Transport and logistics

The transport and logistics industry in Australia and New Zealand encompasses a diverse range of service providers including freight, rail, air, road and related support. As the industry continues to consolidate to meet the increasing demands of its customers for ‘end to end’ services, smaller road haulage companies in particular are facing a unique and complex set of challenges.

 Issues

We see the current issues affecting smaller haulage companies as being:

  • a lack of sophisticated business processes as small, ‘mum and dad’ businesses expand
  • a lack of contractual understanding (that is, limited power to negotiate terms and conditions with customers)
  • customers’ increasing price sensitivity (due to the growing purchasing power of major retailers) while fuel and wage costs rise year after year
  • limited industry benchmarking to compare and measure performance
  • weaknesses in key sectors adversely affecting demand (such as retail and manufacturing)
  • driver shortages and tactical or ineffective retention strategies.

In addition, other emerging macroeconomic issues include:

  • increasing safety and compliance standards
  • implications of Euro V and VI (emission standards)
  • further consolidation across the industry
  • the impact of government policy on investment in road versus rail transport
  • inadequate management information systems.

Questions that should be asked 

Given the above issues and the continued strong demand for transport and logistics services, the key focus for small- to medium-sized businesses is how they can grow sustainably and service their debt while managing increasing cost pressures.

Small road haulage companies should ask themselves:

  • Do I really understand my business? How profitable is it? Which clients are contributing the most to my profitability?
  • Do I understand the complexities and ramifications of my current supplier contracts?
  • What do my business processes look like and do they need to be revised?
  • How can I mitigate the risks of fuel price changes, subcontractor costs, driver shortages and retention, repairs and maintenance, and empty running?
  • How can I streamline my business and what KPIs should I be considering?
  • Have I considered succession planning?

Our expertise

To assist these operators in addressing the above issues and questions, our dedicated transport and logistics specialists can provide an extensive range of industry expertise, including:

  • restructuring – acquisition or divestment of business units (or material assets), sale of business and managed wind-downs
  • business review experience, including experience with prominent logistics businesses offering ‘end to end’ solutions
  • monitoring, including budget and forecast reviews, identifying meaningful KPIs and assessing performance improvement plans
  • sustainable debt assessments
  • business valuations.
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