2018 INTERNATIONAL FREIGHT FORWARDING & CUSTOMS BROKING

SNAPSHOT

The Front-Line Group comprises industry specialists Front-Line Resources Management and myfreightcareer. Front-Line Resources Management is a recruitment company specialising in the global logistics industry while myfreightcareer, through their traineeship program, has launched the careers of over 2000 new entrants to the industry.

On the recruitment front we are receiving mixed messages from industry. On one hand we have an oversupply of quality executive managers, with limited opportunities at the senior level of the industry. Conversely, we have been inundated with job orders for operational staff and a limited number of available candidates to fill those roles. On top of that Employers are in a buoyant mood and very positive about 2018/19. Possibly the consolidation that we are seeing at a Senior Management level in preparation for an improved 2018/19 is causing operational staff to bunker down rather than seeking a new challenge. As a result we are seeing an ever increasing interest in training and our traineeship program to recruit “entry level” candidates to add to the industry for future succession planning.

Things could not be more positive on the training front. There is an emphasis in the media on alternatives to University study and high on the list is Vocational Training. As well as increased interest in our traineeships, we have noted a marked increase in enquiries from Employers wishing to upskill their existing workers.

We see 2019 as a year overflowing with opportunity.

Welcome to the second International Freight Forwarding & Customs Broking industry snapshot released by HLB Mann Judd in conjunction with The Australian Federation of International Forwarders and The Front-Line Group.

The key objectives of this snapshot are to:

• inform local business on the performance of the industry as a whole over the last twelve months;

• provide a benchmark of useful information to compare the performance of your organisation against that of other organisations in the industry; and

• present our thoughts on the direction of the industry for the next twelve months.

The information contained within this snapshot has been gathered from a significant sample of organisations across Australia.

Some of the key highlights in our survey and our experience include the following:

• Even though succession planning continues to be an issue in the industry, of the respondents who are contemplating retirement or selling their business, an alarming 72% have not yet started a plan for an eventual sale or transition of their business;

• Accuracy surrounding financial information is a concern for business owners and decision makers. Respondents who are not comfortable on relying on the financial information have noted two main reasons why they cannot rely on the information:

- the financial team not possessing the appropriate experience or

- being unable to verify the accuracy of the data that is received;

• 61% of respondents believe that economic conditions and their impact on consumer demand is the greatest external factor influencing their business; and

• Expanding in new and emerging markets is the main area businesses would like to work on immediately.

HLB Mann Judd has a significant number of freight forwarding clients across Australia and internationally, ranging from large multinational businesses through to small family businesses. Our breadth of experience and industry knowledge ensures we are able to understand and advise on the financial and operational drivers of the freight forwarding sector

We hope that you enjoy the survey and wish you all the best for an ever changing freight forwarding environment.

STEVE GRIVASPartner, Head of Freight Forwarding, HLB Mann Judd sgrivas@hlbnsw.com.au +61 2 9020 4043

HLB Mann Judd is a leading Australasian chartered accounting firm. HLB Mann Judd Sydney provides a comprehensive range of business and financial services in addition to audit, accounting and taxation services that are central to our practices.

The Australian Federation of International Forwarders (“AFIF”) was created in July 1996 and strives to attain uniform, high standards of professional conduct within the Forwarding Industry.

Front-line’s goal is to provide the highest standard of recruitment and selection services to clients.

Myfreightcareer is a market leading, innovative Training Organisation providing training and traineeships to the International Freight Forwarding, Customs Broking and Logistics communities.

BRIAN LOVELLCEO, Australian Federation of International Forwarders brian@afif.asn.au +61 2 9314 3055

BILL NUSSBAUMDirector, Freight Forwarding Specialist, HLB Mann Juddbnussbaum@hlbnsw.com.au +61 2 9020 4140

TONY WENHAMGeneral Manager, myfreightcareer and Front-line Resources ManagementTony@myfreightcareer.com.au +61 2 9313 9777

The Australian Federation of International Forwarders (AFIF) is the peak industry body representing the interests and activities of international air & sea cargo forwarders in Australia.

