Industry Skills Report Transport and Logistics Industry Skills Council September 2004 an ANTA Board initiative Executive Summary Australia's transport and logistics industry is the artery of the Australian economy. The transport and logistics industry provides a range of services that are critical to the maintenance of Australia's advanced economy and to the operation of all industries and enterprises. It influences our everyday lives enabling economic activity, mobility and social interaction. It provides the vital service of moving freight and passengers locally, regionally, nationally and internationally across a variety of modes - rail, road, marine and aviation. The role of the industry is as a key enabler - centrally important for achieving substantial improvements in productivity and growth within the economy. Most of the industry is exposed to competition at a national or international level and is sensitive to changes in the level of economic activity - both overall, and to merchandise trade in particular. It is now recognised that economic success is based as much on the cost, quality and efficiency of supply chains, networks and relationships - including transport and logistics systems - as it is on the competitiveness of individual enterprises. These factors influence the competitive position of countries and regions. Transport and logistics underpins all industries, every enterprise and our daily lives. The industry: Ą employs over 411, 000 people, or 4.35 percent of Australian employment Ą contributes about 5.0 percent of Australia's Gross Domestic Product Ą is dominated by small business, which accounts for approximately 98 percent of firms and 35% of the industry workforce Ą has a predominately male workforce (almost three quarters of employees) Ą has an aged workforce in comparison with other industries, with the average age estimated at 45 years Ą has a workforce with lower levels of educational qualifications compared to other industries. Drivers of industry skill needs The transport and logistics industry has been through a period of major reform and will continue to feel the impact of new technologies, increased competition, greater demands from customers, globalisation and continual change to regulatory frameworks. Recruitment in the transport and logistics industry will continue to present challenges across all industry sectors. Reasons for recruitment problems include the image of the industry, the lack of clear career pathways, and particular issues relating to the employment of young people. Strategic initiatives are being employed to address these challenges. One of many challenges within the transport and logistics Iindustry, is that of an ageing workforce. Only 34% of the workforce is aged less than 35 years, while 66% are over 35 years of age. There will be a loss of significant skills and corporate memory as large numbers of employees retire and loss of capacity if retirees are not replaced. Customers want a one-stop shop for all their transport and logistics needs. They want transport and logistics services provided just in time, by exceptional service staff, for not much money and they want to know where their products are at any time of the day or night. These demands are major drivers of change within the transport and logistics industry. The transport and logistics industry has been a strong performer and will continue to grow into the future. Opportunities exist for transport and logistic firms to perform functions previously regarded as core functions within other enterprises. However, this expansion will not necessarily translate into additional workers that require additional training. Rather, training is more likely to be required in new and innovative business processes. Major reforms to the transport and logistics industry coupled with extreme profit margin pressures and global effects such as terrorist attacks, war and the price of oil, have all combined to create a very intense business environment for operators within the industry. The industry must work smarter and the challenge will be to increase the industry's investment in its people in order to remain competitive. Social and environmental considerations cannot be divorced from the health and safety issues facing the transport and logistics industry. Fatigue issues, pressures to protect the environment, especially the marine environment, improved security requirements and new chain of responsibility legislation is placing the onus for a safe and healthy workplace on everyone in the industry. Continued and increased demands on safety training are an imperative in the industry and for the community at large. As new technologies continue to permeate business strategies and practices, employees at all occupational levels within the industry have greater requirements placed upon them to use technologies efficiently and to be computer literate. Change management skills will also become more important as the industry strives to keep up with, and implement, new technologies on a continuing basis. One issue emerging in the industry is the fragmentation of information technology systems. Industry needs to strive towards the integration of systems otherwise the cost of new technologies, particularly to small and medium enterprises (SMEs), will become prohibitive. Within the next 10 years, globalisation will compel the major enterprises in the local freight industry to develop strategic alliances with internationally based freight service providers or face marginalisation. The transport and logistics industry is subject to a broad range of national and state regulations and policies. The nature of the transport task means that the regulatory arrangements applying in many other industries can also have an impact. A further challenge for the industry and training providers is to keep up with the changing regulations, especially since regulations vary from state to state. The high risk nature of the transport and logistics industry is leading to a range of issues involving both the mature aged and youth spectrum of the industry. These two factors together with the pressure of a wide range of health and community safety issues are a driver for training. E-business approaches are pivotal in supporting developments in logistics and supply chain management. Some SMEs are finding it difficult to implement e-business processes. The cost of implementation and resistance to change are some of the barriers that need to be addressed by the industry. The development of business skills in an industry that is dominated by a growing trend towards outsourcing and contract employment, is an imperative in the development of a more dynamic and responsive workforce. The skills challenge The transport and logistics industry is moving from a situation where the importance of skills and knowledge was unevenly recognised across the industry and by government to one where skills and knowledge are an essential driver of economic success and competitiveness and underpin industry career paths. The transition can only be effected and sustained by a strong and enduring partnership between the transport and logistics industry, government and education and training providers, recognising the differences in needs that exist between the various sectors of the industry. Greater emphasis on nationally consistent vocational education and training, high quality and flexible education and training providers and a commitment by industry, individuals and government to collectively make a major and ongoing investment to support an increase in the skills profile of the industry is essential. A plan for the future The report articulates the requirements for this transition and in particular has highlighted areas where additional emphasis on skill development will be required, including: Ą skills for new technologies specific to the industry as well as the acquisition of core information and communication technology skills. Ą the integration of skills across the transport and logistic sectors to support the effective operations of supply chain management (SCM), particularly in those occupations that depend on and contribute to systems integration. Ą management skills at all levels, but particularly those associated with change management. Ą skills to meet new regulatory requirements, particularly in the areas of health and safety. Ą customer service and relationship management skills. Ą the development of higher order thinking skills. This report is being circulated to industry as a consultation draft. TDT Australia is seeking your input into all aspects of the report with specific emphasis on the proposed strategies that seek to address future skills needs. Contents Executive Summary 2 Contents 4 Purpose 5 Industry profile 6 Employment trends 11 Drivers of industry skill needs and skills issues 15 Worker attraction and retention 18 Demographic Changes 21 Consumer and Customer Service Demands 25 Market Expansion 27 Competitiveness and Productivity Demands 30 Health and Safety Issues 34 Technological advancement 38 Globalisation 41 Regulatory compliance 43 Insurance 46 E-business 48 Employment Arrangements 50 Vocational education and training trends 52 Appendix A 57 Transport and logistics qualifications 57 Appendix B 60 Reference 60 Purpose This draft Industry Skills Report has been developed in partnership between the Transport and Logistics Industry Skills Council, trading as TDT Australia and the Australian National Training Authority. The purpose of this draft report is to engage the transport and logistics industry around current issues and how these issues may or may not affect the future skills base for the industry. The report further suggests strategies that look at a broad range of issues, depending on the causes of skill needs, but have a particular focus on training requirements. Feedback from the consultations to be undertaken by TDT Australia will help to inform and further shape these strategies. The report has been designed to assist industry, training providers and training policy makers, and it is intended that the report will be updated each year to reflect contemporary developments. This report focuses on the following sectors of the transport and logistics industry: Ą road transport Ą rail transport Ą maritime Ą stevedoring Ą aviation Ą warehousing Ą logistics. In this report, data from the Australian Bureau of Statistics (ABS) for the transport and storage industry (as defined by the Australian and New Zealand Standard Industrial Classification ANZSIC) has been used for the transport and logistics industry. Upon completion of consultation by TDT Australia, a final Industry Skills Report will be produced and issues and strategies raised by industry in this report will be incorporated into a National Industry Skills Report. The national report, which will provide advice to inform planning decisions, will be presented by the ANTA Board to state/territory and Australian Government ministers responsible for training around June each year. Industry Profile The transport and logistics industry provides a range of services that are critical to the maintenance of Australia's advanced economy. It is the artery of the Australian economy, which provides the vital service of moving freight and passengers locally, regionally, nationally and internationally across a variety of modes - rail, road, sea and air. Transport and storage businesses contributed about 5.0 percent or $37 billion to Australia's Gross Domestic Product (GDP) for the year ending March 2004. About 2,285 million tonnes of freight are transported around Australia each year and about 541 million tonnes of freight are exported from Australia each year. i The industry's activity is focused around a nation-wide network of cross modal ports, roads, railways, freight yards, airports, distribution centres and materials handling. Throughout this network move the transportation vehicles - trucks, trains, planes, ships, buses, trams, taxis and so on. The transport and logistics industry in general is dominated by small business, which accounts for approximately 98 percent of firms. Approximately 65 percent of employment in the industry is in small and medium enterprises (i.e. less than 100 employees). According to the ABS, the transport and storage industry accounted for 4.8 percent of all operating business in 2000-01(latest available). An average business generated revenue of $2.1 million, employed 10 people and recorded a profit of around $77,000.ii The people engaged in the transport and logistics industry work in a vast range of occupations from drivers to freight handlers to logistic planners. They access an enormous array of skills at all levels, ranging from basic entry level skills to the high level co-ordination and problem solving skills required by those managing complex logistics operations or supply chains. The industry is made up of the following seven sectors. Road Transport This sector has two major arms - freight and passenger services. It is the largest employer, employing half of the persons in the industry or about 220,500 peopleiii and this number is steadily increasing. The road transport sector: Ą transported 1 664 billion tonnes an average of 103 km in 2001-02iv Ą utilised nearly half a million vehicles in 1999-00. The structure and size of the businesses operating in road freight transport, in particular, varies enormously, from very large fleet operators who involve themselves in all aspects of the freight logistics sector to a large number of owner drivers with one or two vehicle operations. v The road freight task is expected to grow significantly, with the Department of Transport and Regional Economics forecasting a doubling of the tonne kilometre carried by this sector by the year 2020. Cars are the dominant transport mode for domestic passenger travel. They account for over 80 per cent of total kilometres travelled. Private vehicles are the strongly preferred mode for travel for domestic passenger trips up to 400 kilometres.vi Rail Transport Rail transport is comprised of rail freight and passenger services, suburban railway transport services, railway station and terminal operations, and container terminal operations. The sector has changed significantly in the past decade. Previously, it was an industry dominated by publicly owned, vertically integrated state-based railway