AusRAIL, Market Sectors

Freight and logistics industry faces crisis conditions

<p>The freight and logistics industry faces the very real prospect of going into a serious market decline in coming months, an industry group has warned.</p> <p>Philip Lovel, executive director of the Victorian Transport Association, said a range of global, national, local, environmental and economic factors would converge over the next month and spell some difficult times for the industry and the community as a whole.</p> <p>"It has been a difficult 12 months for industry, with operators having to recover from a range of cost increases and fuel price spikes having a highly damaging effect on the way business is done," Mr Lovel said.</p> <p>The past few months especially have seen some severe cash flow impediments. </p> <p>BAS periods for July and October, wage hikes from the national wage adjustment, fuel levy recovery, a difficult last trading quarter and limited freight have all eaten into operating capital.</p> <p>A difficult trading quarter has seen fuel hitting $1.35 a litre, with fuel companies putting pressure on operators to adjust their payment periods to 21 days from the traditional 30 days. </p> <p>Operators have reported losing accounts with fuel companies because of inability to comply.</p> <p>"Some companies have actually dropped their rates just to stay afloat, impacting negatively on the industry as a whole and we have seen debtors out by up to five to seven more days than normal, while operators have had to seek earlier payments just to keep afloat," Mr Lovel said.</p> <p>The latest developments on the ports and the hold-ups there are only going to aggravate this crisis even further. </p> <p>"Industry is looking at an industrial relations upheaval up ahead," he said.</p> <p>"Global economic factors, Hurricane Katrina, security issues &#8211 these all represent what we fear is a confluence of contributing factors whose sum will severely affect Australia’s key industry sector."</p> <p>Mr Lovel said if there was ever a time for the Federal Government to look seriously at the introduction of Performance Based Standards (PBS), it was now. </p> <p>"Industry needs better productivity &#8211 on our roads, in our rail network, for our vehicles," he said. </p> <p>"This means greater capacity for trucks, rail improvements, more freight corridors, greater accessibility. What this also means is a better-trained workforce and safer roads. </p> <p>"There is a pay-off for the community."</p> <p>Mr Lovel said the other side of the coin &#8211 the result of inaction now &#8211 was higher prices on the supermarket shelf down the track. </p> <p>"There is a concrete wall ahead of us and we’re heading straight for it," he said. "Industry, government and the community need to be aware of this."</p> <br />