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Prime Mover Magazine


Examining Australia’s smash repair industry

Examining Australia’s smash repair industry

Although valued at $5.3 billion* annually, Australia’s heavy vehicle smash repair industry has traditionally not been one for the limelight. But with the insurance sector actively pushing for more transparency, that could now change.

Despite a broad commitment to creating a zero-incident transport industry, the rare worst-case scenario of an accident is one transport businesses need to handle head-on to remain competitive – especially in an age where traffic and freight volume growth are in constant overdrive.

Only by building a solid relationship with the insurance industry and putting the right processes in place will an accident not cause any harm to people, businesses and the supply chain at large, explains Brendan Richards, head of Ferrier Hodgson’s Logistics practice. “Every business should have a risk management framework in place to identify and mitigate business risks. In transport more than most industries, the potential ramifications from operational risks such as an accident are enormous.”

According to the Melbourne-based business expert, the industry has been especially proactive in the field since the much-publicised Mona Vale incident in spring 2013, but mustn’t fall behind in keeping business processes up-to-date. “Certainly the industry is aware of the importance of risk management – which is why there has been so much progress made in safety, training and vehicle quality, and why legislation such as Chain of Responsibility (CoR, ed.) has been implemented. However, accidents can happen notwithstanding robust avoidance measures – and knowing how to respond is critical.”

Craig Carmody, National Development Manager, Transport, at National Transport Insurance (NTI), agrees. In fact, he says the insurance industry itself has played a pivotal role in professionalising the industry’s approach to risk management over the past decade or so. “The accident repair industry has traditionally been a forgotten part of the supply chain, so the insurance community has worked with industry  to bring a better structure and more transparency to it,” he says. “Australia’s trucking industry is becoming more and more professional and is recognised globally, so we need the right processes in place to deal with every scenario in a professional way, even if it’s ugly.”

He explains that NTI has been spearheading a push for professionalism over the past 20 years – not only by helping individual transport businesses develop a dedicated Transport Emergency Response Plan (TERP), but also by holding tow operators and repairers accountable. “Knowing that a modern truck is a complex machine and is part of an even more complicated supply chain, we have built up a network of accredited tow operators and Premium Repairers that meet the highest standards in the industry,” he explains – adding that establishing and enforcing these standards has led to a fundamental cultural shift in the Australian repair industry.

“I can only speak for NTI – and encourage the transport industry to opt for an insurance company that is equally committed – but there is now a distinct focus on uptime and doing the job right. We want our customers to get back on the road with a perfectly repaired vehicle, as quickly as possible, which is why our whole methodology has changed over time,” he says – pointing out that only ten years ago, one in every four trucks had to go back to the workshop after a repair for rework.

“Today, we have strong relationships with the repair industry. We often liaise with the manufacturer, and we begin organising the parts sourcing ourselves while the truck is still being towed. We know our transport business customers, we know their trucks, and we know our repair partners – nothing is left to chance anymore. That’s why today, only five per cent of trucks are returning to the workshops after they’ve been repaired.”

One workshop that has been working closely with NTI to bring a new level of professionalism to the industry is Sydney-based Royan Group. “Smart businesses are prepared for every eventuality, and part of that approach must be building a professional incident support network, including a proactive insurance company and trusted repair specialist,” says Group General Manager, Steve O’Reilly. “There are professional processes for everything these days, and dealing with a crash shouldn’t be any different – if you have a plan in place, every crisis can be managed.

“At Royans, for example, we are very close to the insurance industry, especially NTI. These relationships, as well as our experience and internal processes, enable us to speed up the quote, assessment and repair authority stages, so we can get to work ASAP, and the process is quick and hassle-free for the fleet. After all, every day a customer’s claim is sitting on a desk un-actioned is a day’s valuable downtime wasted.”

According to Darren Wales, Managing Director of fellow Sydney business and NTI affiliate, Wales Truck Repairs, processing the repair is only the beginning, though – actually getting to work and understanding today’s increasingly complex transport equipment is where the real challenge lies. “It is no longer sufficient to check that the chassis isn’t twisted, the body panels are straight and the paint matches the original colour. The high-tech nature of a modern commercial vehicle requires a detailed examination of all components that may have been affected by a collision and the consequential damage they may have suffered,” he says – pointing out that transport businesses still expect a damaged truck to be returned as soon as possible and in a condition that is as good, if not better than, before the accident.

Darren and Steve agree that late model trucks require high-tech tooling and equipment, which has prompted repairers such as Wales and Royans to invest in state-of-the art measuring, straightening, welding and painting equipment. Especially the ever more complex electronic substructure of a truck can be sensitive and will often need special attention by a trained product expert.

“New technology like laser-measuring and computerised crack testing is now part of the tool kit required to assess the full extent of the damage and then assist in the rectification back to the required standard,” Darren explains – adding that to achieve such a high level of service in a short timeframe, many a truck smash repair shop is now run like modern automotive businesses, with flat hierarchies, quick decisions and flexible processes. “The insurance industry is appreciating that development, too, and helping us set the benchmark as high as possible.”

A much-talked about example for that development is the South Central Trucks site in Adelaide, which opened for business in late 2015. Part of the burgeoning CMV Group and dedicated to servicing the Volvo, UD and Mack trifecta, the 39-bay facility is considered one of the most advanced workshops in Australia.

With enough space to simultaneously service four fully loaded B-doubles over suspended service pits, the $28 million site was designed with maximum turnaround time in mind. As such, it is equipped with a high-tech oil distribution system to facilitate a fast and safe transfer of lubricants, while compressed air is delivered via overhead reels that keep the hoses suspended and out of harm’s way. All processes including parts ordering are fully digitised to ensure downtime is reduced to a minimum and even complex repairs can be carried out quickly.

“In line with new regulations coming into effect – especially in the Chain of Responsibility field – the transport sector is maturing rapidly, and with it the repair and maintenance industry,” says Darren Wales, adding that the growing average age of Australia’s heavy vehicle fleet may well demand even more technical scrutiny down the track. “We are all part of the same system and need to be aware of the big picture. Every repair is part of a much more complex process that will ultimately contribute to the success of the Australian economy and road safety at large.”

From choosing the right insurance company and workshop through to training drivers how to react correctly in the worst case scenario, Brendan Richards says dealing with an accident must begin long before it ever comes to it. “I’d like to think that most businesses have a critical response plan for accidents and there is no excuse for not having one. Put simply, having a strong preventative regime complemented with an appropriate accident response process is the best way to stay out of jail and to avoid financial penalties.”

*Source: IBISWorld

The story has appeared in the October edition of Prime Mover. To get your copy, click here.

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