The 2017 calendar year witnessed a significant increase in import and export cargo movements, particularly in air cargo, prompting analysts to be believe the industry and the wider economy is on the upturn. There is great interest to see whether this trend continues into 2018 and beyond. It is true that positive trade negotiations and free trade agreements should, in theory, increase traffic flows. However the increasing global and regional competitiveness of current and emerging economies will no doubt temper this to some extent. Forwarders are necessarily highly resilient in the face of sometimes unpredictable ebbs and flows of trade and generally manage to adjust accordingly.

The survey graphically demonstrates where the forwarders activities are concentrated and that their operations are almost equally split between air and sea cargo modes. Naturally the bulk of cargo moves to and from the eastern seaboard ports & airports of Sydney, Melbourne and Brisbane. Of interest is that whilst we know that a high percentage of forwarders also offer Customs Brokerage, a higher percentage are now offering integrated logistics services (83%). This is a necessity in the competitive world of freight forwarding.

We support HLB Mann Judd in their compilation of this interesting Benchmarking Survey and commend the outcomes to you for further reading of not only the freight sector but related subjects.

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WHAT MODES OF INTERNATIONAL FREIGHT TRANSPORT DOES YOUR BUSINESS OFFER?

WHAT STATE/S DO YOU PRIMARILY OPERATE IN?

73%SHIP

27%EXPRESS

67%AIR

2%

TAS

54%

NSW

43%

VIC

14%

SA

12%

WA

2%

ACT

2%

NT

24%

QLD

44%

EUROPE

43%

ASIA

40%

NORTH AMERICA

39%

NEW ZEALAND/ PACIFIC ISLANDS

33%

SOUTH AMERICA

24%

MIDDLE EAST12%

AFRICA

WHICH CONTINENTS DO YOU OPERATE IN?

IF YOU ARE PRIMARILY A FREIGHT FORWARDER, DOES YOUR BUSINESS CURRENTLY OPERATE A CUSTOMS BROKERAGE ARM?

20% 14% 66%

NOT PRIMARILY A FREIGHT FORWARDER NO YES

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DOES YOUR BUSINESS CURRENTLY OFFER INTEGRATED LOGISTICS?

NoWE ARE NOT

CONSIDERING THIS CHANGE

YESWE CURRENTLY

OPERATE LIKE THIS

CONSIDERINGWE ARE

CONSIDERING THIS CHANGE

7%10%83%

WHAT DO YOU THINK THE GREATEST EXTERNAL FACTOR INFLUENCING

YOUR BUSINESS IS?

61%ECONOMIC CONDITIONS AND ITS IMPACT ON CONSUMER DEMAND

18%EMPLOYMENT COSTS

21%OTHER (CURRENCY EXCHANGE RATES, COMPETITION, M&A, FUEL PRICES)

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IF THERE WAS ONE AREA OF YOUR BUSINESS YOU COULD FIX/CHANGE IMMEDIATELY WHAT WOULD IT BE?

WHAT IS YOUR CURRENT TURNOVER?

41%EXPANDING IN NEW AND EMERGING MARKETS

15%EXPAND THE TYPE OF FREIGHT FORWARDING SERVICES YOUR BUSINESS PROVIDES

15%SUPPLY CHAIN

9%TRAINING AND DEVELOPMENT

7%BUSINESS LOCATIONS

7%INTERNATIONAL TRADE

7%PRODUCT YOUR BUSINESS PRIMARILY TRANSPORTS

$100+ MILLION $0-$15

MILLION

$15-$30 MILLION

$30-$60 MILLION

$60-$100 MILLION

24%

20%

15% 15%

26%

61%NO

37%YES

2%NOT SURE

DO YOU CURRENTLY USE FINANCE FACILITIES AS A CASH FLOW FUNDING OPTION FOR YOURBUSINESS?