entities. Today it is comprised of entities that offer access to third party operators or are largely vertically separated. The new entities are often nationally focused and many are privately owned. This opening of rail to new operators has resulted in a keen commercial focus within the industry.vii Rail transport employs around 36,600 people or 8.9 percent of the industryviii. During 2001/2002 the rail sector carried 568 million tonnes an average distance of 275 kilometres and transported 660 718 million passengers.ix With 43,000 kilometres of track covering harsh environments, the Australian rail network represents the world's most efficient heavy-haul network. x Maritime Maritime has two distinct sub sectors, blue water (large ships under international survey) and near coastal (vessels, registered at state and territory level, including fishing boats, charter vessels, ferries, regulatory and patrol vessels, etc). It employs about 12,600 people, which is 3 percent of the industryxi. Blue water vessels must comply with all national and state regulations as well as meet the International Maritime Organisation's regulations. Near coastal vessels play an important role within the tourist market, especially along the Queensland coast. In 2001 there were nearly nine thousand ships registered in Australia, comprising: Ą 5,420 recreational vessels (62 percent) Ą 2,240 fishing vessels (26 percent Ą 1,020 commercial and trading vessels (12 percent). In 2000 the Australian trading fleet was comprised of 77 ships, with 70 ships being registered in Australiaxii. Stevedoring Stevedoring involves the unloading and loading of cargo transported by ship at 38 ports around Australia. The amount of freight moved in the five major ports in Australia increased by 42 percent between 1996/97 and 2000/01. Australian seaports are mostly operated by a combination of state and territory-owned corporations and private sector stevedores.xiii Aviation Aviation has four principal areas, general aviation, regional airlines, domestic airlines and international airlines. It employs around 46,600 people, which is 11 percent of the industryxiv. The aviation industry in Australia and the Asia Pacific region is continuing to develop and expand. As a whole, the airline industry has mostly recovered from the Asian economic crisis, September 11 and the Ansett collapse. Airline passenger numbers have effectively recovered to pre September 11 levels and with new domestic players, Virgin Blue and Jetstar, future annual growth is projected to exceed 6%.xv During 2001-02, 29 605 million1 passengers travelled on domestic routes within Australia. During 2002-2003 8.36 million passengers arrived in Australia by air and 8.21 million passengers departed. Warehousing In recent years, warehousing has seen a transition away from the traditional perception of the sector as one of forklifts, racking, picking and myriads of paperwork, to an environment involving the increased usage of information technology, sophisticated conveyor picking and packing processes, paperless records and manifest management, revolving door receival and dispatch. Aided by the advances in technology and business systems, there has been a significant change away from the proliferation of small suburban warehouses towards large hub-based distribution centres situated close to major arterial roads. Logistics The logistics sector involves moving, storing and handling freight from a start point to an end point.xvi Logistics is the process of balancing the movement of inputs and outputs and the storage of stocks with the aim of meeting demand, minimising total costs and maximising efficiency. The Department of Transport and Regional Services conservatively estimates that in 1999-2000, freight logistics activities represented approximately nine percent of Australia's gross domestic product or $57 billion2. The Freight Logistics in Australia action agenda estimated that approximately $31 billion worth of freight logistics activities were performed in-house. The remaining $26 billion represented those activities performed by the freight logistics industry, comprising those firms providing freight logistics services to private and government customers.xvii The warehouse and storage sector which encompasses both warehousing and logistics employed around 27,700 people, almost 7 percent of employment in the transport and logistics industry in 2003/04. xviii 1 Includes scheduled activity only (domestic and regional). 2 This estimate covers a broad definition of logistics which involves everything to do with freight movement which includes the transport sectors contribution to GDP. The breakdown of the seven sectors and the specific sector occupations is as follows: Sector ANZSIC Industries Occupations Road Transport Road freight transport Road passenger transport (including bus, tram and taxi) Road freight drivers - delivery, freight transport and furniture removal services Bus transport drivers- long distance, urban and trams Taxis and hire car drivers Armoured car escort Crane, hoist or lift operator Mobile plant operator Rail Transport Rail transport (passenger and freight) Rail freight and passenger train drivers Railway station and terminal operators Container terminal operators Freight handler Railway track repair mobile plant operator Railway assistant Maritime Transport International sea transport Coastal water transport and inland water transport (passenger and freight) Coxswain Deckhand Master Captain Stevedoring Stevedoring Port operations Water transport terminals Freight forwarding Crane operator Loader Aviation Transport International and domestic passenger and freight air transport Services to air transport Flight attendants Air traffic controller Aircraft pilot Ticket and customer service officers Baggage handler Aircraft ground support staff Refueler Warehousing Warehousing and storage Forklift drivers Packers Material recording and despatching clerks Logistics Cross sector Logistics manager Supply chain manager Training Packages coverage TDT Australia is responsible for the following Training Packages. Training Package Description Transport and Distribution Training Package Covers road transport, warehousing, stevedoring, rail operations, rail infrastructure, transport and distribution and logistics management. Aviation Training Package Covers most aspects of the aviation industry including flight crew functions, air traffic control, check in services, aviation training and instruction, baggage handling, cabin crew functions, aircraft ground support, arrival services, aviation freight handling and management and ticketing. Maritime Training Package Covers all aspects of the maritime industry including maritime operations, marine engine driving and maritime engineering. P & O Ports Enterprise Training Package This is an Enterprise Training Package developed by P&O Ports. Queensland Rail - Civil Infrastructure Enterprise Training Package This is an Enterprise Training Package developed by Queensland Rail. QANTAS Enterprise Training Package This is an Enterprise Training Package developed by QANTAS. Flowcharts outlining qualifications under TDT Training Packages are at Appendix A. Employment trends In 2003/04 the transport and logistics industry provided 411,000 jobs or 4.4 percent of Australian employment. xix The road transport sector dominates employment in the transport and logistics industry, with almost 220,000 employees or 54 percent of employment. Services to transport, which includes transport administration tasks and stevedores is the second largest sector with 66,500 people employed in 2003/04. Aviation was the third largest employer, with 46,600 employees or 11 percent of employment. Employment in the industry has been growing, but at a lesser rate than employment in all industries. Employment in the transport and logistics industry is predicted to grow by 6.5 percent in the eight year period 2003-04 to 2011-12. However, there is one sector, rail transport that is forecasted to decline by 13 percent over this period. Employment forecasts, 2003-04 to 2011-12 Industry Employment 2003-04 ('000) Employment forecast 2011-12 ('000) Total change from 2003-04 to 2011-12 (%) Average annual growth 2003-04 to 2011-12 (%) Road transport 220.5 238.9 8.3 1.0 Rail transport 36.6 31.8 -13.1 -1.7 Water transport 12.6 13.1 4.0 0.5 Air transport 46.6 48.6 4.3 0.5 Srvcs to transport 66.5 74.1 11.4 1.4 Total transport (a) 383.3 407.0 14.9 1.6 Total storage 27.7 30.9 11.6 1.4 Total transport & storage (a) 411.0 437.9 6.5 0.8 All industries 9,441.4 10,294.6 9.0 1.1 (a) Total includes Other transport. Source: Monash Centre of Policy Studies. The rail sector is in decline due to the changing nature of consumer patterns. "Just in time" business practices are having a large impact on this sector. Consumers will no longer tailor their business processes around train timetables nor allow their product to take too long to get to their customer. The cost of freighting goods by rail and is also becoming prohibitive and consumers are turning to more time and cost effective options. However, new initiatives including the Australian Government's AUSLINK, the recent opening of the Darwin to Alice Springs rail line and recent increase in private sector involvement in rail, may have some impact on future employment levels and skill needs in the rail sector. Road and rail drivers dominate employment within the transport and logistics industry, as indicated by the following table. The skill profile of the industry is also skewed towards the vocational education and training related occupations. Location of main transport and storage workers across industry, 2003-04 Occupation Road Transport no. Rail Transport no. Water Transport no. Air & Space Transport no. Other Transport no. Services to Transport no. Storage no. Total Transport & Storage no. Other industries no. Total all industries no. Vocational Education & Training related occupations Managing Supervisors (Sales & Service) nec 6,200 1,900 500 900 0 3,100 500 13,000 448,600 461,600 Other Advanced Clerical & Service Workers 5,300 400 400 6,000 0 900 300 13,200 185,000 198,200 Travel Attendants 0 300 200 5,700 0 200 0 6,400 500 6,900 Intermediate Clerical Workers 15,000 4,200 2,300 6,000 100 11,700 5,600 44,900 865,600 910,500 Transport/Despatch Clerks 3,500 700 1,100 1,600 0 4,300 900 12,100 19,000 31,100 Intermediate Service Workers 2,200 400 600 2,100 0 17,300 100 22,700 533,700 556,400 Intermediate Plant Operators 7,300 2,800 300 2,900 0 2,500 4,600 20,500 174,700 195,200 Forklift Drivers 4,600 200 100 100 0 900 3,900 9,800 42,000 51,800 Road & Rail Drivers 146,400 7,300 400 900 0 1,900 1,400 158,400 130,800 289,200 Truck Drivers 79,200 400 300 300 0 800 1,100 82,100 67,400 149,500 Bus & Tram Drivers 27,600 100 100 100 0 300 0 28,200 5,500 33,700 Train Drivers & Assistants 900 6,700 0 0 0 100 0 7,700 1,600 9,300 Other Intermediate Production & Transport Workers 1,800 200 1,400 600 0 1,100 6,400 11,500 220,400 231,900 Elementary Sales Workers 2,900 1,900 300 5,500 0 2,700 600 13,900 752,200 766,100 Other Labourers etc 4,000 2,400 500 500 0 3,100 700 11,200 430,900 442,100 Location of main transport and storage workers across industry, 2003-04 (cont.) Occupation Road Transport no. Rail Transport no. Water Transport no. Air & Space Transport no. Other Transport no. Services to Transport no. Storage no. Total Transport & Storage no. Other industries no. Total all industries no. Higher Education related occupations Specialist Managers 5,700 1,200 900 2,000 0 3,500 1,600 15,000 321,800 336,800 Business/Information Professionals 2,200 1,600 500 3,300 0 3,500 1,100 12,100 526,800 538,900 Social/Arts & Miscellaneous Professionals 700 400 2,600 6,100 0 3,100 100 13,100 293,900 307,000 Air Transport Professionals 0 0 0 5,800 0 1,200 0 7,000 2,300 9,300 Sea Transport Professionals 200 0 2,600 0 0 1,600 0 4,400 5,700 10,100 Source: Monash Centre of Policy Studies. Good prospects exist for travel attendants, transport/dispatch clerks and bus and tram drivers, as shown below, with many job opportunities in regional areas. Employment forecasts, selected transport and logistics occupations, 2003-04 to 2011-12 Occupation Employment 2003-04 ('000 persons) Employment forecast 2011-12 ('000 persons) Total change 2003-04 to 2011-12 (%) Average annual growth 2003-04 to 2011-12 (%) Travel Attendants 7.0 8.1 14.6 1.7 Transport/Despatching Clerks 31.7 37.3 18.0 2.1 Forklift Drivers 52.0 63.7 22.6 2.6 Truck Drivers 150.6 157.1 4.3 0.5 Bus & Tram Drivers 33.0 33.3 0.7 0.1 Train Drivers & Assistants 9.4 9.9 5.1 0.6 All occupations 9,441.4 10,271.3 8.8 1.1 Source: Monash Centre of Policy Studies. Historically, males have dominated the transport and logistics industry with little proportional change between the numbers of males and females in the industry between 1997 and 2002. Part time work is a small but significant component of employment, and has been increasing over time. Part-time employment comprised 16 percent of total employment in November 2002, compared to 13 percent in 1997. Compared to all industry, the transport and logistics industry has a lower proportion of part time employees (16 percent compared to 29 percent).xx The industry has an aged workforce in comparison to all industries. The average age of the industry has been estimated at 45. In 2003, the transport and logistics industry had lower levels of employment in all age groups below 35 years (34 percent compared to 42 percent), and higher levels in age groups above 35 years (66 percent compared to 58 percent). About 60% of the workforce has no post-school qualifications. The skill profile of this industry is skewed towards less-skilled jobs, although one in seven workers holds a Certificate II or III qualification. Drivers of industry skill needs and skills issues Skill needs across industry can occur for a range of reasons - often intermixed and often complex. Research has isolated a number of major trends and issues that impact on industry's skill requirements. It is apparent from the list that many solutions to meeting skill needs are not related to the provision of additional training. Such is the case where difficulties in worker attraction or retention are being experienced. Meeting skill needs is not confined to teaching and learning systems but also includes the way work is organised, recruitment policy and