Western Roads Federation: If trucking can’t lead now it never will

Over to you WESTERN ROADS FEDERATION by Cam Dumesny, CEO

IF TRUCKING CAN'T LEAD NOW – IT NEVER WILL

My Queensland counterpart once said to me, that the Transport Industry needs to win the big argument that we are critical to the economy before we can start getting the wins our industry needs.

Well, if we can’t win that argument ‘now’ in the current environment, then we need to take a look at ourselves…

And here is why

Across Australia and around the world, freight and supply chains are becoming topical mainstream issues as disruptions in all modes (sea, air, rail and road) are leading to inevitable shortages, delays and price rises.

Unfortunately, whilst topical the media reports as you can see below all focus on specific industry sectors.

Only one sector is across all of them and that is our transport sector.

So, it is our job is to bring all these together to show that there is one common problem – transport.

And that we need to be front and centre of developing the solutions.

Risk to Grain Harvest

Western Australia is on track apparently for a bumper harvest, some estimates claim it to could be a record 18 million tonne. That’s fantastic for our regions and our industry that supports them. With WA growing nearly half of Australia’s wheat crop but exporting 95% of it that means $ for Australia.

But there’s a problem, reports are that farmers cannot get new or even some spare parts for harvesting equipment but in addition there simply may not be enough truck or even train drivers to transport it. (Further background sees CBH media reports from May 21)

Loss Export Sales

Australia has recorded a trade account surplus thanks to booming Iron Ore prices. Problem is that to capitalise on the great price (around $300 a tonne Australian) you not only need to dig it up, you have to transport it to the Ports.

And that’s where the problem starts for those miners who rely on road haulage; there are simply not enough truck drivers. As MRL reported, they missed nearly $120 million in export sales because they did not have enough truck drivers and equipment. (AFR 16 Apr 21)

And if you could get them, we now have 12 month waiting lists for new trucks and locally built trailers.

Food Prices

Numerous media articles have commented on how a shortage of farm workers will drive up prices, in fact, ABARE back in March said Fruit and Veg prices would spike by up to 29 per cent with labour shortages.

Yes, Australia has a shortage of farm workers to pick the food ‘but’ it also has supply chain disruptions in road, rail, sea and air to collect and distribute it.

What then for our food security and prices? What has happened in other places where that is happening may serve as a useful guide…

In the USA “Stockpiling by food retailers is driving shortages of some staples, grocery industry executives said, and is challenging a U.S. food supply chain already squeezed by transportation costs, labor pressure and ingredient constraints.” (WSJ 6 July 21)

But in UK the situation is even worse, where the London Economic reported potential food shortages this summer:

Premier Foods, one of Britain’s biggest food companies, called on the government to consider using the army to distribute goods to help relieve a severe shortage of truck drivers.

In July, industry leaders warned Britain could face gaps on supermarket shelves this summer and an “unimaginable” collapse of supply chains after the pandemic and Brexit led to a shortage of more than 100,000 heavy goods vehicle (HGV) drivers.” (London Economic 5 July 21).

Infrastructure Projects and Road Maintenance

It’s strongly rumoured that there will be an effort to slow down public investment in road and infrastructure projects as they are facing cost blow outs due to a shortage of skilled labour, including truck drivers and mechanics.

Such investment is critical for all modes in our supply chains, not the least of which are roads where desperately needed repairs and maintenance are needed to make them safer and more productive.

Furthermore, although not yet reported in WA, Victoria has reported that in a boom, builders are going bust due to construction material shortages. Shortages that have blown out the time to build a house by 300%. (Source: The Age 18 Jun 21)

Manufacturing

COVID has had one upside in that it has brought back a sharp focus on the fact we as a country need to start making stuff again.

Problem is manufacturers need good supply chains. Because they bring stuff in, add their manufacturing value and then move it along to another manufacturer or the end customer.

But the problem is we don’t have good supply chains.

Just one example is that heavy engineering in the AMC area (I have previously discussed in other articles) this remains under threat as neglect of our OSOM corridors is increasingly inhibiting the cost-effective movement

of manufactured equipment to WA mine and project sites. The alternative of manufacturing overseas and direct shipping to regional ports remains an undesirable but viable option.

Sadly, this week my other half had to give up and licence her manufacturing to European competitor as she could no longer cost-effectively manufacture and supply from WA due to skyrocketing freight costs. Even though she is a small export manufacturer - that will mean a loss of skilled jobs in WA. And she won’t be the only one.

While we are at it, spare a thought for all those sectors trying to develop new markets for their products after they effectively lost Chinese market access. It must be a nightmare to find ways of getting their stuff to those markets.

So What Does that Really Mean For Us?

Bluntly it means don’t waste a good crisis.

This is our opportunity to bring Government, Business and Community attention to our value.

So that we can gain their support too: • Acknowledge that we not just Essential but Critical to the Australian Economy and Community; • Drive through the Safety Initiatives we Need; • Remove the Productivity Barriers and Non- Productive charges including at Ports; • Enable us to gain access skilled labour pools; and • Invest in the road-side amenities and other basics that our people need and deserve.

To do that we need bring the issue to the forefront of Government, Business and Community minds by bringing the whole economy impact to the headlines.

Then to bring forward the solutions, as we are the professionals.

Our industry must lead. Australia has a problem, we have the solutions - it is our time to shine.

It starts on 16 Sep 21, when we are bringing leaders of every sector and supply chain mode to the WA Freight and Logistics Conference, to highlight the problems and to put forward the solutions.

Footnote:

Move from Just in Time to Just in Case

Warehousing is back, as companies move from “Just in Time to Just in Case”.

In the US for example it is so bad that the average wait time for materials is now 85 days, the longest time since records began 40 years ago.

In Australia, companies are now beginning to build up stocks as they don’t trust supply chains. As Aaron Morey, Chief Economist for CCIWA said to me, according to the latest National Accounts -Australian Companies are now holding the largest inventory in nearly two decades.

Furthermore, the rapid growth in online retail is “Driving the highest level of industrial and logistics development seen on the east coast of Australia since the 2007 and 2008 building boom.“ (Source: AFR 7 July 21)

Well it means growth in warehousing means a need for more industrial land, warehouse workers and equipment.

It also means that our members who provide both transport and logistics will see growth opportunities.

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