100+ 33%

50 -100 28%

26-5013%

11-25

13%

1-10

13%

HOW MANY EMPLOYEES DOES YOUR COMPANY HAVE? (PLEASE PROVIDE THE TOTAL INCLUDING ALL BRANCHES)

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CAN YOU RELY ON THE FINANCIAL INFORMATION YOU ARE PROVIDED TO MAKE INFORMED AND TIMELY BUSINESS DECISIONS?

IF YOU ANSWERED NO, WHAT ARE YOUR REASONS?

88%

YES

12%

NO

33%

I AM CONCERNED AROUND THE ACCURACY OF THE DATA

67%

MY TEAM DOES NOT POSSESS THE APPROPRIATE EXPERIENCE, TRAINING OR SKILLS FOR ME TO ASK OUT OF THE BOX QUESTIONS

WHERE DO YOU SEE PRODUCTIVITY AND IMPROVEMENT FOR YOUR

BUSINESS?

39%

THE SPEED AND DESIRE TO EMBRACE TECHNOLOGY

20%

ALIGNING OF TASKS AND ACTIVITIES WITHIN YOUR BUSINESS TO MAXIMISE OUTPUT

20%

APPROPRIATE INVESTMENT TOWARDS

TRAINING AND DEVELOPMENT FOR A

SKILLED AND ENGAGED WORKFORCE

20%

STREAMLINING PROCESS WITH REGULATORY

REQUIREMENTS 2%

DON’T KNOW

ARE YOU AWARE OF YOUR BUSINESS IMPROVEMENT INVESTMENT

STRATEGY?

WHAT AREAS ARE YOU INVESTING IN?

26%

NO74%

YES55%

IT

39%

RECRUITING36%

HR

27%

AQUISITION

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WHAT BEST DESCRIBES YOUR RECRUITMENT OUTLOOK?

6%PLAN TO RECRUIT

IN THE NEXT 3 - 6 MONTHS

55%CURRENTLY RECRUITING

25%HAVE NO PLANS

TO RECRUIT

12%PLAN TO RECRUIT

IN THE NEXT 6 -12 MONTHS

2%DON’T KNOW

DO YOU HAVE AN EXISTING AND RELEVANT STRATEGIC PLAN THAT HAS BEEN COMMUNICATED TO ALL STAFF AND KEY ALLIANCE PARTNERS?

21%NO

67%YES

12%CONSIDERING

DO YOU HAVE AN ANNUAL BUDGET/FORECAST PROCESS

THAT IS COMMUNICATED TO ALL KEY STAKEHOLDERS WITHIN THE

ORGANISATION

76%YES

17%NO

4%CONSIDERING

3%DON’T KNOW

DO YOU REGULARLY ROLL THIS FORECAST FORWARD TO INCORPORATE ANY NEW BUSINESS ACTIVITIES OR EXTERNAL ISSUES TO ENSURE THAT THE FORECAST IS ACCURATE

64%YES AT LEAST QUATERLY

27%NO BUT SPORADICALLY

6%WE HAVE DISCUSSED IT BUT AREN’T DOING IT YET

3%WE DISCUSSED THIS AND DON’T THINK IT’S RELEVANT TO US

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IS BUSINESS STRATEGY AND LIFESTYLE STRESS A CONCERN FOR THE BUSINESS OWNERS?

HAS THE BUSINESS STARTED A PLAN FOR AN EVENTUAL SALE OR TRANSITION?

ARE LATE PAYMENTS FROM CUSTOMERS AN ISSUE FOR YOUR

BUSINESS?

WOULD YOU CONTEMPLATE RETIREMENT OR SELLING YOUR

BUSINESS IN THE NEXT FIVE YEARS?

78%NO

72%NO

28%YES

43%YES

22%YES

28%YES

72%NO

57%NO

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