Game-changing market trends

In May 2016, ARTSA will host the second Global Heavy Vehicle Leaders Summit in Melbourne. Titled Game Changers, it will once again be supported by Prime Creative Media – marking the third time that our Association has teamed up with the Melbourne publishing house to create a successful international conference.

Building on the success of our first Leaders Summit in 2014, this year’s event will be all about uncovering the game-changing forces emerging around us and putting them into context – thus the bold title. We want to find out where change is coming from and then learn how to utilise that information in real life and make it applicable in our own businesses.

So, what are themes and trends that could influence the heavy road transport sector over the next five or ten years? Here are just some of my ideas – feel free to reach out to us or Prime Creative Media to share yours.

The past 12 months have seen a major contraction of road haulage related to the mining industry. This has affected both bulk freight volume and journey numbers, leading to significant numbers of heavy vehicles being parked up, particularly in mining states, and forcing us to ask the question: Where to from here?

What we know for sure is that road freight continues to outperform the rail system in the movement of bulk agricultural products, so there could be great opportunities in that field due to the flexibility and efficiency of road transport – weather and harvest permitting, of course. In line with this, intermodal solutions may also bring new opportunities for those who embrace them. We also know that the Internet continues to change the retail sector, and with it the local delivery market. With increasing quantities of direct imports, all freight forwarders need to prepare for this new scenario.

Operators with good safety records will increasingly be recognised by clients and insurance companies. Advanced technologies will help achieve this outcome: Roll Stability Programs (RSP), for example, have proven effective at preventing roll-overs of trailers and tankers. Advanced braking systems such as Electronic Stability Control (ESC), Autonomous Emergency Braking (AEB), automatic downhill speed control and lane departure warnings will also become common technologies on new trucks. These new technologies have great merit although experience will be needed to overcoming teething problems. Smart companies will have a close relationship with equipment suppliers.

Australia will continue to adopt new high productivity heavy vehicle configurations. The change is being driven at present by Performance Based Standards (PBS) and by the National Transport Commission’s desire to normalise B-triples in Australia. The PBS scheme will facilitate the ‘normalising’ of high-productivity combination vehicles. In the future, the need to reduce greenhouse gas emissions per tonne-kilometre will also pressurise governments to allow greater access to high productivity vehicles.

The debate over the significance of greenhouse gas emissions is over and the era of response has begun in Australia.

The cost of fuel has recently declined and will be low for at least the next 12 months. Yet, it is unlikely that Australia will have a fuel economy design rule in the next few years because there is no international consensus about how to do so. In this respect, the fuel-efficiency debate is different from the gaseous-emissions domain, where an international consensus exists.
If the Australian road transport industry is to avoid eventual fuel tax increases to promote fuel economy enhancements, it needs to demonstrate substantial progress in improving fuel-economy per tonne- kilometre.

The Australian trailer manufacturing industry is experiencing greater competition from foreign manufacturers – partly because of the growing capabilities of Asian and particularly Chinese manufacturers, but also because of the manufacturing efficiencies accruing to large (global) suppliers. The internationalisation of vehicle technical standards will also contribute to the trend, but there are also issues to be considered, namely our unique Australian requirements, the low Australian currency value and last, but not least, subjective perceptions of quality standards. Nonetheless, there will be continuing commercial pressure in the Australian trailer industry that will result in agglomeration and rationalisation.

Attracting, training and developing staff will continue to be a key success factor for Australian transport operators. High performing drivers help improve safety, compliance and fuel economy, and return equipment in good a condition. Identifying and training high performing drivers requires good business planning and execution, and the same is true for diesel mechanics – even though the downturn in the mining sector may increase availability in this segment. Still, our industry needs to train, recognise and remunerate high performing mechanics better.

Class-leading companies have continuous improvement systems in place and they encourage all staff to participate. They identify sub-standard performance and near-miss incidents to make timely improvements. Successful continuous improvement is led from the very top; then the whole management team will give it high priority. Getting efficiencies from intelligent tracking and reporting technologies could make a difference in this context as tracking and monitoring technologies are now mature. Every truck can operate as a mobile office that is in communication with head office – but successful companies will have to solve the data overload problem first.

The Internet provides the mechanism to disrupt the road freight market by allowing clients to change logistics providers regularly. The market will be better informed about rates and capabilities, so successful operators will provide excellent customer service and use market intelligence to get return loads.

Autonomous driving of trucks is a long way off. Despite this, platooning of trucks on long-haul double highways will soon be possible. That is, communicating trucks will travel in convoy and closely follow a leader. Significant fuel efficiency and safety performance improvements are possible. Governments will need to consider how to promote truck platooning, though.

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