There are never ‘winners’ in a global pandemic. The true heroes are the frontline medical staff and the only people that can be claimed as ‘victors’ are those who emerge in good health from the intensive care units.
But in relation to business, clear distinctions are beginning to emerge between industries and individual businesses that will survive this crisis and those that not only closed during the crisis but will be unlikely to reopen. Of those that do reopen, it is debatable as to how easy the recovery process will be.
Jade Truck Loans - Open For Business
A number of standouts on the positive scenario are sectors of the trucking and transport industry. A lot of whom are our Jade Truck Loans customers. We’re pleased to report that at Jade Truck Loans it’s pretty much ‘business as usual’ as well.
We reflect on how areas of the trucking sector are travelling through COVID-19 and Truck operators have unfortunately been tagged with a bad rep due to the unacceptable behaviour of a few rogue operators over the years. For a change, the sinner is now seen as the saviour. The essential link connecting consumers with their supply chain.
Transport Industry Essential Supply
The transport industry, particularly those involved in truck refinancing, is being hailed for its exceptional work in keeping the country supplied throughout the COVID-19 crisis. With many airline services reduced, more freight has had to be moved by road. Panic buying led to shortages in supermarkets, thereby increasing demands on transport operators to rapidly move stock from warehouses to stores. Essential supplies, especially PPE, needed to reach medical facilities, while food and other items had to be delivered directly to vulnerable community members.
With stay at home orders across all states, more consumers turned to online shopping which meant more parcels to be delivered – by truck. Many businesses were forced to close their bricks and mortar outlets and pivoted to direct deliveries – more work for our trucks and more businesses renting or buying their own delivery trucks or contracting owner-drivers to provide this service.
Where possible, construction projects have been ramped up to support a flagging economy with more work for truck operators in that sector.
Having been under pressure for a very long time with demanding customer schedules, escalating fuel prices and increasing regulation and weighed down by criticism, finally the trucking and transport sector was having its day in the sun. More work and greater appreciation. Even many local councils eased road restrictions to allow overnight deliveries in residential areas.
Is this just a momentary spike in business? Will the income curve flatten along the lines of the COVID-19 curve? Or will these higher levels of work and income be sustained for a longer term?
Opportunities around the corner and down the road.
Transport Opportunities In This Current Climate
The opportunities created by the coronavirus crisis have allowed some operators to make-up and catch-up on some tough times over previous years with many seeking to expand their fleet to cater for the surge in business.
For those looking to expand and purchase new trucks, the Government stimulus packages included a number of measures which may be of benefit. In particular the Instant Asset Write-Off (IAWO).
The Federal Government has increased the IAWO from a threshold of $30,000 to $100,000 till 30 June 2021 for businesses with annual turnover of less than $500 million at 30 June 2020. Trucks are included as eligible assets if they come under the Division 40 of the Taxation Act. As with all accounting measures, we advise our customers to consult with their accountant for professional advice on whether this is suited to their business structure.
If so, we can provide you with a quote on Truck Chattel Mortgage or Truck CHP to take advantage of IAWO on your new truck purchase.
And it probably doesn’t need mentioning but we will anyway – interest rates are at historic lows and are probably set to stay low through the recovery stages at least.
It remains to be seen if the surge in delivery services will be sustained. The March quarter retail sales figures showed the increase in consumer sales was driven largely by people panic-buying and hoarding essential items such as toilet paper, flour, rice and pasta. The major supermarkets are now reporting this buying behaviour has eased and people are returning to their normal shopping behaviour.
Supermarkets Opening Up Delivery Services
But the supermarkets and other retailers, are continuing to ramp up their delivery services. As more and more households have turned to online shopping and home deliveries, it may be that they appreciate the convenience and this will become more the norm than the exception. Good news for general delivery trucking companies.
In their plans for the economic recovery stage of COVID-19 several governments have flagged construction as a major driver of economic activity. In particular major infrastructure projects. This is a good sign for truck owners in that sector.
In more good news for some sectors of the transport industry, the slowdown in global economies has led to an oversupply of oil and a slump in oil prices. The Federal Government has announced a $94 million investment in oil stockpiling to shore up Australian supplies.
If all that news gives you greater optimism to purchase a new truck, then give us a call to discuss finance. Before, during and after the coronavirus crisis we are business as usual to service the finance needs of the trucking and transport industry.
To discuss your truck loans options, contact us on 1300 000 003 to speak with a Jade Truck Loans consultant.
DISCLAIMER:THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.
