Getting fundamentals right is essential for success

It’s important, however, that they not lose focus on business fundamentals that can have immediate and direct bottom line impacts. That’s why operators need to keep a firm eye on revenue and costs, as deviation or under-performance on these key business drivers can have a profound and lasting effect.

From a revenue perspective, customers must always remain at the forefront of every transport operator. Without customers, freight and logistics businesses would have little reason to exist, and as the prime source of revenue the customer must always remain king for any operator worth their salt.

In responding to and managing customer needs and expectations, operators need to be mindful of their rates, cost models and strategies and tactics for helping customers achieve their growth plans.

Every customer is different, with some having ambitious plans to grow size, profits and market share, and others content to maintain the status quo. As an operator it’s important to have a clear understanding of customer growth objectives, so that you can tailor your service offering to meet their expectations.

On the flipside, controlling costs is fundamental to the success or failure of any business, but especially transport, where one of the largest costs – fuel – can fluctuate sharply and suddenly.

There are essentially two forms of costs operators need to factor into their business planning, and get right for setting themselves up for success. Wages, fuel, rent and compliance costs are typically the biggest bills operators face, and are arguably the most visible due to their size, frequency and impact on revenue and the bottom line. Insurance, taxation, legal and safety costs are equally important, but perhaps less visible than other costs.

Both visible and invisible forms of costs must be effectively and diligently managed, and operators need to be astute to regulatory changes and revisions that can impact on their costs.

This is especially applicable to human resources and the way that transport businesses manage their wages bill.

The recent Road Safety Remuneration Tribunal’s establishment of legally binding national minimum payment levels for Australian contractor drivers performing long distance work, which took effect on 4 April, is a very live example of how regulatory changes can impact on costs.

The Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 sets minimum payments for contractor drivers engaged in the road transport and distribution of goods destined for sale or hire by a supermarket chain and long distance operations in the private road transport industry.

It’s important that operators familiarise themselves with the Order and adjust their payments accordingly. Getting business fundamentals right – and the tools for achieving that – is expected to be a major focus of the VTA’s annual State Conference in May, for which planning is well underway.

Delegates will hear from a range of speakers from industry, government and academia, who will reinforce key elements that transport operators need to get right to be a successful industry participant.

Conference formalities will commence on Monday, 30 May with a keynote opening address from the Shadow Minister for Ports and Deputy Leader of the Liberal Party, Hon. David Hodgett MP.

The remainder of the two-day Conference will see delegates participate in a range of plenary sessions, panel discussions and workshops, and receive advice and updates on practical steps they can take to improve their revenue and reduce their costs.

Customer service, human resources, training and education and the deployment of new technology will be addressed by presenters as essential elements that transport operators must get right to maximise their revenue, keep their costs down and keep their operation as efficient as possible.

The VTA is now accepting registrations for this important event through www.vta.com.au or by contacting the VTA directly. Pricing and further conference information is available at the website, and I hope to see you there.

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