practice, employee relations and job design. Assuring appropriate skills for industry requires some consideration of all these elements. In addition, remedying skill shortfalls within some occupations may only be possible through in-house approaches due to the specific skills required. The following table summarises the extent to which drivers of industry skills needs are impacting on across the seven sectors of the transport and logistics industry and the nature of these impacts. Industry trends and issues - sector specific hotspots Driver of industry skill needs and skills issues Road Rail Maritime Stevedoring Aviation Warehousing Logistics Worker attraction and retention Industry image Career paths Attracting a younger profile of entrants Re-skilling existing workers Industry image Industry image Career paths Attracting a younger profile of entrants Re-skilling existing workers Industry image Attracting younger entrants Industry image Attracting younger entrants, particularly females Career paths in dynamic environment Re-skilling existing workers Industry image Attracting a younger profile of entrants Re-skilling existing workers Career paths, particularly into logistics and SCM Demographic changes Long haul truck drivers - ageing workforce Gender imbalance Gender imbalance Ageing workforce Gender imbalance Ageing workforce Gender imbalance Gender imbalance Consumer and consumer service demands Public perception of industry Increasingly sophisticated customer requirements Public perception of industry Quality of service Just in Time Track and Trace Just in Time Track and Trace Market expansion Doubling of total freight task in next 20 years AUSLINK Demand for air freight services Capacity of aircraft Supply chain management Supply chain management Competitiveness and productivity demands Price Tighter profit margins Price Speed Price Speed Continual labour market reforms Smaller trade volume Price Reducing profit margins New longer haul and more fuel efficient aircraft Integrated systems Integrated systems Health and safety issues Chain of responsibility Fatigue management Security issues - 9/11 implications Greenhouse emissions issues Traffic congestion issues Fatigue management Security issues - 9/11 implications Fire risk management Rail yard pollution hazard management Vessel safety - ageing of blue water fleet Fatigue management Marine pollution issues e.g. ballasting Environmental aspects of groundings and sinkings Increased homeland security focus Security issues - 9/11 implications Noise abatement Technological advancement Integration of information networks Intelligent Transport Systems for regulatory compliance Integration of information networks Integration of information networks Integration of information networks Integration of information networks Automated inventory and 'track and trace' systems Integration of information networks Automated inventory and 'track and trace' systems Globalisation Seamless movement of goods Seamless movement of goods Declining blue water shipping fleet International comparison Global industry restructuring Seamless movement of goods Greater international competition Seamless movement of goods Regulatory compliance Chain of responsibility legislation AUSLINK Inconsistency between States and Territories National Rail Reform Rail safety regulation AUSLINK AUSLINK AUSLINK Increased regulatory requirements regarding homeland security AUSLINK Insurance Insurance excess requirements for under 25s Risk management Risk management Risk management Risk management Rise in insurance costs Risk Management Risk management Risk management E-business E-Business systems Lack of understanding and perception of high set up cost by business particularly SMEs E-Business systems E-Business systems E-Business systems E-Business systems E-Business systems E-Business systems Compatibility Employment arrangements Owner driver Casualisation Outsourcing of warehousing functions Outsourcing of logistics functions Worker attraction and retention Recruitment in the transport and logistics Industry is presenting continuing challenges across many of the industry sectors. Reasons for recruitment problems include the image of the industry, the lack of clear career pathways and particular issues relating to the employment of young people. Strategic initiatives are being employed to address these challenges. Worker attraction and retention within the transport and logistics industry, as in all industries, is influenced by many factors such as remuneration, employment entitlements, the image of the industry and working conditions. In August 2003, average full-time employee earnings for persons in the transport and logistics industry ($922) was above the Australian average of $900.xxi The graph below shows that the transport and logistics industry has a higher proportion of employees (77.6 percent) with leave entitlements than the average across all industry of 72.4 percent3. 3 Leave entitlements comprise Superannuation; Holiday leave; Sick leave; Long service leave; and Maternity/Paternity leave. The previous and the graph below suggest that worker retention in the transport and logistics industry is better than the average across all industries. Some of this may be due to the high male representation in the industry as males typically have a longer duration of employment compared with females. 73 percent of employed persons in the transport and logistics industry are male, compared with 56 percent across industry overall.xxii Job vacancies are another indicator of worker attraction/retention. The transport and logistics industry job vacancies series appear to be influenced by cyclical factors with major peaks in job vacancies in this industry occurring in November 1996 (5,600), August 2000 (3,600), November 2002 (3,400) and in November 2003 (3,400). However, the general trend indicates that there has been no real growth in job vacancies over the last ten years, which further confirms that worker attraction is quite stable within the industry. The transport and logistics industry, despite having a higher than average remuneration and a better than average employee retention, has some distinct issues in attracting and retaining staff. The industry has experienced difficulty in recruiting young people. There are limited job opportunities for young people compared with industries such as retail and hospitality. Part of this is due to the high risk nature of the industry. This has impeded work experience placements via VET in Schools programs. Many young people, their parents, teachers and career counsellors are simply unaware of the available pathways for training and entry into the industry. Sectors of the transport and logistics industry also have significant image problems, with community perceptions of the industry including poor safety records, unpleasant working environments, unhealthy image, low wages, long hours, few opportunities for women, few advancement opportunities and demanding physical work. There is a growing need for skilled workers in road freight transport in particular, especially for heavy vehicle drivers. Earnings growth in other occupations and lifestyle factors associated with long haul driving were seen as contributing to the departure of existing workers and in deterring potential new entrants. xxiii As the workforce ages and less young people are being attracted to the industry, it is important to retain and attract older workers. Many mature aged workers hold the wealth of corporate knowledge and experience in the industry sectors. It will be increasingly important to develop strategies for retaining older workers and developing means of capturing and transferring that knowledge to younger generations through coaching and mentoring opportunities. Many specialist jobs are emerging in the industry, such as technological support staff, and it is important to be able to attract these specialists from other industries and provide opportunities for their skills to be contextualised to the transport and logistics industry. Implications for the skills base The major implication of recruitment difficulties in the transport and logistics industry is the emergence of skill shortages as the outflow of skilled employees is not met by the inflow. This is especially relevant for the road freight sector. Strategies There are a range of strategies that need to be implemented in order to attract and retain staff to enable the future growth of the transport and logistics industry. However, theses strategies are not all directly related to delivery of training. TDT Australia will need to work closely with all facets of the industry to assist in effecting industry wide change. Strategies include: Ą providing clear career paths (including articulation between the VET and Tertiary sectors) and clear information about career paths to enable informed employment and education choices Ą promoting the industry as employer of choice and developing "anti-myth" packages to promote the industry Ą developing options and pathways for school leavers Ą providing support for VET in Schools programs, particularly for pre-employment and industry preparation programs with structured and properly supervised work placement with due accord to age and safety issues Ą developing mentoring partnerships to facilitate the transfer of skills and corporate knowledge to new entrants and existing employees. Strategies for retaining employees in the industry could include innovative strategies such as providing more flexible working conditions for potential retirees to encourage retention in the workforce. Demographic Changes The challenge within the transport and logistics industry, is that of an increasingly aged workforce, particularly marked with only 34% aged less than 35 years and 66% aged over 35 years of age. There is also a significant gender imbalance with male employment dominating female employment 3:1. As for industry overall, the general ageing of the workforce and associated retirements will have an impact on skills needs in the transport and logistics industry. In 2003/04, 16 percent of the workforce was aged 55 and over. This is a comparatively high proportion when compared to 12 percent across all industries. Census data show that the age profile of the transport and logistics industry workforce has been increasing. For example, in 1996, 10.5 percent of the industry workforce was aged 15 to 24 years, with 11 percent aged 55 years or over. By 2001, these proportions had changed to 8.6 percent and 14.3 percent respectively. This tends to support anecdotal industry feedback that there is a high level of mature-age entry into the transport and logistics workforce. An ageing workforce is believed to be contributing to a projected driver shortage in the road freight industry. Census data showed that the age profile of truck drivers rapidly increased, from 1996 to 2001, where the number and the proportion of truck drivers aged between under 35 years of age fell significantly.xxiv There is a relatively low representation of women in the industry. Women represent 27 percent of the transport and logistics workforce compared with the average across all industries of 44 percent.xxv However, female employment is projected to grow by 13% from 2001 to 2008/9, while male employment is projected to grow by 11%. Of all female employees, 69% are in full time employment while 31% are in part time employment. The highest proportion of females are employed in administration roles in services to transport, and aviation, with a smaller proportion employed in rail transport, road transport, storage and maritime. Implications for the skills base There is a strong link between demographic changes and worker attraction/retention issues. As with industry generally, the challenge is for transport and logistics industry to either replace those who are retiring or to retain these persons in employment for longer. The ageing workforce trend and the industry gender imbalance present a range of training challenges for the transport and logistics industry. There is loss of significant skills and corporate memory as large numbers of employees retire. There are also a range of health issues to be addressed as the workforce ages. Other issues associated with an ageing workforce include issues relating to acquired conditions such as loss of hearing and vision, impacts of restricted movement and mature age onset diabetes. While these issues affect workers from all industries, it is the nature of the transport and logistics industry that has a relatively high risk working environment that will require employees to maintain reasonable health. Training in health and lifestyle issues may be one possible response to meet the needs of the ageing workforce. Particular skills gaps may develop because of the time it takes to replace retiring employees with others with comparable skills. This can be particularly so where experience plays a large part in determining the competency of employees and where forecasting and planning for replacement has not been undertaken. Where women are to be recruited into the industry, consideration must be given to the availability of flexible training that may be outside of normal hours, and the availability of e-learning facilities and resources. Strategies As many industries are experiencing the same ageing workforce phenomena, simply increasing recruitment effort aimed at younger employees is not a panacea for the industry. As with strategies associated with worker attraction and retention, direct training strategies only play a small part in rectifying issues associated with demographic changes occurring within the industry. Rather, a range of measures needs to be implemented to deal with this trend such as: Ą encouraging workers to remain for even longer in the industry - by implementing more flexible working arrangements for older workers, increasing monetary reward and providing for coaching and mentoring opportunities. Ą encouraging medical assessments and training the workforce to become aware of health and lifestyle issues, such as fatigue management and nutrition, that can impact upon work performance. Ą up-skilling of the workers remaining in the industry workforce to cover the loss of skills. Ą replacing lost capacity by having recruitment strategies that encourage young people to enter the industry. Ą attracting more