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Prime Mover Magazine


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Peter Anderson

Industry rife with high volumes and low margins highlights productivity imperative

July 2017

It was somewhat fitting, if not unwelcome, that operators attending the Victorian Transport Association (VTA) State Conference in Lorne in early June returned home to news that stevedore Patrick would be increasing infrastructure surcharges at its terminals by almost 1,000 per cent.

They had just spent two days hearing from Australia’s foremost transport experts about how to maintain and improve productivity gains in an industry whose history is rife with high volumes and low margins.

Patrick’s news, coming only a few months after DP World announced similar increases to its surcharges, and higher road user charges around the Port of Melbourne reinforce that low margins are here to stay, and that operators must continually find ways to make their businesses more productive to remain viable and competitive.

As I explained at the Conference, productivity improvement should be the main objective of every transport operator, regardless of the size of their fleet or the number of people they employ.

Operators are in business to be profitable and successful, and that can only be accomplished by finding new ways to reduce costs, eliminate inefficiencies, and improve productivity measures. These are noble aims, and attaining them is good for everyone because they can employ more people, and put more money back into the economy.

But there is no doubt it is a challenging time for freight operators.

Movements are generally down thanks to a stagnant economy, and operator margins that are already stretched thin are being further squeezed by higher input and variable costs.

We are also operating in an increasing regulatory environment and having to adapt our businesses to satisfy and comply with additional regulatory oversight. This is not a criticism, but a reflection of the additional costs and pressures facing operators.

These factors highlight the need for operators to extract greater productivity from their systems, their equipment, their people, their customers and their suppliers to remain viable and successful.

Notwithstanding these challenges, there are a lot of exciting things happening in our industry across technology and innovation, safety and training and human resources, and infrastructure.

State Conference delegates heard from some great speakers about how they could harness the benefits of these drivers of productivity to make their businesses more successful.For example, Worksafe’s Ian Matthews’ presentation ‘Safety IS Productivity’ neatly summed up that operators who strive for a safety culture within their workplace are more likely to experience lower costs and reduced exposure to lost time claims because their people are healthy, safe and working.

Victoria International Container Terminal’s (VICT) Tony Desira and Leon Peetoom demonstrated how landside technological innovations at our ports could create operator productivity improvements through reduced idle time and more efficient loading and unloading of boxes.

Many speakers and panellists emphasised that operators have access to a rich amount of untapped data, and that there is a great opportunity to improve fleet efficiencies and better understand customer needs by analysing this information and applying it within the business environment.

There was a strong focus on infrastructure, with updates from key speakers including Federal Transport Minister Darren Chester and the Australian Rail Track Corporation’s (ARTC) Simon Thomas about key road and rail projects being invested in to create more efficient transport networks, and ultimately help improve the bottom line for freight operators.

From a VTA perspective, we are making considerable traction on priority infrastructure projects.

Last year, I lamented the absence of funding in the Victorian budget for the North-East Link. Twelve months on, we have a North-East Link Authority established and are putting together the corridor study for the connection.

It is a vital link that will ease pressures on the Monash Freeway and the West Gate Bridge, and provide a genuine freight connection between the north and south-east of Melbourne.

As planning continues, the Victorian Opposition and the Commonwealth will more fully outline their position on the North-East Link, which we will watch with interest.

2017 Australian Freight Industry Awards

Planning is well under way for the Australian Freight Industry Awards, being presented on Saturday, 2 September at Melbourne’s Crown Palladium. The VTA encourages entries from all parts of the industry across numerous categories. To nominate for an award, contact the VTA on 03 9646 8590 for an entry form.

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