The release last December of the Isuzu Future of Trucking Report, the first by the leading commercial vehicle manufacturer, helped to outline the case for continued growth in last mile demand which was providing significant opportunities for fleets of all sizes despite recent unprecedented challenges.
The report, conducted by independent research firm ACA Research, presents the findings of more than 1,000 road transport survey respondents bringing together a broad mix of industry and vocational voices.
With insights pulled from both the distribution and freight, logistics perspectives, accounting for in total 60 per cent of all respondents, the remaining 40 per cent of respondents hailed from a range of other service provision industries, including government as well as primary production industries such as agriculture and mining.
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.
Nearly half of larger operators (46 per cent) had shown they have clear and comprehensive strategies in place to address evolving industry changes. 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 according to the report.
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, under the specter of what amount to more routine considerations for them, 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.
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. The authors of the report had since saw it pertinent to revisit the market to gain an understanding of how the changed social and economic landscape had affected attitudes and opinions of those who participated in it,” the company said.
“The current and ongoing impact of COVID-19 is a significant challenge for the world,” declared the ACA authors.
“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, with the effects of COVID, insofar as they had gravely impacted some industries, not altogether dampening 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.
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.
Australian truck fleets, it was revealed, 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. Of the businsses using data to manage fleets more effectively 61 per cent had, at their disposal, upwards of 20 commercial vehicles. Of the 20 per cent who affirmed they were in the process or planning to invest in fleet management technologies, those businesses operating fleets over more than 20 trucks represented half of the sample (50 per cent).
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. Growth projections in the road transport sector were varied significantly by industry type in the wake of government and media response to COVID-19.
IAL Director and Chief Operating Officer, Andrew Harbison, acknowledges the Future of Trucking report was an opportunity for Isuzu Trucks to contribute to bettering the shared knowledge of the industry.
“The Future of Trucking report was undertaken with some broad objectives in mind. Importantly, it has been a chance for Isuzu Trucks to further enhance and develop our own understanding of the industry we are operating in, but to also benefit every stakeholder in Australian road transport,” he says. “It’s been a challenging time for the nation and every industry sector has endured trials as a result of COVID-19. It remains the hope of IAL that some of the insights gathered as a part of this project can be utilised by industry participants in their daily operations.”
While it was no secret the commercial road transport sector was going through a period of change, despite this transitional period Harbison was buoyed to see that the fleets surveyed were confident about the future of the industry and anticipated continued demand for their services in the years ahead.
“With or without a global pandemic, the freight task continues to grow and now is the time to build on foundations, to reaffirm industry relationships and ensure an efficient supply chain as we work collaboratively through this next phase,” Harbison says.
In a statement IAL recognised it had enjoyed an exceptional period of success over the last three decades, and insomuch as it was extremely proud of this achievement, it was concurrently viewed as a genuine privilege. Noting that the Australian transport sector was an extremely strong, inventive and resilient entity and that Isuzu took its role seriously as the truck market leader.
“More than that, the company believes it has,” IAL notes, “an obligation to commit its own time and resources to the betterment of the collective.”