females into the industry by targeting marketing and recruitment campaigns at female school leavers, providing for networking opportunities among females in the industry and presenting case studies of females that have achieved successes in the industry. Consumer and Customer Service Demands Customers want a one-stop shop for all their transport and logistics needs. They want transport and logistics services provided just in time, by exceptional service staff, for not much money and they want to know where their products are at any time of the day or night. These demands are major drivers of change within the transport and logistics industry. Changes in market demands have required industry to focus on increasing the range and quality of products and services offered. In many industries, products and services are often clearly differentiated between enterprises operating in different markets, and their skill needs vary accordingly. Issues include: Ą changing customer tastes, preferences and expectations Ą the need for innovative products and service delivery Ą increased environmental awareness and the expectation that products are environmentally friendly. The recent ABS Employer Training Expenditure and Practices Survey indicates that the reason Improve quality of goods services provided was slightly more important as a reason for providing training by the transport and logistics industry enterprises than it was for industry overall.4 Service delivery has been a major driver of change within the transport and logistics industry. The industry has had to respond to consumer demands for improved service like just in time, track and trace, quality of service and lower price. Warehousing and storage has seen major technological advances in recent years, with just in time systems significantly reducing the need for stockpiles of products, either in-house or through out-sourced contracts. Track and trace freight management systems also allow on-line real time tracking of vehicles and goods. Airlines are differentiating their product based on service. Aspects of quality of service are frequently used by airline management as a means of non-price competition, particularly in the business class market segment, which is less price sensitive. xxvi For most forms of freight transport, price is the key determinate in the purchasing decision. More efficient flows through better technology should lower the total cost of transport.xxvii Consumer perception of a company and its industry can also be key factor in the purchasing decision. A difficult and emerging issue for some sectors of the transport and logistics industry is a public perception of "...a dirty industry associated with heavy vehicles and diesel fuel emissions"xxviii. 4 Interpretation of the ABS Employer Training Expenditure and Practices survey should take into consideration the number of employers providing structured training. Within the transport and storage industry 17% of employers provided structure training compared with 41% across all industries. Other public perceptions include the industry's contribution to noise pollution and congestion in urban and local communities and marine pollution and degradation. The expected future growth of the industry will further increase these pressures. Implications for the skills base The rapidly changing business environment, in particular the implementation of just in time and track and trace technology is driving the demand for different forms of skills and knowledge, with particular emphasis on increasing management skills and developing change management skills to support the implementation of new technologies. For airlines to maintain their quality of service, existing and new staff require continuous training in customer service skills and relationships management skills. To remain price competitive in the transport and logistics industry, companies need to have a productive skills base. The increasing attention being given to environmental issues is creating demand for new industry technology skills in the implementation of environmental strategies, including freight management, back loading systems and waste management practices. Skill requirements are currently focussed on the management and high technical level, but can be expected to flow on to operational levels. Employees also need to develop technology skills that will enable them to move flexibly from occupations within sectors and across sectors in order to meet the changing demands of the Industry. Strategies Enterprises and Registered Training Organisations (RTOs) are delivering training in just in time, track and trace, customer service and relationship management. These are competencies within all of the transport and logistic Training Packages. Continuing to inform the industry and RTOs of the importance of these skills and promoting professional development of RTOs will assist in ensuring current and future employees are customer focused. Employ strategies to change the public perception of the industry to a more positive view of transport and logistics as a vibrant, dynamic and environmentally conscious industry. Market Expansion The transport and logistics industry has been a strong performer and will continue to grow into the future. Opportunities exist for transport and logistic firms to perform functions previously regarded as core functions within other enterprises. However, this expansion will not necessarily translate into additional workers who require additional training. Rather, training will be required in new and innovative business processes. In 2002-03 the transport and logistics industry generated $69.2 billion in revenue, which represented a 1.3 percentage increase compared to 2001-02. IBIS World has forecast that revenue will increase by 3.1 percent in 2003-04 compared to 2002-03, a further 4.3 percent increase in 2004-05 and an additional 3.0 percent increase in 2005-06.xxix The key sensitivities affecting the performance of the transport and logistics industry in Australia include: Ą the level of the world economic growth Ą the level of merchandise trade Ą the total number of tourist visitor nights Ą the world price of crude oil. xxx Table transport & storage GDP ($ million,2001-02 constant prices) Indicator 98-99 99-00 00-01 01-02 02-03 T&S GDP 30,726 31,963 33,621 34,709 36,307 Road 9,979 10,421 10,846 11,640 12,401 Rail, pipelines and other transport 3,651 3,726 3,774 4,211 4,727 Air 4,731 5,077 5,497 5,196 5,335 Water (sea) 773 760 734 632 634 Services and storage 11,150 11,505 12,171 13,030 13,212 T&S GDP per capita 1,624 1,669 1,732 1,765 1,821 T&S percent of national GDP 4.7% 4.7% 4.9% 4.9% 5.0% Note: T&S GDP relates to transport-specific businesses, excluding other transport activity performed by other businesses, and the value of non-commercial transport activities. Sources: ABS, Australian national accounts, National income and expenditure (5206.26). Road transport and services and storage5 sectors are the largest contributors to the GDP for the transport and logistics industry, providing 34 percent and 36 percent respectively. 5 Services and storage comprises activities such as warehousing, stevedoring and stevedoring. Maritime As shown in the above table, all sectors, apart from the maritime sector, have shown growth in their contribution to GDP over the past 5 years. Significantly, the Australian maritime industry is contracting, as the number of Australian flagged and owned ships has fallen by 36 percent in the eight years to 2002. Despite this trend, the number of ships has remained constant in the twelve months to June 2001 due to a growth in smaller intrastate trading ships serving niche markets. While employment has been decreasing in the blue water sector, it is increasing rapidly in near coastal shipping, with most of this growth being attributable to the rise in marine tourism. Aviation Factors determining demand for air travel include business growth, inflation rates, real household disposable income growth, exchange rates, airfares, tourism promotional activity and major world conflict. IBIS World Pty Ltd has forecast sector revenue to rebound to a growth rate of 8.8 percent in 2004-05 as air traffic normalizes. Smaller growth rates of 4.0 per cent and 2.5 per cent are expected for the years 2005-06 and 2007-08 respectively. xxxi However, a major constraint to this growth is insufficient airport capacity. This is particularly the case with Kingsford-Smith Airport in Sydney, where around 50 per cent of all international visitors to Australia arrive and depart. Demand for airfreight services is expected to be relatively strong during 2003 through until 2008. However, capacity will continue to be a constraining factor. In the long term, airlines are expected to invest in larger dedicated freight aircraft to take advantage of this fast growing sector.xxxii Market expansion The total freight task is forecast to almost double in the next 20 years. Growth of the road freight task has been affected by the growth of economic activities, changes in real road freight rates, improvement in road infrastructure and the quality of road freight services and competition from other modes.xxxiii Market expansion in the transport and logistics industry can also be strongly linked with advances in information communication technologies. The development and maintenance of effective and efficient complex supply chains, for example the development of track-and-trace freight management systems is a major factor in the current and future growth of the industry. This situation has opened opportunities for transport and distribution firms to perform functions previously regarded as core functions within other enterprises, not only in the transportation of freight, but even the management and financing of stock and inventory. The increasingly sophisticated technological environment is also driving industry consolidation and partnerships as businesses combine to attain the critical mass needed to cost effectively operate integrated systems. Implications for the skills base The transport and logistics industry has grown and will continue to expand, however, this may not necessarily translate to additional workers who require additional training. Training will be required, however, in new areas such as logistics services including supply chain management (SCM). The integration of skills across all sectors of the transport and logistics industry is vital to support the effective operation of logistics and SCM, particularly in those occupations that depend on and contribute to systems integration. The general requirements for the skill base to support effective logistics and SCM are: middle managers and above skills in logistics and SCM ability to work across industry and company boundaries management competencies that focus on outcomes rather than outputs moving from technical competence in service provision towards strategic management of services employees at operational levels a basic understanding of the supply chain and their role in the bigger picture customer service skills become vital as customers are the next links in the supply chain all employees increased information communication technology skills appropriate to their level of work, to deal with new developments and systems used in logistics and SCM relational management skills so links in the chain are seamless and goods flow smoothly across boundaries between business units, teams and businesses The challenge for the road transport sector is how to manage the conflicting pressures of freight growth with driver shortages and rising community and environmental expectations. One solution includes the increased use of technology in the road transport sector that will assist in meeting this challenge. Strategies In order to achieve a greater integration of skills across the industry, there is a need to develop articulation between the various forms of logistics and SCM training to support clear career paths: Ą from entry level through VET levels to tertiary level Ą from tertiary levels to VET levels to add industry level skills. In addressing these issues the Australian Logistics Council Steering Group has adopted four major directions: Ą ensuring that logistics training is nationally available and accessible (particularly in the tertiary sector) Ą ensuring that logistics courses (VET and tertiary level) are industry endorsed Ą increasing articulation between courses and providers - both VET and tertiary Ą developing logistics training at a multi-disciplinary level (ie enabling choices in subjects, courses and career path options). In order to assist in the industry consolidation that is occurring, the development of higher order thinking skills will be crucial for the successful expansion of the industry through its employees. The workforce will need to work smarter, not just harder and will need to develop information communication technology first principle skills that are transferable across industry sectors and across modern technological tools. Competitiveness and Productivity Demands Major reforms to the transport and logistics industry coupled with extreme pressure of profit margins and the effects of world events, such as terrorist attacks, war and the price of oil, have all combined to create a very intense business environment for operators within the industry. The industry must work smarter. The challenge will be to increase the industry's investment in its people in order to remain competitive. The role of the transport and logistics industry as a key enabler is central for achieving substantial improvements in productivity and growth within the economy. Most of the industry is exposed to competition at a national or international level and is sensitive to changes in the level of economic activity - both overall, and to merchandise trade in particular. It is now recognised that economic success is based as much on the cost, quality and efficiency of supply chains, networks and relationships - including ransport and logistics systems - as on the competitiveness of individual enterprises. These factors influence the competitive position of countries and regions. Productivity demands and resultant increases in efficiency in the industry are reflected in the labour productivity rates. The average increase in labour productivity, across all industry over the period from 