Hope for the best but plan for the worst…

Well, we know what happened in 2020.

From the perspective of a business owner in the transport industry in the South Australian market how was our business impacted and what are the lessons to be learnt in 2021?

To start with the business patterns coming out of lockdown was unlike any other year in my 25 year experience in the industry. It is my opinion the demand for transport service will outweigh the capability to supply drivers for the foreseeable future. Below are the reasons for this assessment:

  • Significant uptake in online ordering for B2C consumers
  • Positive impact on business actively fueled by fiscal stimulus
  • Low interest rates
  • Increase participation in the employment market
  • After a tough 6 months the business community is aggressive about regaining lost ground during the lockdown

I am sure there are plenty of other factors however the one’s noted above as a minimum have the potential to create a significant upswing for demand in the transport market.

It is my view the Owner Driver market was not totally prepared for the surge in demand October 2020 leading all the way to December 2020. We are aware driver exit the market for many reason:

  • Mechanical
  • Health
  • Family
  • Financial
  • Change in job prospects

However they enter the market from only a few avenues

  • Career driver seeking greener pastures
  • Not a career driver however has a commercial vehicle and is looking for a career change
  • Person without a vehicle but is willing to purchase

Whilst it is well documented interest rates are on the decline; the post COVID finance market has made it more challenging for new entries in the owner driver to purchase a vehicle as formally accepted low doc loans are now considered to be high risk.

The restriction of new entries into the driver market will be the challenge for transport companies which engage owner drivers to service the customer base. It is my view we cannot rely on Plan A alone. In fact we need to devise a Plan B and Plan C to resource drivers to fill the back log in expected demand come October, November & December 2021.

At Felix Transport we ‘hope for the best but plan for the worst’.

georgeHope for the best but plan for the worst…
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