10 minute read
How transport operators can survive a recession
Aleading business expert is tipping Australia will fall into recession within 18 months and is warning the transport industry in particular to brace for more pain as interest rates continue to rise and operators are hit hard by increased fuel prices, a tight labour market, and ongoing congestion in the supply chain.
Business strategist Sandra Morrell says pretending a recession is not going to happen could spell disaster for transport operators who have managed to survive more than two years of pandemic-related challenges.
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“The example of Covid-19 showed us all that things can change instantly, but the pandemic also demonstrated that there is ongoing demand for trucks to stay on the road so goods can be moved,” said Ms Morrell.
“The current economic climate means online shopping is again increasingly attractive for consumers looking for discounts, putting renewed pressure on the transportation of goods. It’s important not to panic.”
Ms Morrell has owned trucks and has managed fleets of vehicles. Having her own HR licence, she has experienced firsthand many of the challenges facing the transport industry. She says operators should be planning and preparing over the next few months and has some tips to help: • Reduce costs now: Don’t wait until revenue falls, make cuts now, reduce bad debt and renegotiate loan term, servicing contracts and insurance premiums. Look at your fleet and ensures it matches demand and sell or trade unused or poor performing vehicles. Stock up on spare parts now so you don’t have to wait if there’s delays with availability or shipping. • Upskill your team: An employee is a multi-year investment so set aside time for them to train in new areas of your company so if you are forced to cut costs you can look at repurposing your team. Investing in training could also see them move to an area where you’re experiencing a worker shortage. Talk to your employees and see whether they can take on extra shifts or have a hybrid role - they might have skills that they aren’t using that could be helpful. • You can’t manage what you don’t measure: Establish a weekly habit of looking at key business metrics is essential – such as current
bookings, future bookings, expenses, cash on hand. • Prepare to pivot: Look at ways you can keep your trucks on the road, can you expand your services to other areas. Is it possible for other companies to hire the trucks or can you contract a truck/driver for a short-term contract. Any way you can diversify will be helpful in the long term. • Maintain your fleet: If you upgrade your vehicles every 3 years or so, now is the time to review that and find ways to maintain your current fleet. Look for competitive quotes and negotiate servicing contracts so you’re not relying on getting new vehicles. Install GPS tracking devices and review the trips/stops your employees are making – are they the most efficient? • Look after your own mental
health and your team members:
Build team morale, encourage social activities, physical movement and offer counselling services if needed to your employees. Research shows a happy employee has fewer sick days and is less inclined to quit. “There’s opportunity in every market
and it’s about looking to at what is the upside opportunity in the market that may be ahead,” said Ms Morrell.
Ms Morrell was a partner in a global resort and business education company Genius Group which employed 500 people and ran events in 7 countries when Covid-19 lockdowns commenced in early 2020.
“With restrictions imminent but for no idea how long, I took a good hard look at our cost structure and worked out what was sustainable and what was going to cost too much to deliver. Working through our P&L line by line, I cut 50% of all costs within a few days.”
“I also communicated to the team that if we were to get through this sudden storm, we all had to be willing to do whatever it took. Some took annual leave, others worked reduced hours, everyone in the team took a pay cut and some team members were repurposed – we had receptionists from resorts answering phones in customer service for our programs.”
“We also pivoted what was predominately an offline events business education company to an online EdTech and education company."
“As a business owner your primary concern will be how many of your customers will continue to use your services in an economic downturn and be prepared for services potentially increasing in different areas and how you can quickly adapt to maximise any opportunities.”
“You want to ensure you’re getting 80% of your revenue from 80% of your clients – not 80% of revenue coming from 20% of clients because this gives your business a better chance of remaining sustainable when everyone makes cuts.”
“This might mean changing some key elements, but you want to do everything you can to make sure profitability remains consistent in a recession.”
Ms Morrell says there are also things you can do as an employee to protect yourself as best as possible during a downturn.
“In the months leading up to a recession, risk-taking becomes almost non-existent and business owners go into survival mode, ruthlessly curtailing expenses and drastically reducing overheads and that could mean layoffs.”
