SPECIAL REPORT: WA could be about 1,000 truck drivers short at a time the industry believes there are signs of an upswing.
Western Australia’s freight businesses are turning to foreign labour to meet the demand for skilled workers, due to a shortage of truck drivers, heavy vehicle mechanics and logistics experts throughout the state.
High demand on the east coast and global workforce needs are exacerbating the local driver shortage, while many supply chain managers ar leaving the state for overseas projects.
Western Roads Federation chief executive Cam Dumesny says he gets a call nearly every day from local freight companies wanting to employ heavy vehicle mechanics.
“The biggest issue facing the industry at the moment is a shortage of suitably qualified drivers and mechanics; that’s been an ongoing issue but it’s certainly picking up,” Mr Dumesny told Business News.
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Mr Dumesny said one company had recently flown a mechanic in from the Philippines.
“We’re going to have to start bringing (more) mechanics out of the Philippines and into the regions because we can’t recruit mechanics,” he said.
“Nobody wants to import foreign labour, the preference would always be employ locally, but nationally we haven’t been addressing traditional blue collar skills.”
Wage pressure was building for mechanics in particular, and although that was not yet a problem with truckies, the state would still need about 1,000 more drivers, Mr Dumseny said.
“One company was 30 drivers short,” he said.
“Traditionally we used to pull them out of the east (coast), but the east now has got the same problems because they’ve got big infrastructure projects.
“We need to address this driver shortage. It’s a global problem.
“The US is something like 300,000 drivers short, Europe is 150,000 drivers short.”
And the WA deficit extends to other roles in the logistics sector, including schedulers and supply chain/logistics managers.
Driving much of that shortage was the fact many professionals with experience were being lured overseas, Mr Dumesny said.
“We are finding increasingly, the skills in our sector are being sought around the world,”he said.
“We’ve got people in Kazakhstan, Mongolia, the southern Russian republics, Africa, because the skills we have in WA are world class in large-scale remote distribution.”
Mr Dumesny told Business News that demand for WA expertise presented an opportunity to build an export focus in the logistics sector.
There was also a potential threat, however, that a lack of drivers would push the case for automation before it was ready for mainstream use, he said.
Qube Logistics state manager Matthew Bronickis said there was strong demand for drivers as activity was set to pick up.
“Everybody is (looking for drivers),” Mr Bronickis told Business News.
“We are constantly looking for drivers, because of growth, and also people move on.
“It’s a very old driver pool at the moment. People are retiring, there’s not a lot of young people coming through the industry.
“It takes a lot of concentration and a lot of skill to do it (driving).”
A strong grain harvest this year had been one positive factor creating work, with agribusiness representing about a fifth of Qube’s local market.
About half of Qube’s WA business was trucking bulk commodities for resources companies, and there was a promising outlook in that space as well, Mr Bronickis said.
“There’s really good signs at the moment,” he said.
“A lot of the larger projects (are) starting to request tenders and pricing with not-too-distant futures on start-ups.
“It’s a lot more positive than it had been in the past couple of years.”
Another local industry executive, who asked not to be named, is more cautious.
“All the signs are positive, but it hasn’t yet (happened),” he said.
“We’ve seen a huge amount of enquiry, but not enough of them yet have translated into physical work.
“It’s certainly very tight.”
As with many logistics businesses, the company changed tack after the end of the previous boom and was still finding its feet, the executive said.
However, the retail sector was a strong performer.
“When you change direction around your work, it takes a little while for things to settle and find out where things are going to land,” he said.
“In the past there was more work in the north-west than we could do. Of late there’s not been that sort of project-style of work that we traditionally have done.
“We remain confident that the volume of work will return, we’re just not exactly sure when.”
Community challenge
Freight and Logistics Council of WA executive officer Kellie Houlahan said further challenges for the industry would be protecting freight corridors and ensuring continued social licence.
The council acts as an advisory body to the state government.
“We’re talking to local governments and planners to (help them) understand the freight and logistics task, and the impact that planning decisions can have on freight operations,” Ms Houlahan said.
“It’s a nationally recognised issue.”
She said poor decisions now could have serious long-term impacts on the supply chain.
Such a case occurs when developments were built adjacent to freight rail lines without suitable effort to mitigate noise, with Coogee a prominent example.
Broadly, there was a major frustration in the freight industry that community expectations did not match up with demand for freight services, Ms Houlahan said.
“The general community don’t really understand freight, or at least the way freight impacts on them in their daily lives,” she said.
“They’ll see a truck or a freight train and they may not like it because they have a perception that … it’s not safe, or noisy.
“But there’s no link (in their mind) necessarily to what’s in the back of that truck … and how that impacts you as a consumer, being able to have all the choice that we have.”
Ms Houlahan said the problem was worst in inner-city areas, which had a high level of urban build up and need for waste removal, and growing delivery requirements, such as those to support online shopping.
“Everything (you) touch, as you go about your day, that didn’t get there on its own, there’s a whole supply chain,” she said.
Steady going
The upswing in lithium investment and production in WA is having a positive impact for some logistics businesses.
Qube is expecting lithium will drive a lift in earnings, after building storage facilities at Port Hedland and Esperance.
The company has a contract with Altura Mining, and has been transporting lithium from a Pilbara mine operation to Port Hedland since production started in the middle of 2018.
Lithium was one factor in Qube’s particularly strong year in WA, moving from sixth place to second on the BNiQ Search Engine trucking and logistics list.
The list is ranked on staff in WA, with Toll group remaining in first place with 2,000 employees.
Osborne Park-based BIS won three contracts, all outside WA, and moved back a rank to third place on the list.
Chief executive Brad Rogers told Business News the company’s outlook was positive, although there was not a lot of opportunity for new long-term contracts yet.
“Most activity in the market is around contract extensions and expansions right now,” Mr Rogers said. “This should improve over the medium term.”
Hampton Transport Services was picked for work at Mincor’s Widgiemooltha gold project, and Schenker Australia was selected for heavy haulage at BHP’s South Flank iron ore development.
K&S Corporation won work at Roy Hill, although it has told markets margins in WA are tight, with timber operations in the state recently downsized.
Other contract winners included Centurion, which secured a fuel haulage deal with Viva Energy after acquiring a part of the Fuel Trans Australia business.
Centurion was particularly busy on the acquisition front, buying Triton Heavy Haulage in July.
The company also won a $75 million contract with Anglo American in Queensland.
West Perth-based CTI Logistics has been on the expansion path, buying Stirling Freight Express and Jayde Transport in the past 18 months.
Nonetheless, Centurion fell one rank on the BNiQ list, to sixth and CTI fell one spot to be fifth.
One planned acquisition that did not eventuate was Chinese conglomerate HNA Group’s $400 million purchase of AHG’s refrigerated logistics arm, which is ranked 11th on the BNiQ list.
Queensland-based Aurizon suffered a setback in WA, too.
The business suffered a $31.7 million impairment in the 2018 financial year because it ceased service on a key iron ore contract, Cliffs Natural Resources’ Koolyanobbing operation.
