The third-largest contributor to carbon emissions in Australia is one of the country’s oldest and most manually driven industries: trucking. The connective tissue of the industry is also highly analogue, with Australia’s shippers large and small engaging in siloes with trucking companies across the country. Interactions take place in an almost exclusively manual way, resulting in significant waste for shippers and carriers alike – an estimated 30 per cent of kilometres driven by Australian trucks today carry empty loads, with one in every two trucks left standing still at any point in time.
For shippers seeking freight services, the greater challenge is that there is more demand than supply, which makes finding capacity in the market extremely difficult. At the same time, the cost of freight is still much higher than it was before Covid. As in most markets, larger trucking companies subcontract around 40 per cent of their freight channels through long tail subcontractors (less-than-truckload shipping businesses) – an environment that has resulted in a proliferation of middlemen between owners and operators, thinning margins for the small businesses conducting the actual driving work.
“In Australia, there’s a massive driver shortage,” says Geoffroy Henry, founder and CEO of digital freight forwarder Ofload – a business working to coordinate the market to help resolve systemic issues in Australia’s trucking sector as an end-to-end technology supply chain partner for domestic freight movements. “It’s partly because of the disruption Covid created, and also because of an immigration problem, with no one coming into the country for the past two and a half years. It’s estimated we’re lacking about 200,000 drivers in Australia across all types of freight. This means trucking companies are sitting on assets, that no one can drive. It’s a huge problem.”
With business forecasts looking increasingly unstable – and now with rising fuel prices leaving owners facing mounting cash flow restraints – many operators are seeing the attraction of withdrawing from the industry. A SARTA survey conducted earlier this year suggested that 57 per cent of trucking businesses had doubts that they could survive through September if changes were not made. At the same time, smaller long-tail businesses face a larger barrier in not being able to afford to provide real-time visibility on their vehicles, making them less attractive to shippers who need to display instant tracking info to customers.
“You have a big gap where the bigger trucking companies that can actually afford to meet the customer expectation are struggling because of the issue of driver shortage,” says Henry, “while the ones that are slightly more immune can’t keep up with the customer expectation because they don’t have the means to invest.”
These systemic issues on the carrier side have resulted in multiple pain points for shippers who are seeking to book, manage and analyse freight movements digitally to meet the escalating demands of buyers. For Ofload, this has prompted a move to offer centralised visibility to shippers over available truck capacity and costs across their carrier network, as well as over past, current and projected freight movements.
Henry’s Ofload business works to introduce structural oversight across a highly fragmented industry, making it possible for players across the spectrum to take advantage of a systematic satellite view on Australian trucking and allowing optimisation of all fleets across roughly 1600 road freight companies all controlled through a connected ecosystem. Ofload’s platform offers understanding at all times where all trucks in the network are, how they’re operating, when they’re empty and where they’re going. The system is also capable of establishing a certain level of predictability in freight, being able to measure the likelihood of trucks turning up in some areas based on seasonality or other patterns – and manages performance metrics such as DIFOT (delivered in full on time).
“We need to be proactively filling those gaps,” says Henry, “because if no one truly knows where the trucks are then you have vehicle space going to waste. Operationally, we aggregate the long tail, coordinate it and then allocate the most relevant and best partners to manage the freight of our clients, while the technological layer provides them with integrated visibility and control for collection, delivery tracking and key milestones – as well as a seamless online and centralised booking process across the digital supply chain.
“If you can coordinate the market to the extent where there’s no more waste, you’re literally reducing 50 per cent of the carbon emissions in the country while making all the trucking companies far more profitable and efficient, making the cost of freight far lower, and in doing so actually reducing inflation. We have to leverage technology to coordinate this market or things are never going to change.”
For shippers seeking to reduce freight inefficiencies and freight firms seeking greater financial viability, click here to visit Ofload.