“While this may seem counterintuitive given many in the transport sector are struggling to fill roles at the moment, there is pain ahead and the knee jerk reaction of many employers to quickly reduce a business bleeding cash is to cut staff.”
“It’s important to think outside the square and consider all your options when you’re looking for stability. What other skills do you have that offers value to your employer?”
Ms Morrell suggested workers do the following in the next few months: • Proactively discuss the market with your employer: Offer up pivot ideas and cost cutting solutions - be indispensable. • Be flexible and open to being repurposed: Find ways in which you can use your skills and experience to take on a different role within the company. • Update your CV/LinkedIn: If you are retrenched, offer to contract your skills back to your employer and other business owners. • Start saving a cash reserve now: Start by looking at your spending habits and all your outgoings including subscriptions - don’t live outside your means. Sell unused items around your house and pay off your credit cards/bad debt. Have enough cash to cover 6 months of living expenses. • Look after your own physical and mental health: Exercise, talk and spend time with friends and family. Staying in good physical and mental health can help you cope better during troubled times.
“It’s important to take note of where every dollar is being spent, knowledge is peace of mind,” said Ms Morrell.
“Now is the time to formulate a plan, it doesn’t have to be complicated or hard, you can start by simply making up a simple budget, refinance expensive debt and don’t spend more than you earn.”
“Recessions make everything uncertain but whether you are running a business or are an employee, it’s in your best interest to not panic, make a plan and look after yourself.”
Business strategist Sandra Morrell Recessions make everything uncertain but whether you are running a business or are an employee, it’s in your best interest to not panic, make a plan and look after yourself
WA
TRANSPORT
magazine
VOLUME 28 | NUMBER 7
Angry Chicken Publishing Pty Ltd
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Karen-Maree’ Kaye T: 0430 153 273 Email: karen@angrychicken.com.au
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Karen-Maree' Kaye, Russell McKinnon
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FROM THE PUBLISHER
Just when you think nothing else can go wrong and a new wave of COVID-19 gives business a lot to worry about with staff then the threat of Foot and Mouth on our doorstep. At the time of going to press with this edition, there was still uncertainty if the measures put in place by Governments were enough. David Fyfe, President of the LRTAWA talks about this subject on page 10.
Also in this edition is some handy reading, just in case on how transport operators can survive a recession plus, the new Owner Drivers legislation that has been introduced to WA Parliament, new CCTV camera installations at WA RTAA’s, an AdBlue update and a review from Western Roads Federation on the HD Driver Training Program.
Thank you for the feedback on the Mack Muster spread from last edition. Kevin Toovey from the HCVC did such a wonderful job with the photos and the trucks all looked outstanding. Well done everyone concerned.
Welcome to the many new subscribers of the digital edition and for your feedback and kindness as well. I try hard to ensure the content is relative and helpful to you all.
Best, Karen
CONTENTS
2..............................................How transport operators can survive a recession 6..............................................Owner-driver legislation introduced to Parliament
7...............................................CCTV camera installation at WA RTAA’s 10...........................................LRTAWA – The impact of Foot and Mouth disease will spread far and wide 11..............................................On Road Enforcement of Automated Vehicles - Information Session 12 ...........................................Main Roads – Reducing heavy vehicle rollovers
13 ...........................................AdBlue Update 14...........................................Western Roads Federation – HD Driver Training Review
15 ...........................................Driver Award wages to increase 4.6% 16...........................................DHL Supply Chain Australia agrees to acquire the Glen Cameron Group 17............................................A look at the future of electric vehicles in Australia 18...........................................Binduli North gold project in Kalgoorlie opens 19...........................................Transport company leverages new Australian sanitisation solution
20.........................................New Chair of the Road Safety Council 21 ...........................................Pinjarra Heavy Haulage Deviation to improve safety
Every Month
8..............................................Fair Go for Owner Drivers 22.........................................HCVC 24.........................................WA Transport History Endorsed by
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