For many of us, trucking is in our blood, we’re passionate about the industry and many who are working in the transport industry today grew up around it. However, that isn’t the case for everyone.
As your transport business grows you may hire employees who are new to the industry. This blog is a short transport industry 101 that will provide even the most naïve transport newbie with the general information they need to become an Australian transport industry pro.
How big is transport?
It is easy to underestimate the size of the Australian transport industry and its contribution to the economy. The Australian Bureau of Statistics reported that in 2015-2016 transport activity contributed $122.3 billion to Australia’s gross domestic product (GDP). This represents 7.4% of Australia’s economy.
The transport industry also employs approximately one million people, or 8.6% of all employed people in Australia. And to top it off there are a total of over 620,000 trucks registered in Australia, plus almost 100,000 buses.
Breaking it down
The size of the truck
One way to break down the transport industry is by type of vehicle.
At the small end, transport starts with utes and small trucks (under 4.5t total weight or ‘GVM’) which are able to be driven on a car licence. Then comes rigid trucks over 4.5 tonnes with two to five axles, these require a truck licence.
Rigid trucks are most commonly used for ‘last mile’ deliveries, where small volumes of goods or discrete objects are being taken directly to their final destination. This is great for versatility but comes at a higher cost per tonne and with limits on total volume/weight of goods that can be carried.
More payload can be added by adding a trailer behind a truck. Sometimes this will be carrying the same goods as the truck, sometimes it might carry something completely different. For example, a tipping truck could be carrying soil and towing a piece of earthmoving machinery on the trailer.
The biggest trucks are known as ‘articulated trucks’ and these consist of a prime mover (a truck designed to tow trailers but not carry goods itself) and between one and seven trailers. This allows tremendous volumes of goods to be moved by a single driver and makes Australian road transport the most efficient in the world.
The goods on board
Another way to segment the transport industry is by the goods they carry.
Many transport operations are specialised, they move one type of freight and their training, processes, and equipment, are designed to do that one task as efficiently as possible. For many freight tasks, the vehicles are designed so that they can’t carry other goods. For example, you won’t see a livestock trailer carrying grain.
Some transport businesses are diversified, carrying a range of goods, sometimes in parallel, and sometimes fulfilling a seasonal freight task like the harvest of a particular crop.
A large portion of freight moves with general carriers, often this freight will be bundled up into either pallet loads or into shipping containers. The carrier may have limited knowledge of what goods they’re moving and be carrying goods for many different customers at once.
Who owns the goods
Another way to segment the Australian trucking industry is whether the goods are being carried by a hire and reward transport business or whether the truck is being operated ‘in-house’ by a company whose main business is not transport.
37% of transport economic activity, totalling $45.3 billion in 2015-2016, was undertaken ‘in-house’ by non-transport businesses. The industries with the greatest use of ‘in-house transport’ are construction, agriculture, and mining.
The size of the company
The final and critical way to segment transport is by the size of the business. Unlike rail or aviation, road transport features thousands of operators, with the vast majority of transport businesses operate fewer than five trucks.
At the other end of town there are a small number of very large transport fleets, the largest three businesses transport are around 16% of road freight but this means that over 80% of freight is moved by smaller companies.
Now that you have the information needed to help new employees dip their toes into the world of transport, head to view the rest of our ‘Trucking Basics’ series that provides many tools and information to build up knowledge about the Australian transport industry.