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Prime Mover Magazine


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Peter Anderson

Don’t let spiralling congestion ruin your operation

August 2018

"In this world nothing can be said to be certain, except death and taxes.”

So wrote former US president Benjamin Franklin in 1789 in a letter to French physicist Jean-Baptist-Leroy, borrowing the expression from author Christopher Bullock, who coined a variation of the phrase in his book The Cobbler of Preston to highlight the difficulty in avoiding the burden of taxes.
One can easily imagine that if such an analogy were made by Franklin and Bullock today, they might use the word congestion to describe the inevitability of tax.
Because if there is any certainty in life, it’s that congestion is rampant in and around Melbourne and other capital cities – it’s costing freight operators and the economy millions, and it’s probably here to stay.
For operators, congestion has required a total re-think of how they address efficiently meeting the freight task because of the enormous disruption to vehicle scheduling it has created.
The days of schedulers accurately forecasting travel times are long gone due to more vehicles on the roads, delays from concurrent construction and infrastructure projects, and changes to work patterns that has thrown the traditional nine-to-five work day out the window, along with the certainty of morning and evening ‘peak traffic’.

Now, peak traffic is the norm rather than the exception, and with our population growing at unprecedented rates, this is unlikely to change.
Longer travel times caused by congestion translates to much higher operating costs and productivity losses for freight operators. This is evident in the higher cost-per-kilometre operators are experiencing across their fleets, as well as reduced capacity to earn revenue from vehicles idling in traffic instead of moving and delivering freight.

It’s worth understanding the factors that are feeding rampant congestion increases to establish steps operators can take to ensure their businesses aren’t overwhelmed by associated cost increases.
In Victoria, the volume of repair and development happening on the road network has never been greater with concurrent works on the M1 and M80, and new projects like the West Gate Tunnel, Metro Tunnel and level crossing removals taking shape. Fifty-one major road projects within metropolitan Melbourne are dramatically impacting travel times.

Further compounding the congestion increased from these projects is that more drivers are using the roads. Approximately 440 new drivers are licensed every week in Victoria, and with 2800 people moving here every week, pressure on the network has nowhere to go, but up.
Inevitably average speeds are declining because of a higher concentration of vehicles, which impacts travel times. Since 2013, average speeds have declined by 33 per cent to just 27 km/h, exacerbated even further by VicRoads and, many councils, reducing the speed limit to 40 or even 30 km/h.

Passenger and heavy vehicle drivers frustrated at being stuck in traffic are looking for alternate routes to avoid construction, which can amplify the problem by clogging smaller roads that were never intended as arterials.
For operators, there are significant ramifications from increased congestion, with fatigue management and how to recover higher travel costs to service customers being notable pressure points.
Operators of vehicles greater than 12 tonne gross vehicle mass (GVM) have a responsibility to manage the time their drivers spend behind the wheel so that it meets legal requirement. At the same time, customer expectations need to be met, which can be difficult to achieve in the face of unscheduled delays and supply chain pressures this can cause.

Stop-start driving caused by congestion is diminishing heavy vehicle efficiency, and is pushing up labour costs thanks to longer travel times. Revenue per kilometre inevitably declines from this because of less capacity to service other business and missing time slots.
Left unchecked, there is a real risk congestion will cripple operators that do not take steps to factor its consequences into their pricing.

We urge all operators to review their pricing models, especially for metropolitan work where disruption is everywhere, and to ensure the financial impact of congestion is as accurately as possible enshrined in new and existing  contracts.
The VTA is actively educating consumers through its advocacy work to expect to pay more for goods because of higher supply chain costs. We urge operators to have similar conversations with their customers so that they understand why higher costs are an unwelcome but necessary impact of congestion.

Peter Anderson
CEO
Victorian Transport Association

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