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NOW UPDATED FOR 2006!
The most recent benchmarking data for Road Transport Operators is now available, both in print and in downloadable PDF format, with your purchase of the Road Transport Operators Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Road Transport Operators for the financial years up to June 30, 2004. The survey was based on 52 businesses.
This is a sector that has spent much time under the microscope in recent times. This broad sector finds pressure-points coming from many directions:
- It's extensively regulated, monitored and policed to maintain and enhance the skills and safety of drivers
- It's dominated by a few very large freight companies which supplement their own fleet of vehicles with extensive sub-contracting to independent operators
- Competition is tight, margins are generally low and many of the costs relatively fixed. This makes for a tough set of financial arrangements that need to be balanced carefully.
So the financial structure of the business is very important, as is the accuracy of pricing and quoting. Keeping the vehicles productive and reliable is just as important an issue as keeping the drivers productive and reliable. Use this guide to navigate your way through the maze of financial and operational decisions needed to keep the business rolling along smoothly.
Survey Results
These are the results of a survey of road transport operators. These results should not be considered to be representative of all road transport operators in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the road transport operators in our survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Businesses from large regional cities and towns (population over 20,000) represented 45% of the entire group, with another 36% of businesses coming from rural areas (population under 20,000). The rest were city-based businesses.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 6 th highest and 6 th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Vehicle Related Costs | 47.09% | 26.12% | 64.59% | | Sub Contractors | 8.26% | 0.00% | 27.41% | | Wages & Salaries (staff only, not
owners) | 14.78% | 0.00% | 30.18% | | Materials and Loading Fees | 1.19% | 0.00% | 1.05% | | Net Profit (bos)* | 16.59% | 0.93% | 40.13% | | Freight Carrying Vehicles | 4.04 | 1 | 8 | | Drivers (including Working Owners) per Freight
Carrying Vehicle | 1.18 | 1.00 | 1.50 | | Average Kilometres Travelled per Vehicle per
Week | 3,428 | 2,000 | 4,500 | | Average Distance Travelled per Hour (kms) | 66 | 48 | 84 | | Average Distance Travelled per Day (kms) | 656 | 400 | 938 |
*(bos) before owners' salaries
and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Insurance - Non Vehicle of up to 5.56%;
- Interest, Bank Charges etc of up to 6.86%;
- All Occupancy Costs of up to 7.98%;
- Repairs & Maintenance of up to 3.21%;
- Staff On-Costs of up to 7.43%;
- Travel and Accommodation of up to 5.32%; and
- All Other Expenses of up to 5.19%.
To summarise this, larger businesses had:
- Steadily higher reliance on sub-contractors;
- Higher levels of revenue per vehicle and per kilometre travelled;
- Higher net profits per owner work-hour, in spite of a declining net profit margin and apos;moreapos; hours being worked by owners.
The more profitable businesses:
- Were larger, on average;
- Had higher net profit margins;
- Had relatively lower operating costs, especially for the vehicle-related costs;
- Generated more revenue per vehicle, in part from working vehicles more intensively;
- Had relatively more employees and relatively fewer owners;
- Relied more on the use of sub contractors.
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