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.
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.
Its good to know that you are aware of what really is happening economically by being present in the fundamental of all business... logistics. Goods don't matter if they can't reach where you can use them. Your for sure giving me more assurance that things around us are a bit unstable at the moment and preparation is always key. Thanks for the heads up and man the goods you transport are heavy duty!!! That's really not easy cause it all goes well most of the time but when it doesn't it needs every thing you got no matter what situation to solve the issue. It for sure seems this job is made for minded people like you.
Yeah, we move some legit big shit man, for sure. We move other things as well, a lot of timber, steel and concrete and also beverages, ambient temperature beverages like soda and alcohol. I don't mean a carton here and there, I mean massive b-double and semi trailer loads, every day. It's a big market. We've moved jet engines, military vehicles, windfarm turbines, towers and blades...pretty much anything you can think of.
I believe the smart people are looking at their own situation and how they can strengthen their position, mitigate risk and be a little more self-reliant...although history shows us that many do not which is what leads to panic buying. Doesn't happen? Erm...remember this little thing called covid 19 and how quickly shelves emptied? I know you get what I mean.
I think it's imperative people plan ahead, not to do so is just bonkers.
I hope you're well bro.
Yes. Yes, I am, and encouraging all that I know to do the same. Plant veggies, can food and keep your non perishables up.
I don't want to sound like someone coming unhinged, but we are all in deep, just many are in denial. I don't envy your job, soon enough, it will hit the fan. Not your job, but the *hit.
The long plan is to be as self sufficient as possible.
Thanks for giving an inside look! It's sad to see how far we have fallen.
Being a little more self-sufficient and increasing one's stock of non-perishable, water, batteries, toiletries and medical supplies will go a long way I think but, like you say, so many hold to the belief someone will come along and make everything ok, or are in outright denial. It's sad that humanity has lost the ability for self-reliance.
There's many factors that will contribute to the fall, many are already occurring.
Scary, isn't it? The water is important, so I bought a Berkey water filter system. It removes bacteria and viruses that most conventional filters cannot. Actually, it is considered a purifier.
Thanks for addressing a subject most don't want to talk about.
Indeed it is a little frightening, but it is a good poke in the ribs for those who take no responsibility for themselves. Will they react though?
I have a purifier tap as my kitchen tap, have done for many years. It does hit and cold and ambient. Best thing ever.
The purifier I have is also in my kitchen, and I have been using them since the early 2000s when I was living out of the country.
It is the best thing ever.
Do you have a Water filtration bottle that I take camping and when I go away on trips? Fast and easy and tastes good.
I have one of those filtration jugs in my off-road camper trailer for general purpose but when I fill the water tanks (140L total) I filter the water in through an online filter. It makes for good tasting water.
The water is great tasting, surprisingly. :)
In the last year, I have learned so much about how close to the brink of collapse civilization is. We are literally one degree away from chaos at any given point these days and have been teetering there for a while. I don't think the average joe sees it though. Normalcy bias I think has a large part to play in it.
I'm amazed that your client simply said go ahead, but I suppose he needed it done so was willing to pay whatever needed in order to have it so.
I just left a comment to Swigs, in this post, and yours aligns. The decline happens all around the world, every day, and most just ignore it; indeed, they add to it. A sad state of affairs.
Yeah your are absolutely right. In Pakistan rents are increases day by day. Because of dollar price going up and transport owners increase rents. Pakistani people's to much worry about his economy. Hopefully in 2023 our government gives some relief to the citizens.
The average rent for a 3 bedroom house in my city is $650 Australian dollars per week. That's a lot right? Problems are on the rise, and people's standard of living is on the decline.
Oh it's to much costly man and Pakistan situation is almost same in Pakistan 3 bedroom house rent is 50 thousands pkr and average salary is only 30 pkr.
It's bonkers really, but that's the state of the world.
A global lack of supply is imminent unless we all wake up to realize the problem and do something tangible about it. I wonder, however, how we'd come up with the solution.
Having this enlightenment as to how transportation affects everything around us gives one a deeper insight into thinking in the direction of survival rather than being oblivious.
It's not only in Australia but in many places, like Nigeria, that the transportation industry is taking a heavy hit.
Over here, we have issues with fuel for our vehicles. With every passing moment, it gets even more scarce, thus inflating the price. In turn, every other thing costs even more.
Different place, same problems...although we don't lack for anything in Australia really, we generally have plenty of everything, including fuel. Inflation is a thing though.
I might as well consider moving over there. The grass does seem to be greener.
Well, I'd say that one Australia is one of the best countries in the world from an all-round perspective.
That's really interesting. I never would have thought so. Now, I wish I was born there.
Thanks for sharing about the reality of the situation on the ground. Supply chain issues have been top of many people's minds for quite some time now. Hopefully we can see some relief in 2023.
I hope the relief comes, but I'm concerned it will not, things go from bad to worse unfortunately. We'll see though, time will reveal all.
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Every day, and most just ignore it; indeed, they add to it. A sad state of affairs. I'm amazed that your client simply said go ahead, but I suppose he needed it done so was willing to pay whatever needed in order to have it so.
The problem is for a lot of companies is that they have contracts with their customers so they have no choice but to move the product. That means that they then have to factor in that scenario (rising transport costs) on their next tender and that may result in them losing the work. There's many issues.