1992-93 to 2000-01 was 1.8 percent per annum. The transport and logistics industry almost matched the average with an increase of 1.7 percent per annum.xxxiv While the transport and logistics industry has kept up with the industry average in relation to growth of labour productivity over time, it has not been a standout performer. This growth trend may reflect both major reforms in the industry coupled with intense pressure on margins, particularly in the road freight sector and the terrorist attacks of 2001 that crippled the aviation sector. Operators within the transport and logistics industry compete mainly on the basis of price. For most forms of freight transport, price is the key determinant in the purchasing decision. Speed is also a key determinant for spoilable goods such as fresh food products or cut flowers. The number of times an item is handled adds to its freight costs. This means that rail transport is only competitive if both origin and destination are close to rail sidings. For some major companies the ability to offer a complete integrated logistics service including freight forwarding and warehousing is becoming a key factor in the purchasing decision. xxxv The business environment in which the transport and logistics industry operates is continually changing, challenging businesses to be flexible and innovative in order to remain competitive. Challenges that businesses face include: Ą moves towards inter-modal integration6 Ą increased vertical and horizontal integration within industry Ą improving the return on capital in an environment where capital costs are increasing Ą increasing integration of transport systems and distribution centres Ą increasing domestic/international competition, both within and between transport modes Ą changing barriers to industry entry (variously increasing, some decreasing). There is also a considerable potential for competition to this industry in the longer term from electronic media. Examples are: Ą e-mail is reducing some demand for postal services (which are covered by a different Industry Skills Council), and could have an effect on freight services Ą video conferencing will reduce the need for domestic and international business travel Ą virtual reality may over the very long term compete with recreationxxxvi. Competition remains the dominant feature of the Australian road freight transport sector in particular (the largest four firms have a combined market share of only 15 percent) and profit margins are becoming much tighter over time. Owner drivers/small freight operators account for less than 12 percent of this industry's operating income, but they represent nearly two thirds of the total number of operating businesses. The financial situation of many owner drivers/small operators continues to be difficult due to intense competition. xxxvii Competition in the aviation sector is based on price, frequency and quality of service such as; expedited baggage handling, on-time departures and arrivals. Due to bilateral arrangements and associated landing rights at designated locations, competition, particularly in the international aviation sector, is controlled to the extent that Qantas is guaranteed around 38 percent of the market.xxxviii One of the forecast benefits of deregulation in the domestic aviation sector was the assumption that the entry of new operators would lead, inter alia, to lower fares for air travellers. There is no doubt that Virgin Blue has had a significant effect on the level and intensity of fare based competition in Australia.xxxix Airline passenger yields have been declining annually by about 2 per cent in real terms since 1970. The competitive environment has ensured airlines generally pass on to the consumers the benefits of productivity gains and aircraft technical improvements. xl 6 The development of interconnections or links between different transport modes (eg rail, road, sea etc) so that transport tasks are completed by the appropriate mode or mix of modes to obtain the optimal environmental, economic and social outcome (Business Entry Point 2002 website). Newer, longer haul and more fuel-efficient aircraft will be introduced into the aviation market place, which lead to greater productivity. These factors will affect airfares and it is expected that airfares will continue to decrease in real terms annually until 2008.xli However, fuel prices are very much out of the control of the airlines and this is component is a high contributor to total costs which will directly impact of the productivity gains of the airlines in future years.xlii This is also the case for the other sectors of the industry. Lastly, the productivity at Australian container terminals, as measured by NET Crane Rates, has improved significantly in absolute terms since 1997. These improvements have been due both to labour reforms and the influence of new technology. As a consequence, there has been an appreciable reduction in the overall productivity gap between Australian terminals and those at overseas ports included in a 2003 Productivity Commission research study. This has been achieved despite inherent disadvantages related to generally smaller trade volumes and throughput at Australian terminals. xliii Implications for the skills base Competitiveness and productivity demands are impacting heavily on the industry. The consequence is that skilling to underpin the required productivity improvements is a priority. The Industry must work smarter, not just in terms of the equipment and technology it uses, but in the knowledge and relationships it develops between individual components of the logistics chain.xliv The challenge will be to increase the industry's investment in its people - to increase the pool of suitably skilled workers to successfully research, develop, implement, use, manage and maintain the new processes that are introduced into the industry. Strategies Restructuring training resources to strategically focus on the needs of the industry will assist the business to remain productive in a very competitive market place. Strategic initiatives include: Ą developing generic resources that deal with understanding the transport and logistics industry in a local and global context and promoting these to school leavers and recruitment agencies Ą developing user-friendly training resources in areas such as barcoding and GPS, common to more than one industry sector Ą increasing the number of units of competencies where necessary reflect the range of technologies currently implemented in the industry Ą developing a range of technology training resources including bytes of information for use with mobile technologies Ą developing self-evaluation tools for RTOs to assess their capability to train the workforce. Health and Safety Issues Social and environmental considerations cannot be divorced from the health and safety issues facing the transport and logistics industry. Fatigue issues, pressures to protect the environment, especially the marine environment, improved security requirements and new chain of responsibility legislation is placing the onus for a safe and healthy workplace on everyone in the industry. Continued and increased demands on safety training are an imperative in the industry and for the community at large. Effectively managing occupational health and safety (OH&S) risks is a key requirement for all organisations. The expectations of the community and government continue to grow, demanding higher levels of performance in maintaining a safe and injury-free workplace. Health and Safety issues within the transport and logistics industry not only effects the workers, whether they be truck drivers, pilots, ship captain or crane operator, it also affects the community at large. Transport accidents, estimated at approximately $15 billion7 a year in the road sector alone, exact a large human and economic toll on the Australian community.xlv The relative importance of OH&S issues is reflected in the incidence of employed persons reporting workplace injuries as a proportion of employment. At 7.9 percent, the transport and logistics industry, was well above the 5.2 percent average across all industry of 5.2 percent. 7 The latest crash costs estimate (Bureau of Transport Economics 2000, Road crash costs in Australia, report 102, Canberra) uses data and is based on a 'human capital' methodology unlike some other countries which use a 'willingness to pay' approach which can lead to significantly higher estimates. Although OH&S is a major issue, and the proportion of work injuries in the transport and logistics industries is well above the average, there has been some progress over recent years in lowering the incidence of compensated injuries. Over the 4 years to 2000-01, the number of claims in terms of new compensated cases reported in the transport and storage industry decreased by 11 percent.xlvi The broader health and safety issues for the transport and logistics industry can be broken down into three categories: health of the workforce, safety of the workforce and safety of the community. Health of the Workforce The average age of the transport and logistics industry has been estimated at 45. Having an ageing workforce raises a number of health issues for the workforce. Acquired conditions such as loss of hearing and vision, impacts of restricted movement and mature age onset disabilities will further impact on the industry. Fatigue issues have also been raised by the industry as a major health issue for its workers, and the consequences of fatigue related accidents could have a great impact on the community at large. Significant national approaches to fatigue management have been foreshadowed in the road transport industry. Fatigue management is also a significant issue in other sectors besides road transport. For example, in the maritime industry, fatigue caused by quick turnaround times in ports in response to customer and industry demand is a significant issue, posing risks to both to crew and public safety. Safe Working As with all industry, both employers and employees have a duty of care to ensure a healthy and safe work environment. Pioneering new laws in the road transport sector called Chain of Responsibility principles through the Transport Report Bill puts the onus on all individual workers that make up the chain to access information and to ensure compliance with legislative and regulatory frameworks. Under the new Chain of Responsibility principles, each employee can be held legally accountable if, by their actions, inactions or demands, they contribute to road safety breaches. In other words, anyone who uses road transport as a part of their business shares responsibility for safety on the road and must exercise due care and take reasonable steps to prevent safety breaches. Employees involved in the following activities may be liable for safety breaches if they do not take due care when: Ą consigning - commissioning the carriage of a load by road Ą packing - placing goods in packages, containers or pallets Ą loading - placing or restraining the load on a vehicle Ą driving - the physical act of driving a vehicle Ą operating - operating the business which controls the use of a vehicle Ą receiving - paying for the goods/taking possession of the load. Employers or managers of businesses may also be personally liable for breaches by an employee who undertake one of the above activities. Community safety Increasing community and government concern about environmental safety and security requirements flowing from heightened terrorist activity has had a significant impact on the industry. There is growing pressure for protection of the environment from damage resulting from ship grounding, especially in the Great Barrier Reef and Torres Strait Islands, and sinking. The Australian Maritime Safety Authority response has been to partner with industry in promoting Australian standards to the International Maritime Organisation. They have also increased the inspection targets for ships visiting Australia's ports that have been identified as safety risks, from 80 percent to 100 percent of all tankers over 15 years old and 100 percent of single hulled tankers. Recent world events have heightened awareness of security issues generally, and focused attention on the need to better secure Australia's transport network from the significant economic and social damage that could follow a terrorist attack. The Australian Government has recently taken several decisive steps towards developing a comprehensive transport security regime. xlvii Parliament has passed both the Australian Maritime Transport Security Act and the Aviation Transport Security Act. As a consequence of these developments owners and operators of major infrastructure in these sectors are required to undertake appropriate security risk assessments and develop comprehensive mitigation plans.xlviii Implications for the Skills Base There is a continual and increasing demand for safety skills training resulting from the imperative to ensure that all employees are adequately trained to meet all OH&S and legislative requirements for safety in their workplace. Pressures both from within and outside the industry make this an imperative. Demand for safety skills will remain high as employees become more mobile - safety skills are a major component of most general skill upgrades resulting from the movement of employees between jobs. Demand for training in maintaining a healthy life style for older workers will also be required to ensure acquired disabilities associated with an ageing workforce don't impact on the health and safety of the industry and the general public. Individuals at all levels of the "chain", particularly within the road transport sector (but not exclusive to), require not only a thorough knowledge of the chain of responsibility legislation, but also the appropriate technology skills to access information. Such skills will include familiarity with the use of technology as well as the appropriate literacy/numeracy skills to interpret the information provided online by government regulatory bodies. Strategies Continued attention is needed to continue to increase safety skills in the industry. Importantly: Ą priority needs to be given to national consistency and quality in the application and interpretation of Training Packages and Australian Qualifications Training Framework (AQTF) in the areas of high risk and safety Ą encourage debate about psychometric testing and related issues within the industry training that deals with health, lifestyle and safety issues, need to be promoted within the industry Ą promotion of training that is clearly linked to developing understandings of roles and responsibilities in relation to chain of responsibility legislation is required. Technological advancement As new technologies continue to permeate business strategies and practices, employees at all occupational levels within the industry have greater requirements placed upon them to use technologies efficiently and to be computer literate. They are required to become proficient with a vast range of technologies as they are used within their work. Employees are also required to transfer first principle knowledge as new tools, systems, processes and innovations replace outmoded techniques. The transport and logistics industry is being transformed through the application of new technology. The industry is a high consumer of technology at every stage of its operations, both in the delivery of services - moving, packing and monitoring of goods - and the management of information and business transactions associated with those processes. Importantly, the use of information communication technologies and e-commerce approaches are pivotal in supporting developments in logistics and supply chain management. The ABS Employer Training Expenditure and Practices Survey for 2001-02 indicated the reason responding to new technology was a more important reason for providing structured training for the transport and logistics industry employers compared with industry overall.xlix8 It is the developments in information technology that are having the greatest impact on the productivity and performance of the industry. Examples of the range of current technologies being applied by the industry include: Ą paperless dispatch systems Ą proof of delivery imaging systems Ą electronic driver monitoring and driver fatigue management Ą use of GPS and on-board computers Ą vehicle routing and scheduling systems Ą integrated ticketing/access for passenger management Ą security, for example safeguarding premises, from oil terminals to small warehouses Ą track and trace systems that allow on-line real time tracking of vehicles and goods Ą vehicle and freight booking systems covering areas such as deliveries to retailers, sea/land transport interfaces, taxis etc Ą electronic data interchange and automatic data capture systems used in the management of supply chain process Ą electronic freight sorting systems that use bar-coding and scanning technology. 8 Interpretation of the ABS Employer Training Expenditure and Practices survey should take into consideration the number of employers providing structured training. Within the transport and storage industry 17% of employers provided structure training compared with 41% across all industries. The increasingly sophisticated technological environment is also driving industry consolidation and partnerships as businesses combine to attain the critical mass needed to cost effectively operate integrated systems. One of the major issues for the transport and logistics industry is the lack of standard, consistent IT systems for use within the industry. The industry itself is fragmented and involves thousands of providers working at different service levels and often using IT systems that are custom built for their organisation. Supply chain technologies and business-to-business e-commerce are impacting upon enterprises of all sizes. While many companies have introduced business-to- business e-commerce and business-to-customer e-commerce, some SMEs are under pressure to use a variety of IT systems and platforms to meet the needs of larger companies with whom they have relationships. Many SMEs are dealing with up to 4 or 5 different systems and so need to find efficiencies within their own businesses. The fragmentation of the IT systems means that they do not normally comply with or support any open source messaging standard that could facilitate inter-operability. The lack of a common standard is fast becoming a major issue for the transport and logistics industry. Implications for the Skills Base It is clear that the nature of the industry and the required skill sets of employees are changing with increasingly sophisticated freight management systems, more complex road transport and freight vehicles and the increased sophistication of information networks. The quantum of technical and technology change of the past decade will be sustained into the future, and consequently the ability to interact positively with changing requirements is in itself a vital skill. The increasing use of technology is impacting on the skills base of the transport and logistics workforce, from operational levels to the highest levels of management, in several ways. The entire spectrum of the industry workforce is increasingly expected to have core information and communication technology skills, as well as specific skills in new technologies as they are introduced. Core information and communication technology skills require: Ą familiarity with the use of technology Ą appropriate literacy/numeracy skills Ą physical dexterity for the use of handheld units Ą attitudes that support the adoption of new technologies Ą awareness of the implications of their individual activities on the system. Increases in management training from the supervisor level upwards are required to meet the demands of more sophisticated systems and capabilities. The development and renewal of the skills of trainers is also needed to ensure that they have sufficient capability and depth to train and assess competencies in technology areas. The introduction of new technologies can be a particular challenge for SMEs that may not have the resources to upgrade their own technologies or to provide the necessary training to their employees, including capability to release/replace staff for training. Strategies Strategic initiatives in this area include: Ą develop means of making the technologies referred to in current units of competence within the Transport and Distribution, Maritime and Aviation Training Packages explicit and visible for all stakeholders. Ą working with companies and other industry bodies to improve communication, literacy/numeracy, interpersonal communication skills, change management skills and IT skills for all employees. Ą developing strategic information channels to access and disseminate information about available training and developments in the area of new technologies in each industry sector. Ą collating and promoting case studies of best practice training that can assist with the implementation and efficient use of new technologies. Ą developing Communities of Practice and Networks to manage the knowledge needed to implement technology training and assessment. Ą establishing relationships with technology suppliers to bring news of innovations and events to the industry. Ą developing self-evaluation tools for RTOs to assess their capability to train the workforce in new technologies. Globalisation Within the next 10 years, globalisation will compel the major enterprises in the local freight industry to develop strategic alliances with internationally based freight service providers or face marginalisation. Globalisation is viewed by many as primarily an economic phenomenon, involving the increasing interaction or integration of national economic systems through the growth of international trade, investment and capital flow. As part of this phenomenon, however, there is a rapid increase in cross-border social, cultural and technological exchange, all of which are impacting significantly upon the industry.l There is an increasing need to provide services to customers that involve the seamless movement of goods and people across international boundaries. This need is driving the increased integration of enterprises across national boundaries and the growth of multinationals and strategic alliances (in sea freight, aviation etc). Aligned to this are pressures for the industry to match or better world best practice to ensure that it is competitive in the international market. Australia's economic growth involves both international and domestic freight movements. All international trade is carried either by sea or air transport, but these in turn often involve a domestic and land transport component. Maritime transport carries over 99 per cent of total import and export trade in goods by volume. In 2002-03 these totalled over 596 million tonnes. Although the air transport component is small in volume, it constitutes approximately 26 per cent of the value of the total trade in goods. li Australian-based firms trying to grow their export markets or respond to greater international competition have placed a greater emphasis on their logistics arrangements to improve products quality, increase responsiveness to market requirements and reduce costs.lii Implications for the Skills Base The trend towards globalisation is placing increasing demands on the skills base in the transport and logistics industry. Consequently, the skills base must continue to develop to world best standards to support the delivery of world's best practice in Transport and Logistic services. This will ensure that the industry can be internationally competitive as Australian industry increasingly competes on a global and regional basis. The increased demand for the use of internationally recognised qualifications has resulted in employees with internationally accepted qualifications becoming mobile across international boundaries - both coming to Australia and going overseas. Depending on the direction of the movements, either creating or resolving skill shortages in the industry. More particularly, there is a need to develop the industry skills, including logistics and supply chain management, necessary to operate within international transport and distribution systems. Qualifications (and hence skills) need to be developed to standards that are capable of international recognition. Globalisation and the need to maintain international competitiveness impacts on the training required to underpin technological advances and other changes in processes to maintain productivity growth. Strategies Skills need to be developed to deal with cross boarder exchanges. The following strategies can assist in developing these skills. Ą Competencies, such as managing diversity and working within a socially diverse environment, should also be further embedded into current training. Ą Current Australian qualifications need to be assessed against international standards to identify gaps. Ą Developing high level skills in supply chain management and logistics management is essential to working within the current global environment. Ą The transport and logistics industry needs to recognise the value of languages other than English. Promoting the value of language skills within the aviation, maritime and logistics sectors, and for currently enrolled VET students is essential. Regulatory compliance The transport and logistics industry is subject to a broad range of national and state regulations and policies. The nature of the transport task means that the regulatory arrangements applying in many other industries can also impact. There are moves by all Australian jurisdictions for more efficient and effective regulation with the removal of regulations that are anti competitive. The transport and logistics industry is subject to a broad range of national and state regulations and policies. The nature of the transport task also means that the regulatory arrangements applying in many other industries can also impact. Changing regulatory requirements and the tendency of governments to increase or strengthen their regulation of business activities is an on-going trend in all industries. This is unlikely to change as governments at all levels seek to achieve social, economic and environmental goals. However, this trend is balanced by moves by all Australian jurisdictions for more efficient and effective regulation and the removal of regulations that are anti-competitive. Regulation and policy are impacting on the transport and logistics industry and will continue to do so into the future. In some cases regulation is being enhanced for example the "chain of responsibility" principles through the Road Transport Reform Bill. At the other extreme, there are moves to reduce prescriptive regulations by moving towards a performance orientated regulation that allows industry more flexibility in how it achieves regulatory standards by involving an active focus on risk management by firms, rather than a reliance on compliance with "black letter law". AusLink the Australian Government's national future transport plan, is designed to achieve better national land transport planning, funding and investment decision making. AusLink has the following core components: Ą a defined national network of important road and rail infrastructure links and their intermodal connections Ą the national land transport plan which outlines the Government's approach to improving the integrating the national network, and the investments it will make Ą a single funding regime Ą separately earmarked funding for local and regional transport improvements Ą new legislation, intergovernmental and institutional mechanisms.liii While these issues are initially dealing with transport infrastructure, they cannot be ignored by the transport and logistics industry. The importance of regulatory compliance is also reflected in the 60.4 percent of those employers providing structured training in the industry, who provided the reasons for doing so as legislative, regulatory or licensing requirements. This level is well above the 38.1 percent average recorded, across all industry. liv9 9 Interpretation of the ABS Employer Training Expenditure and Practices survey should take into consideration the number of employers providing structured training. Within the transport and storage industry 17% of employers provided structure training compared with 41% across all industries. Each sector of the transport and logistics industry has a different level and type of regulation, as follows: lv Transport Sector Level of Notes regulation Road Road freight