buoyant and enjoying a period of swift growth after some tough years” was recently confirmed by National Australia Bank’s October business survey, which found that, while business confidence fell to a yearly low last month in Australia, transport and utilites was one of only three industries – alongside construction and wholesale – to contradict that slide.