The current skills shortage could hamper Australia’s post-COVID-19 business recovery in the transport industry. COVID-19 has significantly affected supply chains, and its effects are likely to linger into the future even as restrictions are eased. Both supply chains and consumer buying habits have been significantly impacted and may take time to recover.
Why is there a skills shortage in the transport industry?
It seems that COVID-19 has created a perfect storm to affect the transport industry in Australia. Not only has Australia’s international supply chain been disrupted by air and sea freight delays, our road transport of goods domestically has been significantly affected as well.
Due to business lockdowns and social distancing, there has been a surging demand for parcel deliveries around the world during the pandemic. Australia has been no exception, particularly in our most locked down cities (Melbourne and Sydney, our two largest cities in terms of population).
Australia relies heavily on truck transport due to the vast distances between our capital cities and regional towns. However, many trucking companies have struggled to keep up with the surging demand due to a shortage of drivers. More than 80% of employers in the transport industry have shortages of both heavy vehicle and general drivers.
The dire situation has been compounded by thousands of drivers leaving the industry during the pandemic. This has occurred as a result of their frustrations at lengthy interstate border closures due to border crossing delays, mandatory vaccinations and other COVID-19 testing protocols that are being strictly enforced.
The rising cost of fuel is another significant issue affecting the transport industry at the moment, as well as the growing digitisation of supply chains that are requiring workers to upskill and learn new technologies.
The impact on businesses
Supply chain issues like driver shortages, transport delays and rising costs have a significant flow-on effect for all businesses that rely on the deliveries of stock to sell or raw materials to use in production.
When businesses have less stock available to sell to customers and less raw materials to use to produce goods, their sales will likely drop, and cash flow inevitably suffers. Despite the significant financial support provided to businesses whose turnover reduced or stopped entirely during the COVID-19 restrictions, many have had to close their doors for good. Others have had to scale back their operations significantly.
How invoice finance can help
If your business cash flow is being affected by the current skills shortage in the transport industry and associated COVID-19 supply chain issues, invoice finance is a potential solution.
Invoice financing lets you turn your unpaid invoices into cash via a line of credit based on the value of your accounts receivables. You can use your line of credit anywhere, anytime, to keep on top of your business expenses. There’s no need to put any other business assets up as security, and your line of credit can grow as the balance of your invoices grows.
While it’s not a solution to the current skills shortage in the transport industry and across the whole of Australia, invoice finance is a simple, convenient way to help ensure your ongoing business cash flow during these uncertain times.
As for the skills shortage…
In time, the skills shortage will be corrected by way of government intervention or the basic economic principles of supply and demand. If the transport industry offers drivers better work conditions and a higher salary, eventually, more people will gain the necessary skills to move toward the industry. But, even if it was possible for transport and logistics businesses to offer more money right now, the upskilling of potential employees will still take time.
The skills shortage won’t be corrected overnight, but rest assured, it will be eventually. Until then, try to find ways to reduce costs, cover your expenses and manage your cash flow.