Western Roads Federation – Are the wheels falling off?

Over to you WESTERN ROADS FEDERATION by Cam Dumesny, CEO

ARE THE WHEELS FALLING OFF?

The Western Australian Transport and Logistics industry have been the unsung heroes of this pandemic.

Despite bushfires, floods, lockdowns, chaotic border rules – WA businesses, industry and our community have been supplied.

Public Recognition – well that’s in absolutely short supply.

But as I write this, it has become patently clear that the wheels are now beginning to fall off, as a combination of factors all begin to bite.

Increasing Operating Costs for Transport

So many members have said, “Our revenues have never been higher, but we are making nearly no profit because costs are blowing out.”

Given the shortage of skilled labour (including Drivers) companies are now paying far more to attract and retain people. But other operating costs have risen too, such as: • Tyres – reported increases of 15 to 20% • Fuel – up 30% in the last year (noting not all have fuel levy’s in their contracts) • Spare Parts- combination of shortages and price rises • Service Cost – increases due to shortage of skilled labour • Non-Productive Costs – combinations of driver shortages and spare parts delays have meant some trucks parked up – meaning no money coming in – but payments still going out.

Freight Demand Up and So Are Prices

Whilst some are in locked in contracts, others have been able to escalate rates to reflect the new market conditions. Its not uncommon, to hear of transport companies increasing freight rates in some segments by more than 20%.

But even then, some of those who have managed to secure such increases say that costs are increasing even faster.

Companies Refusing Cross Border Work

The draconian conditions imposed on truck drivers coming from the hard border closed areas of Vic and NSW have led to increasing numbers refusing to come to or leave WA.

Commendably, companies both in the East and here in WA are now actively seeking to protect their driver’s welfare by avoiding taking on work that requires them to leave WA or come to WA. With already over-stretched demand for road transport across the paddock, the loss of capacity due to withdrawal of services by some operators is going to hurt WA.

In-conjunction with Tim Dawson from the TWU we have secured a meeting with the Deputy Chief Health Officer, Police and the Department to come up with better solutions for our cross-border drivers. I pay credit to Tim for securing that meeting.

We need solutions that give confidence to the Health Department BUT also provide greater respect and freedoms to our drivers. Drivers have not only earnt that right, they deserve it.

Vaccinated drivers

At the time of writing this, the Government deadline for vaccination of drivers is approaching. A number of drivers have chosen not to get vaccinated and as such companies are reporting a loss of drivers. Estimates on the actual numbers are

difficult but depending on the transport segment and location those choosing not to get vaccinated would be in the order of 5% to 10%.

Even a number like that when we have such a chronic skills shortage of drivers hurts.

WA Bureaucracy’s Head in the Sand Approach to the Supply Chain Issues

Freight is moved by Road, Rail, Sea and Air, all of which have major issues.

Every mode has issues: • Road: just some of the issues are listed above, • Rail: shortage of train drivers and reports of on-going cross paddock constraints, • Shipping: well reported global shipping crisis • Air Freight: reported 80% reduction in air freight capacity

These issues have helped drive up costs and delays for our members, industry, customers and community.

WA State Development (JTSI) and WA Treasury both want information on how this is impacting WA.

EXCEPT, the WA Department of Transport.

They have shown absolutely no interest.

Despite sending briefs on the issue to them.

Despite us and others having supply chain issues in the mainstream media nearly every other day.

Despite reports of potential job losses in sectors like manufacturing, retail shortages at Christmas, even one claim of a potential risk to food supply, we have heard nothing, absolutely nothing.

Nothing, from the very section who should have been calling for urgent meetings with industry to understand the issues and what can be done about it, so as to prepare briefs for the Minister on potential solutions.

So, whilst the US President and Global leaders of the 20 biggest economies at recent G20 meeting have all identified supply chain issues as a major economic threat, in WA we cannot even get mid-level bureaucrats responsible for supply chain transport to answer emails.

So, are the wheels falling off?

Well only you can answer that?

But whilst I think they are, I also know our industry is full of incredibly smart and practical people.

People who despite facing challenges that would dishearten mere mortals, the unsung heroes in our industry will always find a way to make it work.

Global leaders of the 20 biggest economies have all identified supply chain issues as a major economic threat, in WA we cannot even get mid-level bureaucrats responsible for supply chain transport to answer emails

WESTERN ROADS FEDERATION IS THE UNITED VOICE OF WA TRANSPORT COMPANIES

Western Roads Federation has been formed to give a strong unified voice for companies who use WA roads for commercial benefit. Western Roads Federation is a membership driven organisation. If you believe in the industry and what you do, then make sure your company is a member, and get involved. For a membership application form Email cam.dumesny@westernroads.com.au ◆ Phone 08 9365 7799 or 0481 064 371 180 Hay St, East Perth WA 6004