As Australia tackles the next FY 22/23
financial year, many industries are seeing changes appear as a result of a changing national economic landscape. The transport industry, which has experienced periods of overwhelming instability since COVID-19, is expected to see vast changes over the coming year. Among other impacts on the industry, the rising cost of fuel prices and a skills shortage is negatively impacting the sector as a whole. Industry discourse has turned to concerns over when industry pressure should alleviate and what can be expected from the rest of the year.
Transport industry predictions for 2022-23
Ongoing worker shortage
Transport is not the only sector struggling to source skilled workers, however it is considered one of the hardest hit industries. COVID-19 created an operations nightmare for logistics and transport businesses, as navigating ever-changing restrictions and guidelines resulted in loss of business, staff and revenue. It also meant almost no supply of new or skilled workers, as international border closures cut the industry off from accessing international applicants.
The Australian transport sector has been extremely slow to heal, as two years of continual disruptions to businesses has left employers floundering to find available staff who are eager for employment in the industry. As of August 2022, there are over 22,000 results for ‘truck driver’ jobs on Seek, which accounts for roughly 9% of the total number of jobs advertised on the site.
While the Australian Federal Government has announced plans in March to cut 50% in fuel excise for 6 months to aid the expenses faced by transport businesses, this reduction is due to conclude next month in September. This has led to an increase in calls to action for the Australian government to provide further incentives to the industry to assist with the rising costs of business operations.
Amid business calls for help, the New South Wales Parliamentary committee lodged a report recommending the instant reduction in toll fees for road freight operators. This toll relief would administer an immediate solution to operators who are struggling under the weight of government surcharges that accompany long haul transport.
Other potential incentives have been proposed to the Albanese government, like that of the restoration of the fuel tax credits (FTC) scheme proposed in a joint statement by Australian Road Transport Industrial Organisation (ARTIO), National Road Freighters Association (NRFA), Transport Workers Union (TWU) and National Road Transport Association (NatRoad). This initiative could assist with businesses, especially small and single operators, and reduce the number of operations crumbling under the pressure of high incidental expenses.
As Australia moves towards automation and digital products, the transport sector is quickly catching up on the ways technologically-driven business practices can improve the industry. For operators looking to get ahead of the inevitable switch to electric and battery operated trucks, there are a suite of new assets hitting the market in coming years to satiate demand. Manufacturers like recently announced its collection of electric vehicles. ZF’s CEO, Wolf-Henning Scheider announced that he was ready to meet the demand of transport technology. ZF Board Member, Wilheim Rehm, pointed out the movement towards transport technology is a large and snowballing trend in the industry,
‘The trend towards automated, connected and electrified vehicles represents a huge commitment in development costs for OEMs. With our wide range of integrated solutions, ZF offers customers the opportunity to be at the forefront of technology, while reducing their development efforts.’
Stabilised used sales
The transport industry has turned towards used assets over the last two years as the only means of accessing trucks while COVID-19 delayed international production and delivery. These delays are ongoing as international producers struggle to catch up on the backlogue of ordered vehicles.
As Australia’s leading asset remarketer, Pickles was the biggest perviewer of the increased demand for used trucks and trailers. As it became clear to operators that Australian-located items were the only accessible option for the immediate future, used sales greatly inflated by attendance and the budgets operators allocated to items. While international production is kicking back into gear, the labour and material shortage is hindering the full scale return to pre-COVID operations for most businesses. So while an industry plateau is inevitable once the market welcomes the delivery of new assets, this stabilisation is unlikely to arrive for at least another 12-18 months.
As the industry appears to experience a continued period of prolonged instability, operators have come to rely on industry experts like Pickles for guidance. While trends can help inform businesses on potential windows of sales success, there is no comparison to the assistance that can be provided by Pickles in-house team of industry specialists. For more information on how to access sales guidance from Pickles specialists, contact us today.