By Adrian Misiano, Matthews Steer Head of Transport Advisory.
‘What’s in Front for the Transport Industry’ was the theme for the 2021 Victorian Transport Association State Conference, with an impressive line-up of speakers representing industry, regulators, government, sharing their insights into - and proposed solutions to - the issues and challenges facing the transport industry in our post-COVID world.
In his opening address, Assistant Minister for Road Safety and Freight Transport, Scott Buchholz MP acknowledged the great pressures the pandemic had placed on the transport industry, and highlighted the business-friendly taxation measures introduced by the Federal Government to help businesses bounce back from COVID-19.
“The supercharged Instant Asset Write Off, Temporary Full Expensing and Loss Carry Back Offset (are) business friendly, (and) they are investment friendly and job friendly,” Buchholz told the 180 assembled delegates. “It's not just about getting business back to what they do best, moving goods and services, supporting our country and creating jobs – but also investing in a safer, higher tech fleet,” he said.
The Hon. Ben Carroll, member for Niddrie, who invited the VTA and stakeholders to join him in a new heavy vehicle consultative committee, and pledged $2.8 million to fund structural assessments to expand the network to over-size over-mass vehicles.
"It is about getting your voice to the table at the ministerial level to cut through and make important change," said Carroll. "I want it to be a genuine partnership between industry, government and community that harnesses the expertise you have so we can begin that task and move more with less while we have a more congested road network. I am confident that together we can unleash a new round of productivity."
Covering topics as diverse as the gig economy, alternative fuels, human capital, and employee wellbeing, the conference highlighted a number of questions transport and freight business owners should be asking themselves right now:
Do you have a strategy in place for your transport business?
Are you aware of transport trends and the direction the industry is heading?
Do you have a documented innovation plan?
Have you protected your assets?
Is your business investor ready?
Freight on demand
Labour senator and former Transport Workers Union national secretary, Tony Sheldon, addressed the looming shadow of the gig economy on the transport and freight industry. With businesses in a vast array of sectors from food delivery, to retail, to IT, and ride sharing already redesigning their operational models to minimise cost and maximise profit, a similar approach to transport and logistics may not be far behind.
Sheldon examined the prospect of the rise of the app-based transportation model – effectively freight share – as a means of providing in-demand, affordable services within the consumer driven landscape, and highlighted the potential pitfalls of an on-demand transport operation in terms of job security, regulation, safety, and workplace rights.
COVID has proven people favour online shopping and home delivery and, long before the pandemic, the taxi industry bore the full brunt of the gig economy with the genesis of Uber and ride sharing. It’s critical that transport and logistics business owners are aware of potential changes in their industry, understand that disruption could happen to their business, and have an innovation plan in place that enables them to proactively evolve their operational model and get on the front foot.
Succeeding at Succession
In the wake of COVID, and with the average age of transport business owners rising, one of the topics that came up frequently during the networking component of the VTA State Conference was succession.
I often compare building a business to building a house. I ask my clients: “would you build a house without a plan”? They of course answer: “no,” which begs the question: “why would you build a business without a plan”?
My questions to transport business owners and logistics business owners is: “have you really looked at your business, and how are you ensuring you remain relevant and attractive to future buyers”? If your transport business hasn’t moved with the times there’s a real risk it won’t be attractive to potential buyers because of the magnitude of the renovation task to get it up to speed with trends and innovations in the industry.
A significant number of businesses are underprepared for exit or succession and are yet to prepare a succession plan or exit strategy, and with a generation of business owners heading for retirement, their companies’ unsecured futures are becoming an increasingly significant issue.
The process of extraction from – or acquisition of – a business is lengthy but strategic planning and forethought can help smooth the steps to successful business exit or succession.
The conference was packed with timely and informative discussions on issues impacting the industry across topics including infrastructure, industrial relations, taxation, training and education, safety and technology, with attendees departing confident that we are moving towards a more productive, profitable, safer freight and road transport sector.
Matthews Steer is offering VTA members a free, one-hour consultation to review asset risks. To redeem this offer email Adrian Misiano and quote ‘VTA Asset Risk Review’ in the subject line.