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ATA Live: How the pandemic permanently changed industry

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Q&A panel ponders questions on health, operational and future challenges

The transport industry has received huge kudos for its response to the Covid-19 pandemic, but has lots to ponder about operational challenges into the future, the Australian Trucking Association (ATA) Live Q&A event has heard.

The remote conference comprised panellists from industry, government and health, including (as pictured above L-R): Queensland Trucking Association CEO Gary Mahon, KPMG Australia national sector leader of transport and logistics Brendan Richards, Straightshot Transport director Angela Welsh, Deakin University chair of epidemiology Catherine Bennett, and shadow transport minister Catherine King.

INDUSTRY COVID RESPONSE

Bennett says the trucking industry deserves huge credit for its response to the pandemic, due to its high-risk profile yet near seamless delivery of the freight task.

She cites the example of Uganda, where 70 per cent of cases were spread via truck drivers, highlighting what the risk could be.

"We know truck drivers are at risk, and some of the distribution centres have been hotspots," she says.

However, "rules on how to move through centres have worked to protect drivers and states from the movement of drivers".

Mahon puts this down to good management, noting that, right from the outset, operators stepped up in terms of hygiene management, carrying personal protective equipment (PPE), and self-isolation requirements.

He says the industry demonstrating reassuring signs that it was taking the threat seriously helped associations lobby and negotiate practical solutions with authorities, regulators and governments "and have them in a timely way".

Despite this, it was acknowledged inconsistencies across jurisdictions made it difficult to "interpret data feeds and information sources and get it across in as seamless a way as possible" to companies and drivers.

The panel broadly agrees the national cabinet process improved over time but didn’t bring about consistency, and lessons need to be learned for similar or other unforeseeable circumstances.

Mahon notes while public health rules can be specific to states, there should be "agreement that border passes, durations, truck-friendly test arrangements can be consistent".

Bennett agrees, noting that while early on the unknowns of the virus meant policies weren’t provided in a coordinated way – "scientists provide advice but that gets caught up in politics".

Now that industry has proven to be Covid-safe, it offers more reassurance and options regarding standardised border controls.

King argues the commonwealth should start preparing for the next pandemic now "and it needs to be resourced at state and territory level".

On the question of a potential vaccination, Bennett says truck drivers are vectors, and, given their task and demographic, should be considered as a group to go to the top of the list for vaccines, which should be mandatory for high-risk, essential workers.

While Welsh, despite supporting vaccinations, disagrees they should be made mandatory, King says it’s important governments and employers encourage vaccinations – in the face of much of the misinformation and conspiracies around the virus – for the sake herd immunity.

On the question of how the pandemic has changed industry, Mahon pinpoints the technological side, including contactless delivery and some of the flow-on effects to logistics, such as pick and pack, have been accelerated, as have remote Zoom meetings.

Bennett sees industry in a better place not just to prepare for future pandemics but to reduce risk of other illness in workplace, including colds and flus.

Better hygiene and masks are seen as good benefits from re-engineering workplaces and operating procedures for the benefit of future prevention, she adds.

ONGOING ISSUES

Questions not specific to, but accentuated by, the virus, include rest areas and payment terms.

As the definition of ‘essential workers’ has come to the fore and evolved during Covid-19, truck drivers fall into that category "and they need to rest to do their jobs properly".

Mahon says rest areas should "not be built ad-hoc, opportunistically" but rather built after "establish[ing] a pattern with certain standards around drive-through parking with toilets and water".

King hopes the upcoming federal budget, which is projected to include a heavy infrastructure spend, factors in rest areas.

"If you’re building roads you need more rest areas for truck drivers. They are not that expensive, and quick to build," she adds.

She also supports legislating "failsafe mechanism" around mandating payment terms and says her party would continue to push for such reforms.

The panel heard of ballooning payment times combined with growing instances of ‘pernicious’ practices around reverse factoring and credit facilities profiting from delayed payment.

Welsh says her firm seeks to impose a seven-day limit and is prepared to pursue the matter through the courts.

FUTURE OF INDUSTRY

Richards offers an existential view of industry challenges post-Covid and what operators need to do to remain relevant and thrive into the future.

As it is still a "heavily capital-intensive pursuit with low net profit", keeping the wheels turning during the pandemic has come at a significant increased cost around PPE and Covid-safe plans, he notes.

As it is a massively fragmented and competitive industry, lower margins combined with capital intensivity and long finance lock-in periods mean the challenge becomes: "how do you maintain a profitable business but remain nimble enough to pivot when new opportunities or challenges arise and ensure the business is safe?"

These challenges aren’t distinctly different to pre-Covid times, Richards notes, and the issue with the sector broadly that it is "critical to support the economy but doesn’t make enough return" and "the task of moving freight is perceived as transactional in nature".

"Being more relevant is about skills and mindset", and the opportunity for operators "is to build themselves more deeply into supply chain so they are less displaced".

Operators "need something additional – typically skillsets that aren’t necessarily in trucking operations".

Therefore, the question becomes: "What do you invest in? Grow fleet and double down on transactional nature, or bring skills and expertise as a supply chain management and consulting business?"

It’s a scenario Welsh says her firm, despite being a small operation, has pondered – and benefited from by providing additional expertise and reassurance to clients, especially during the pandemic.

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