Optimism as logistics industry anticipates strong growth into new year
Logistics IT firm CartonCloud reports that sector players continue to harbour solid positive sentiment about the coming year.
It remains to be seen if the bullishness continues to be recorded after various disruptions, not least with the trucking industry’s AdBlue shortage.
But the company sees confidence in Australia’s logistics industry as proving immune to industrial action and global supply chain challenges, with its latest CartonCloud Logistics Index (CCLI) showing strong optimism, job creation and growth expectations.
The latest edition is for the third quarter of 2021 with respondents providing feedback on business operating conditions, workforce and hiring outlook, growth, opportunities and challenges.
“The industry has registered its most positive level of sentiment so far this year and that’s despite industrial activity over the last 12 months and global supply chain issues,” CartonCloud founder Vincent Fletcher said.
“A strong logistics industry means a strong Australian economy and business sentiment is high across the economic outlook, performance expectations over the next six months and hiring potential.
“The industry is now smack bang in a period of massive activity.
“An overwhelming 90% of respondents believe the final quarter will be the busiest months of the year as Black Friday, Cyber Monday and Christmas ramp up consumer spending.
“Many companies are looking to invest in additional staff, increase their fleet, optimise operations with new technology and leverage third party providers in order to manage surging demand.”
Indeed the results come hot on the heels of CouriersPlease and Australia Post revealing they needed more resources to deal with the bumper peak season.
The CLLI revealed the potential of growth through the busy summer sales season meant optimism remained high for many companies.
Disruptions caused by industrial action and global supply chain delays were felt to have had an impact across the board with varying results, from no impact to major impact recorded.
The most significant impact was perceived by those in senior manager/business owner roles, and from respondents from combined warehouse and transport companies.
Read how the sector responded in the previous quarter, here
CCLI respondents said the industrial actions and global delays meant increased freight and other costs, delays in receiving parts or goods, delayed deliveries resulting in reduced warehouse storage rates and uncertainty around forward planning.
“Despite disruption to supply chains, the results of the index point towards a robust logistics industry able to adapt to economic challenges that emerge in Australia and overseas,” Fletcher said.
“There is a lot of enthusiasm amongst warehouse and transport companies and that is setting up the industry for a strong end to 2021 and a positive start to 2022.”
“CartonCloud will continue to track sentiment to understand where the industry has come from, how it’s performing now, and identify challenges and opportunities in the future.”
Some of the main points from the survey were:
- All respondents view the current climate as either positive or neutral. Respondents from warehouse and transport combined businesses responded with significantly higher optimism (74%) than those from warehouse (67%) or transport (40%) companies alone
- 100% of transport businesses predicted business performance in the next six months to be good or very good — only slightly higher than that of warehouse and transport combined companies, with 95% of responses for good or very good
- Hiring potential booms, with greater optimism for hiring in the coming six months. Overall, Q3 responses for the likelihood of hiring new staff in the coming six months saw a much more positive response than in previous quarters
- The most popular planned activity to cope with expected increase in demand across the industry is hiring new staff (58%), followed by outsourcing services (39%), and investing in new technology to increase output (39%)
- Combined logistics companies and high-level management are feeling the impact of recent industrial activity. Just short of half of respondents in senior managers/business owner roles said they had felt major impact from the industrial actions (44%)
- In general, there is a consistent perception that competition has increased over the past 12 months across all industry types. This was most visible in responses from the transport industry, with 40% of respondents believing the competition has increased in the past 12 months. One third of warehouse respondents agreed (33%), slightly ahead of warehouse and transport respondents with 32%.
Industry members can download the latest CCLI by completing the fourth quarter survey here.
Previous versions of the report can be found here.