The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
- Ernest Hemingway -
The cost of trucking, transport and logistics has risen steadily over the last two years and continues to rise. As an example, the cost of a shipping container moved from one place to another by sea is about four times more costly now than before the pandemic. Increases like that are common across road, rail, air and sea transport and also in respect of the cost of warehousing and general logistics.
Further to the existing issues, we've recently had major flooding in Australia which has closed many rail-routes, (a major derailment also contributed), forcing freight to go by road, and prices have sky-rocketed.
Added to that is the fact road-routes have been disrupted by flooding meaning route-diversions; that means additional time, kilometres, fuel, wear-and-tear, maintenance and so on...and more cost. Worse still, that cost gets passed along to the ultimate end-user, people like you and I, through more costly products. It's also meant shortages.
The increased cost of transport is beginning to take its toll on companies and consumers and it'll get far worse.
Last week, I took a call from a client, an engineering company, which manufactures railway track, switches and crossovers. After saying hello, (I could tell he was pressured), he said:
"I don't care how much it costs but I need a B-double and extendable from Adelaide to Port of Melbourne..."
I'm not joking, that's what he said. Basically, he told me to charge what ever I liked meaning he understands the transport situation we're in currently.
A B-double is a prime mover pulling two full-length trailers behind it and the extendable is a semi-trailer that can be either a standard semi trailer (about 13.7 metres long) to make it longer as required (he needs 17.5 metres for the rail track.)
My company quoted on this work four months ago and it was $5,750 +GST for a total of $6,325. The route is 726 kilometres one way and both trucks have to travel and arrive together; combined, they make up the full consignment and he needed five of them back then. That sounds like a lot right? That's because it is a lot, $31,625 for all five loads.
This is a section of switch that permits a rail traffic to switch from one line to the other.
That was four months ago when things weren't as pressured. Now, the way things are...that same B-double/extendable combination is going to cost him $9,350 inclusive of GST. That's 47.8% more that the last quote of $6,325.
I don't usually get involved with the operational side of the company but my customers feel comfortable with me so I tend to have to act as an intermediary to some degree at times, at least until it's time to book and do the work and then the operations team do the work. He called me also, because he was so pressured and, I guess, wanted to speak to a decision-maker. This means it was me who ultimately delivered the pricing.
I did so, expecting pushback due to the exorbitant price and...there was none. "Book it, I'll send you a purchase order inside of five minutes."
At that point I handed it over to operations and the process rolled out.
There is a lot of pressure at the moment and across so many different industries; I get to see and experience a lot of it because just about everything relies upon transport, here in Australia at least. I'm also a consumer and understand, all too well, the rising cost of living here. It's fast becoming a serious problem.
It's incredible to see just how wobbly supply-lines can be, how close to having nothing on the shelves in the shops society really is at any given point.
It makes we wonder if consumers really have any clue that within three days of transport failure they may not be able to buy anything - it happens already, just not on a wholesale scale just yet. Furthermore, the skyrocketing price of transport is causing prices of almost every product to do the same and, here in Australia, the cost of living is becoming untenable for more and more people each week which is widening the gap between the classes and eradicating what was formerly the middle class. It's a big problem - all of it.
My job is stressful, pressured and time-critical; it's extremely fast-paced, but that doesn't really cover it adequately in truth I guess. I'm often amazed at the price of transport, however understand the reasons. I think so many do not understand what the cost of moving things is though, they simply pluck their corn flakes off the shelf and move on. Living oblivious to what's being done in the background to sustain people's lives is typical, we just take it for granted, but having an insight into what's happening behind the scenes as I do is certainly eye-opening.
I wonder, if people knew how close to a lack of supply they really are, would they work a little harder to prepare for what will come?
Design and create your ideal life, don't live it by default - Tomorrow isn't promised so be humble and kind
Any images in this post have been taken me.