Low Self-regulation common industry feature Long distance bus Low Self-regulate, under supervision of National Transport Commission Short distance bus High Level of regulation decreasing Taxi / hire vehicles High Regulations include type of vehicle, eligibility of driver or owner to receive a licence, number and location of taxis, fare charged and number of taxi licences Toll roads High Rail High State accreditation required for prospective train operators Maritime Coastal water Moderate Must comply with the NSCV and OHS Inland water High State Marine Boards are responsible for licensing vessels Terminals High Terminals need to meet environmental regulations and have state approval / licences to operate Services High State Marine Authorities provide pilot and towage operators licenses Aviation International High International Air Service Commission established to allocate capacity rights on international routes Domestic Moderate Victoria and South Australia operate under "open skies" policy, while other states control intrastate operations Non scheduled High Subject to state/territory/ Commonwealth Government regulations Services High Regulated by Air Services Australia Stevedoring Low No specific regulations Port Authorities Moderate Regulated by Commonwealth, state and port authority laws Warehousing Moderate Depending on goods stored regulated by licensing laws Logistics Low Inconsistencies between the states and territories in transport regulations and road rules and road transport law have also been cited as an impediment to high quality training as well as safer transport. The industry should continue to press for the removal of interstate inconsistencies to deliver national uniformitylvi. Implications for the skills base The quantum of regulatory, technical and other changes of the past decade will be sustained into the future, and consequently the ability to interact positively with changing requirements is in itself a vital skill. These factors combined are having the effect of emphasising to employers the need for a multiskilled, formally qualified workforce. The Australian Government has undertaken a commitment to put all appropriate government regulation services online. Individual employees at all levels require the appropriate technology skills to access the information. Such skills will include familiarity with the use of the technology as well as the appropriate literacy/numeracy skills to interpret the information provided online by the government regulatory bodies. Strategies New and increasing legislation and policy changes means that: Ą industry skills need to be upgraded to meet new regulatory requirements, specifically to: - ensure firms and employees can directly comply with requirements of the relevant regulatory regimes - deal with the requirements of various auditing procedures and compliance enforcement processes - ensure compliance with various industry accreditation scheme requirements Ą priority needs to be given to national consistency and quality in the application and interpretation of Training Packages and AQTF in the areas of high risk and safety Ą continued efforts are required to ensure consistency between regulatory and occupational licensing requirements, and competence standards within Training Packages Ą increased collaboration with e-government bodies is needed to improve industry capacity to access information online is required Ą an information strategy for TDT is required to link RTOs with regulatory bodies Ą continued professional development is required for RTOs. Insurance The high risk nature of the transport and logistics industry is leading to a range of issues involving both the mature aged and youth spectrum of the industry. These two factors together with the pressure of a wide range of health and community safety issues are a driver for training. Australia's size and isolation causes us to rely on transportation and logistics. With pressure from customers for lower costs, better quality services and an increasing reluctance to allow transportation and logistics operators to waive their liability, effective risk and insurance programs are now more important than ever. Road, rail, sea and air freight, coupled with warehousing and logistics which are often managed on a just in time basis, all present different risk and insurance challenges. Some of the risks that need to be considered are: Ą injury to passengers Ą injury to other third parties Ą third party property damage Ą loss or damage to freight Ą contractual liability, including late delivery of freight Ą pollution from underground storage tanks, warehouses or the transportation vehicle Ą clean up costs following damage to freight Ą business interruption Ą workers' compensationlvii. As the transport and logistics industry had the third highest rate of industrial accidents across all industries, a major impact of insurance in the industry is related to OH&S issues. Companies are also aware of their legal liability regarding their duty of care and the impact of negligence upon their insurance premiums. A major hurdle to overcome specifically in the road freight transport industry is insurance excess requirements for drivers under 25 and the license restrictions on them. Aviation Airlines are battling a 600 per cent rise in insurance costs since September 11 2001, following the withdrawal of third party cover for terrorism and war by insurers. While governments have provided temporary help, the global aviation industry faces uncertainty because cover can be cancelled with seven days notice, which would force airlines to ground their fleets. The industry is exploring long-term solutions. The International Civil Aviation Organisation has proposed a mutual not-for-profit fund financed by airlines to provide up to $1 billion in cover per incident and has proposed that governments compensate their airlines above that amount. lviii Testing Psychometric testing is not compulsory, although many insurance companies strongly recommend the use of such testing. As a result, many transport companies are turning to psychometric testing to determine whether recruits are psychologically ready for work in their company. One of many issues involves what companies do with the information obtained through such tests. Privacy laws and discrimination laws impact upon the storage and retrieval of such data. Another issue is that when experiencing difficulty in recruiting drivers, for example, some companies are ignoring any such testing (including medical testing) and happy to take on anyone that is available to be able to get the job done. Such are the conflicting pressures on the industry. Implications for the skills base Stricter risk management approaches by insurance companies, supported with significant increase in insurance premiums, are placing pressure on the transport and logistics industry to take steps to reduce risks and thereby increase safety within the industry. As a result, in order to receive reductions in insurance premiums firms are increasingly required to implement OH&S plans, risk management strategies and to engage in safety training. The introduction of requirements for psychometric testing by insurance companies is placing additional recruitment pressures on the industry. This indirectly impacts on the industry's skills base as some skilled workers are not entering or re-entering the industry due to psychometric tests, thus applying greater pressures on current skilled workers and creating additional pressure on areas of current skill shortages particularly in road transport. Strategies Many of the strategies for dealing the insurance issues within the transport and logistics industry are the same as those for health and safety issues. One additional strategy relates to the emerging trend of psychometric testing. Debate needs to be encouraged within the industry around the value of psychometric testing and its most effective use within the industry. E-business The transport and logistics industry is a high consumer of technology at every stage of its operations. Importantly, the use of e-business approaches are pivotal in supporting developments in logistics and supply chain management. E-business can mean conducting business electronically, both within the company with employees and externally with customers, clients and partners. E-business involves using technology to redesign business processes as well as to make use of information and networking technologies. Technology does not necessarily change business goals, but rather enhances goals by improving efficiencies, reducing costs, enhancing business partnerships, expanding business markets, increasing the speed of transactions and value adding for clients. The factors driving e-business include: Ą the availability of global communication networks Ą the development of internal supply chain efficiencies Ą the emergence of new business models to take advantage of the new technology and to cut costs out of the supply chain Ą the desire of governments and businesses to provide enhanced services for customers.lix Transport and logistics businesses in Australia are developing technology strategies which form a part of their business strategies and which address three main areas: Ą commercial transactions Ą business management Ą service delivery, including moving and monitoring goods and passengers. Computer usage in the transport and logistics industry is on par with the average across all industry. However, web presences, and the use of the internet to place or receive orders is not as pronounced as the average across all industry. Business use of Information Technology 2002-03 % Computer % Internet % Web % Placed orders % Received use use presence via Internet orders via internet Transport and Storage 82 67 20 23 12 All Industry average 83 71 23 28 13 Source: ABS Business Use of Information Technology 2002-03 Cat. No. 8129.0. While many transport and logistics companies in Australia have adopted e-business strategies as the main method of conducting their business, others have been reluctant to do so. In relation to the technologies for the delivery of services, the 1999 National Office of the Information Economy study 'Trucks Online' identified the following issues relating to the uptake of technology for the road freight sector. They include: Ą lack of understanding of the benefits offered by modern technologies, including that greater use of technology will facilitate the increased complexity of supply chains and logistics options and offer opportunities to reduce negative externalities such as noise levels and emissions. Ą a perceived lack of demand by customers. Ą the use of propriety systems by stakeholders who quite often compete aggressively for market share and who perceive that sharing information regarding e-business will negatively affect their market advantage. Ą perceived costs of implementing an e-business system when migrating from paper-based workflows to an automated operation. While the study referred to above was undertaken in 1999 these issues appear to be still applicable for some SME, particularly contract drivers and owner-drivers. Implications for the skills base There is a developing awareness by some of the smaller companies in the industry of the need to get on the e-business bandwagon, just to stay in business and not be wiped out of the marketplace altogether. Implementing e-business technology relies on change management skills to ensure that changes are implemented effectively and efficiently. The change management process depends upon the capability of management to manage the installation of the new technology, to change the system procedures and train and support the users of the technology. To be successful, an enterprise must manage all three concurrently as each area is interlinked. Strategies A range of strategies to support the industry further adopt e-business technologies and work practices include: Ą developing strategies to assist SMEs and owner operators to identify appropriate training for themselves and their employees Ą providing professional development programs for company owners/heads regarding the benefits of e-business Ą promoting e-business strategies by TDT Australia to the industry Ą identifying and packaging good practice models of e-business that can be picked up broadly in the wider industry. Employment Arrangements The development of technology and business skills in an industry that is dominated by a growing trend towards outsourcing and contract employment, is an imperative in the development of a more dynamic and responsive workforce. Persons employed in the transport and logistics industry tend to work long hours and had the third highest average weekly hours worked in 2000-01. The average annual rate of growth of hours worked from 1992-93 to 2000-01 for the transport and logistics industry was 2.3 percent, slightly above the average across all industries of 2.1 percent.lx The transport and logistics industry had a high proportion of employees working full-time (83.7 percent) in August 2003. This level compared with an average of 70.3 percent across all industry. The transport and logistics industry employs fewer casuals than does industry overall, 14.6 percent of the workforce is employed on a casual basis, compared with 20 percent across all industries.lxi While the number of casual employment appears to be small for this industry, it is an important aspect of the industry. The vast majority of casual employment is tied to trends within the individual transport and logistics sectors. For example, a waterside worker, particularly in smaller regional ports, will only be required to work in the industry when the ship is in port. Such workers will move to work in industry areas in the interim. Evidence of the importance of employment arrangements as a driver of skills needs in the industry is provided in the ABS Employer Training Expenditure and Practices Survey. Developing and maintaining a flexible and responsive workforce was the reason for providing structured training in 2001-02 for 38 percent of employers providing structured training in the transport and logistics industry compared with the average across all industries of 35 percent.lxii The trend toward out-sourcing by the ancillary transport sector10 is continuing, resulting in a larger hire & reward sector. The road freight sector as a whole should benefit from this trend to specialisation. lxiii The trend towards contract employees and owner-drivers in the road transport industry is also continuing. The forwarding sector, which operators tend to deal with as subcontractors, has a small number of firms dominating the business. Extreme competitive pressures are exerted on the unprotected and poorly represented owner-drivers. Rates accepted by the owner-drivers have declined as a consequence. Margins in this sector are very low and, to be successful, an operator must control costs very carefully. The major reasons for financial failures are: lack of sufficient initial capital; lack of business skills; inappropriate choice of vehicle (often a vehicle which is over-specified and needlessly expensive); commitment to purchase a vehicle undertaken before obtaining assurance of work; inability to absorb one-off losses; failure of consignors to pay for work done; and family problems. Implications for the skills base Contract employees and/or owner drivers could, potentially, be disadvantaged due to the cost of implementing new technologies and the limited access to both professional development in identifying appropriate options and training once the technology has been purchased. As mentioned above, one of the major reasons for failure of owner-driver and contract employees is the lack of suitable business skills. Employees in this category are often responding to issues and incidents in a reactive manner and there is little time or consideration given to the proactive notion of training in business skills to assist the development of those skills. Strategies A range of strategies are suggested to assist in developing employability skills for casual workers and assist owner-drivers and contractors, including: Ą developing a communication strategy targeted at SMEs and implemented through the state and territory industry advisory networks to assist owner-driver and contractors in taking up new technology. Ą promoting business skills competencies to owner-drivers and contractors. 