A faster than expected push to online retail due to distancing measures and a renewed focus on local manufacturing and production will occasion growth opportunities according to a new report released by Isuzu Australia Limited (IAL).
The recent release of the Isuzu Future of Trucking Report, the first by the leading commercial vehicle manufacturer, outlines the case for continued growth in last mile demand which was providing significant opportunities for fleets of all sizes despite recent unprecedented challenges.
The large, more diverse fleets, however, remained best placed to deliver the bulk of the linehaul business across broad geographic areas.
Reflecting their more complex operating environments, larger fleets are also most likely to recognise the pace of change currently facing the industry – pre and post-COVID said the report.
Nearly half of larger operators (46 per cent) had shown they have clear and comprehensive strategies in place to address evolving industry changes.
The decision by IAL to conduct the largest ever road transport survey in Australian history, was to acknowledge what it calls the rapid pace of change besetting the broader transport sector at present.
The report presents the findings of more than 1,000 road transport survey respondents bringing together a broad mix of industry and vocational voices.
Insights were pulled from both the distribution and freight, logistics perspectives which totalled 60 per cent of all respondents.
The remaining 40 per cent of respondents hail from a range of other service provision industries, including government as well as primary
production industries such as agriculture and mining.
The confidence that large fleets have in their strategy for the future suggests a strong understanding of the markets in which they operate, greatly assisting their response to the ongoing COVID operating environment.
Underpinning this is the effective use of data to inform business operation, with large fleets clearly differentiated in their ability to capture and utilise data.
Large fleets are more likely to have recognised the value of effective data capture, investing in fleet management technologies that can help
them address fleet utilisation. This existing investment in new technologies is a key input to helping them sustain and increase business productivity in
today’s increasingly challenging environment.
Of those that participated in the survey 58 per cent operate in Australia’s metropolitan areas, typically with sub-100 kilometre, back to base ranges.
Another 14 per cent fell into the long haul category, representing a far greater route range and interstate movements.
The research sought to uncover key insights into the issues and trends likely to impact the industry in the coming years.
Survey work informing this report was conducted towards the conclusion of 2019, with subsequent, followup survey work conducted in mid-2020, following the onset of the COVID-19 global pandemic.
IAL acknowledged that the report’s authors have taken into account the ramifications of such unprecedented circumstances on the economy this year. The finalisation of the report ultimately factored in these considerations.
“Any survey marks a point in time, and our Isuzu Future of Trucking Report is no different,” IAL remarked of the report.
“The project was commenced in late 2019 and the bulk of the findings represent the sentiment of industry participants before the onset of COVID-19.
“We’ve since revisited the market to gain an understanding of how the changed social and economic landscape has affected their attitudes and opinions.
The current and ongoing impact of COVID-19 is a significant challenge for the world. That said, the findings in this report are important, as they combine underlying industry changes with the current COVID operating environment.”
Although broad reaching in its scope, the report’s findings can be separated into five key areas of interest: The Freight Task & Business Recovery; Changing Customer Preferences; Total Cost Of Ownership; Technology and Innovation; and Chain of Responsibility.
The results in terms of Business Recovery were predominantly positive across multiple segments and vocations according to IAL.
The effects of COVID insofar as they had gravely impacted some industries, did not dampen spirits for most operators who were seeing strong demand for their services into the future. Similarly, government forecasts predicting growth in the road freight task to 2030 gave further rise to this confidence.
Australian truck fleets expect freight volumes to increase significantly by 8.2 per cent in the next two years.
Key among Changing Customer Preferences was the trending demand for immediacy and availability of turnkey, fit-for-purpose products with broad driver appeal.
Within the labour market, the persistent challenge of driver and skills shortages continues to concern operators.
The findings demonstrate, however, that beyond just awareness, employers are and have been active in their efforts to review driver recruitment.
In terms of Total Operating Costs, the ongoing cost of operating and maintaining an ageing Australian truck also remained a concern for respondents.
Meanwhile, the pace of technological change dictates two key areas of focus for Australian trucking operations with the role of technology as it relates to driver safety of major interest and also the introduction and uptake of alternate drivetrain technology such as hybrid and electric options.
The report considers both functions of road transport technology are critical markers in the future operational nature of Australian road transport.
Findings for Chain of Responsibility legislation awareness were less encouraging the report noted especially in regard to operators of small to medium fleets.
Larger fleets, at the other end of the scale, displayed an acute awareness and a practical application of management strategies to meet their obligations.
“Isuzu Trucks has enjoyed an exceptional period of success over the last three decades, and whilst extremely proud of this achievement, it is concurrently
viewed as a genuine privilege,” IAL said in a statement.
“The Australian transport sector is an extremely strong, inventive and resilient entity. Whilst acknowledging Isuzu is indeed a ‘cog in the machine,’ it takes its role seriously as the truck market leader. More than that, the company believes it has an obligation to commit its own time and resources to the betterment of the collective.”
Growth projections in the road transport sector were varied significantly by industry type in the wake of government and media response to COVID-19.
Some key takeaways from the report include:
– Half of truck fleets saw no impact or increased business. This rises to two thirds for those fleets working in distribution
– One in three saw 30 per cent plus decline in operating revenues, making them eligible for JobKeeper
– Construction saw declines in growth projections, but was largely insulated, with most respondents reporting they were likely to have a decline of less than 30 per cent
– Retail & Hospitality was the hardest hit sector, with almost three in four down by more than 30 per cent on revenue projections