Road clearing for trucking players

05/02/2018 - 16:02

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SPECIAL REPORT: An improved outlook among the state’s resources players is contributing to renewed positivity in the trucking sector, with investment in technology upgrades a focus for some logistics businesses.

Road clearing for trucking players
A return of confidence to resources businesses has led Bis chief executive Brad Rogers to see longer-term opportunities. Photo: Attila Csaszar

An improved outlook among the state’s resources players is contributing to renewed positivity in the trucking sector, with investment in technology upgrades a focus for some logistics businesses.

Bis chief executive Brad Rogers said signs were improving in the resources sector, although  recovery was at an early stage and for the most part yet to flow through to the Bis business, which focuses on longer term, production-based contracts.

“I think that’s coming …  it will take a period of time (before) that flows through to increased production, which is where we come through,” Mr Rogers told Business News.

“Over the next 18 months (we’d) expect that to occur, those back-to-normal, course-of-business decisions are starting to be made.”

However, that would not necessarily mean contract prices start to rise.

“The market is still very cost conscious; I expect that to be the case for a while,” Mr Rogers said.

“There’s still some surplus equipment around as well. When demand starts to come back there will be a further lag before that capacity is consumed.”

In the meantime, Mr Rogers suggested it was important logistics businesses worked with stakeholders to make sure labour and parts costs did not start to grow and squeeze margins.

In a demonstration of the opportunities available, two subsidiaries of Victoria-based K&S Corporation – K&S Energy and Regal Transport – won new contracts in Western Australia’s north, according to that business’s annual report.

Part of that included new services in transport of fuel, LNG and LPG.

“Our Western Australian business is still impacted by the reduced infrastructure activity levels in the mining industry,” the K&S Corporation report said.

“(But) we have experienced a recent increase in mining sector related activity and northwest general freight volumes.”

General freight was still very competitive, K&S said.

Chief executive of transport and logistics provider Centurion, Justin Cardaci, said he saw positive signs coming from the resources sector, although that was yet to translate into higher volumes.

Another growth area was in freight relating to retail, Mr Cardaci said, where online shopping was changing the landscape.

He said an increased reliance of customers in regional areas on internet shopping meant both an increased freight task and a greater variety of work.

Sadleirs Logistics chief executive Ian Kent said general freight volumes had grown steadily in 2017.

In particular, the latter months of last year were busy and up on 2016, strength that had persisted into January, he said.

But the business’s biggest growth had come from increasing market share on the east coast.

The biggest trucking player on the BNiQ Search Engine list, Toll Group, is investing $23 million in a new warehousing facility in Hazelmere, with recent approval by the East Metro Development Assessment Panel.

The freight centre is planned for a 13.7-hectare site near the intersection of Roe Highway and the Great Eastern Highway Bypass, and will operate 24 hours a day.

The business also acquired two marine supply bases, in Dampier and Broome, from MMA Offshore last year.

Tech focus

One major focus for trucking businesses that spoke to Business News was investment in technology.

SadleirsMr Kent said the company was investing about $3 million into new software, including a cloud-based system by Oracle.

That will give both the business and customers more transparent, real-time tracking of freight movements, improving efficiency and reducing costs.

“Customers, at the moment they might ring up and say they’ve got a pick-up this afternoon in Malaga; well, the driver might have already left Malaga an hour ago,” he said.

“So it creates a better optimisation of our fleet, of all of our facilities and gives the customer a greater openness about how they can book jobs.

“It allows us to go right on the front foot, to grow quickly.”

A further example of technology in the industry is Perth-based startup Instatruck, which has created an app for businesses to book trucking contractors in a manner similar to Uber.

Centurion also invested into technology, with $1.5 million spent to introduce Seeing Machines safety software to its fleet.

The technology was created in Australia and tracks face and eye movements.

The hope is that it will both improve safety and capacity utilisation, Mr Cardaci said.

Technological improvements were a constant focus in a competitive market, he said.

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