10 Ancillary operations involve the carriage of freight by vehicles owned by firms whose main business is normally non-transport related. Hire and reward operations involve the carriage of freight for another firm on a contractual basis. Vocational education and training trends Vocational education and training is 'education and training for work'. It exists to develop and recognise the competencies or skills of learners. The Australian VET system is recognised as among the most sophisticated in the world because it is an industry led national system that is client focused. The transport and logistics industry is one that has moved from an industry that has not had a high level of training and skills to one where skills and knowledge are viewed as an essential driver of economic success and competitiveness and underpin industry career paths. Qualification profile of the industry The transport and logistics industry has a lower proportion of its workforce in possession of post-school qualifications than does industry overall. This situation is demonstrated in the following figure. However, the transport and logistics industry has a stronger representation of workers with skilled vocational qualifications, which evidences the industry's connection with VET. Participation in training The number of VET students studying transport and logistics related courses increased strongly over the period from 1998 - 2003. These figures represent data on publicly funded training activity only, that includes training under Training Packages and other registered courses. The continued growth in training supports the anecdotal comments that the industry is recognising the importance of training and skill development. Students by industry of course, 1998 to 2003 1998 1999 2000 2001 2002 2003 Change from 1998 to 2003 Average annual change from 1998 to 2003 no. no. no. no. no. no. % % Transport & storage 27,956 32,170 35,224 41,343 43,202 44,344 58.6 9.7 All industries 1,514,167 1,619,740 1,713,358 1,684,498 1,690,139 1,717,795 13.4 2.6 Source: NCVER Provider collection - publicly funded activity. Training activity completed under Training Packages The figures below show the take up of training under Training Packages has expanded by around 31 percent since 2001. These figures represent training that has been publicly funded and does not cover enrolments by private providers or enterprise RTOs that may have provided fee for service training or trained staff in house. It is important to note that growth under Training Packages is associated with the progressive implementation of Training Packages. The Transport and Distribution Training Package was reviewed and re-endorsed in 2002. The Maritime Training Package was endorsed in 2001, these dates are reflected in the statistics. The Aviation Training Package was endorsed in 2003, implementation is now occurring and has not had time to be reflected in the statistics. Enrolments in main qualifications under Training Packages, 2001 to 2003, transport and logistics Publicly-funded training 2001 2002 2003 TDM20101-Certificate II in Transport and Distribution (Maritime Operations) 0 533 2,212 TDT10102-Certificate I in Transport and Distribution (Warehousing & Storage) 0 0 1,104 TDT10202-Certificate I in Transport and Distribution (Road Transport) 0 18 2,537 TDT20102-Certificate II in Transport and Distribution (Warehousing & Storage) 0 0 3,103 TDT20197-Certificate II in Transport and Distribution (Warehousing) 4,821 4,858 2,447 TDT20202-Certificate II in Transport and Distribution (Road Transport) 0 112 5,905 TDT20297-Certificate II in Transport and Distribution (Road Transport) 7,009 5,685 1,482 TDT30102-Certificate III in Transport and Distribution (Warehousing & Storage) 0 202 3,101 TDT30197-Certificate III in Transport and Distribution (Warehousing) 6,277 7,252 3,731 TDT30202-Certificate III in Transport and Distribution (Road Transport) 0 155 5,852 TDT30297-Certificate III in Transport and Distribution (Road Transport) 8,435 8,026 2,858 TDT30702-Certificate III in Transport and Distribution (Rail Infrastructure) 0 0 1,669 Total all transport and logistics qualifications 32,495 34,028 42,476 Source: NCVER. Apprentices and trainees The number of apprentices and trainees in training in the transport and storage industries increased in recent years from 18,800 in 2000 to 27,900 in 2003. To some extent this trend is consistent with the overall expansion in apprentices and trainee numbers in recent years. Almost all of the growth in apprentice and trainee numbers in the industry was due to expansion in the uptake of these arrangements by existing workers. Existing workers now account for more than half (58 percent) of the total of apprentices and trainees in the industry. The overwhelming majority of apprentices and trainees in the industry are at the Certificate III level, comprising 88 percent of apprentices and trainees in 2003, as shown in the table below. Apprentice and Trainee New Commencements and in-Training, transport and logistics, Training Packages and Main Qualifications, 2001 to 2003 Commencements In-Training at for Year End of Year 2001 2002 2003 2001 2002 2003 Transport & Distribution Training Package 21,960 27,290 26,220 34,250 38,860 40,620 TDT20102-Certificate II in Transport and Distribution (Warehousing & Storage) (a) 210 1,220 (a) 200 960 TDT20197-Certificate II in Transport and Distribution (Warehousing) 1,610 1,830 250 1,310 1,460 310 TDT30102-Certificate III in Transport and Distribution (Warehousing & Storage) 40 800 10,120 40 830 9,100 TDT30197-Certificate III in Transport and Distribution (Warehousing) 9,100 9,110 1,470 13,230 13,990 6,870 TDT30202-Certificate III in Transport and Distribution (Road Transport) 40 1,690 7,650 40 1,740 8,230 TDT30297-Certificate III in Transport and Distribution (Road Transport) 8,160 10,640 1,210 15,110 15,630 8,770 TDT30702-Certificate III in Transport and Distribution (Rail Infrastructure) 0 130 1,220 0 140 1,260 Maritime Training Package 0 40 80 0 40 80 Qantas Training Package 140 50 10 130 170 60 Qld Rail Training Package 0 0 0 0 0 0 P&O Training Package 0 0 0 0 0 0 Aviation Training Package 0 0 0 0 0 0 Total transport and logistics 22,090 27,380 26,310 34,380 39,060 40,760 (a) between 1 and 9 - not published for confidentiality reasons. Source: NCVER. Employer training expenditure As can be seen in the figure below (left-hand side), in 2001-02, employers in the transport and logistics industry spent, on average, less than the average amount on training per employee across all employers. As not all employers across industry spent on training for their workforces, the figures for expenditure per employee is different when only employers providing training are considered (right-hand side). The transport and logistics industry had a slightly higher than average expenditure per employee than the average across all of the industries. Appendix A Transport and logistics qualifications Appendix B Reference List i Department of Transport and Regional Services, May 2004, Australian Transport Stats. ii IBIS World, 2004 I Transport and Storage in Australia. iii Monash Centre for Policy Studies, August 2004,Labour Market Forecast. iv Department of Transport and Regional Services, May 2004, Australian Transport Stats. v Australian Trucking Association, August 2003, Driving Australia's Future: A Report and Action Plan Addressing the Skills Needs of the Road Freight Transport Industry. vi Department of Transport and Regional Services, 2004, Auslink White Paper. vii Department of Transport and Regional Services, 2004, Auslink White Paper. viii Monash Centre for Policy Studies, August 2004, Labour Market Forecast. ix Department of Transport and Regional Services, May 2004, Australian Transport Stats. x Austrade, Railway capability overview. xi Monash Centre for Policy Studies, August 2004, Labour Market Forecast. xii Australian Bureau of Statistics, 2001, Year Book Australia. xiii Department of Transport and Regional Services, 2004, AUSLINK White Paper. xiv Monash Centre for Policy Studies, August 2004, Labour Market Forecast. xv Aviation Australia, Aviation Industry overview in Australia and the Asia Pacific. xvi Australian Logistics Council, 2002, Freight Logistics in Australia an agenda for action. xvii Australian Logistics Council; 2002, Freight Logistics in Australia an Agenda for Action. xviii Monash Centre for Policy Studies, August 2004, Labour Market Forecast. xix Monash Centre for Policy Studies, August 2004, Labour Market Forecast. xx ABS Labour Force Catalogue (ABS Cat 6203.0), Unpublished Data. xxi ABS, August 2003, Employee Earnings, Benefits and Trade Union Membership, (6310.0). xxii Monash Centre of Policy Studies, August 2004, Labour Market Forecast. xxiii Australian Trucking Association, August 2003, Driving Australia's Future: A Report and Action Plan Addressing the Skills Needs of the Road Freight Transport Industry. xxiv Bureau of Transport and Regional Economics, 2003, An overview of the Australian road transport industry. xxv Monash Centre of Policy Studies, August 2004, Labour Market Forecast. xxvi IBISWorld Pty Ltd, 2004, 16402 - Scheduled Domestic Air Transport in Australia. xxvii IBIS WORLD Pty Ltd, 2004, I Transport and Storage in Australia. xxviii Department of Transport and Regional Services, 2002, Freight Logistics in Australia, An Agenda for Action. xxix IBIS WORLD Pty Ltd, 2004, I Transport and Storage in Australia. xxx IBIS WORLD Pty Ltd, 2004, I Transport and Storage in Australia. xxxi IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xxxii IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xxxiii Bureau of Transport and Regional Economics, Working paper 60, An overview of the Australian road Freight Transport Industry. xxxiv ABS Year Book Australia, 2003: Industry Overview - Changes in labour productivity - Source: Australian System of National Accounts, 2000-01 (5204.0). xxxv IBIS WORLD Pty Ltd, 2004, I Transport and Storage in Australia. xxxvi IBIS WORLD Pty Ltd, 2004, I Transport and Storage in Australia. xxxvii Bureau of Transport and Regional Economics, 2003, An overview of the Australian road transport industry. xxxviii IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xxxix IBIS World Pty Ltd, 2004, 16402 Scheduled Domestic Air Transport in Australia. xl IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xli IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xlii IBIS World Pty Ltd, 2004 16401 Schedules International Air Transport in Australia. xliii Productivity Commission 2003, International Benchmarking of Container stevedoring, Commission Research Paper. xliv Department of Transport and Regional Services, 2002, Freight Logistics in Australia. xlv Department of Transport and Regional Services, 2004, Auslink White Paper. xlvi National Occupational Health and Safety Commission, December 2002,Compendium of Workers' Compensation Statistics Australia 2000-2001. xlvii Department of Transport and Regional Services, 2004, Auslink White Paper. xlviii Department of Transport and Regional Services, 2004, Auslink White Paper. xlix ABS, 2001-02, Training Expenditure and Practices Survey, Australia, Unpublished tables. l www.globalisationguide.org li Department of Transport and Regional Services, 2004, Auslink White Paper. lii Department of Transport and Regional Services, 2004, AusLink White Paper. liii Department of Transport and Regional Services, 2004, AusLink White Paper. liv ABS, 2001-02, Training Expenditure and Practices Survey, Australia, Unpublished tables lv IBIS World Pty Ltd, 2004, I Transport and Storage in Australia. lvi Australian Trucking Association, August 2003, Driving Australia's Future: A Report and Action Plan Addressing the Skills Needs of the Road Freight Transport Industry. lvii Marsh Australia, Transportation and Logistics, www.marsh.cm.au/Industries/transport.htm lviii IBISWorld Pty Ltd, 2004, 16401 Scheduled International Air Transport in Australia. lix National Office of the Information Economy, E-Business in Education. lx ABS, Year Book Australia - Changes in hours worked by industry. lxi ABS, November 2001, Forms of Employment (6359.0.). lxii ABS, 2001-02 Training Expenditure and Practices Survey, Australia, Unpublished tables lxiii Bureau of Transport and Regional Economics, 2003, An overview of the Australian road transport industry.