Focus
HOW TRANSPORT OPERATORS CAN SURVIVE A RECESSION
A
leading business expert is tipping Australia will fall into recession within 18 months and is warning the transport industry in particular to brace for more pain as interest rates continue to rise and operators are hit hard by increased fuel prices, a tight labour market, and ongoing congestion in the supply chain. Business strategist Sandra Morrell says pretending a recession is not going to happen could spell disaster for transport operators who have managed to survive more than two years of pandemic-related challenges. “The example of Covid-19 showed us all that things can change instantly, but the pandemic also demonstrated that there is ongoing demand for trucks to stay on the road so goods can be moved,” said Ms Morrell. “The current economic climate means online shopping is again increasingly attractive for consumers looking for discounts, putting renewed pressure on the transportation of goods. It’s important not to panic.” Ms Morrell has owned trucks and has managed fleets of vehicles. Having her own HR licence, she has experienced firsthand many of the challenges facing the transport industry. She says operators should be
2
WATM • August 2022
planning and preparing over the next few months and has some tips to help: • Reduce costs now: Don’t wait until revenue falls, make cuts now, reduce bad debt and renegotiate loan term, servicing contracts and insurance premiums. Look at your fleet and ensures it matches demand and sell or trade unused or poor performing vehicles. Stock up on spare parts now so you don’t have to wait if there’s delays with availability or shipping. • Upskill your team: An employee is a multi-year investment so set aside time for them to train in new areas of your company so if you are forced to cut costs you can look at repurposing your team. Investing in training could also see them move to an area where you’re experiencing a worker shortage. Talk to your employees and see whether they can take on extra shifts or have a hybrid role - they might have skills that they aren’t using that could be helpful. • You can’t manage what you don’t measure: Establish a weekly habit of looking at key business metrics is essential – such as current
bookings, future bookings, expenses, cash on hand. • Prepare to pivot: Look at ways you can keep your trucks on the road, can you expand your services to other areas. Is it possible for other companies to hire the trucks or can you contract a truck/driver for a short-term contract. Any way you can diversify will be helpful in the long term. • Maintain your fleet: If you upgrade your vehicles every 3 years or so, now is the time to review that and find ways to maintain your current fleet. Look for competitive quotes and negotiate servicing contracts so you’re not relying on getting new vehicles. Install GPS tracking devices and review the trips/stops your employees are making – are they the most efficient? • Look after your own mental health and your team members: Build team morale, encourage social activities, physical movement and offer counselling services if needed to your employees. Research shows a happy employee has fewer sick days and is less inclined to quit. “There’s opportunity in every market
