Treasury Secretary Steven Kennedy said (paraphrasing) yesterday...

Treasury Secretary Steven Kennedy said (paraphrasing) yesterday that "the good times were over" while WES CEO Rob Scott, while more nuanced, basically said similar. This echoes the message heard from WOW and Col previously that shoppers are trading down to cheaper private label items.

Robert Gottliebsen in 'The Australian' this morning claims that over the last two weeks, retail sales have sharply dropped. He refers to the lag in official statistics, suggesting he's done the ring-around that the ABS/RBA bureaucrats can't undertake.

All this sounds negative for transport companies - but:

(a) LAU has increased its margins through a greater emphasis on rail freight, with the proof in numerous videos above
(b) a recession could be expected to see some family-owned road transport operators go bankrupt in a few cases, or sell out at low prices if they have some scale that may be attractive to others
(c) the 1 July 2023 lower instant equipment write-offs will result in Australia's truck fleet ageing more than if the present much larger allowance had been kept. But LAU should be in a better position to renew its road transport fleet than some smaller operators
(d) with the exception of Darwin, Alice Springs and Tasmania, LAU offers a national point-to-point service that can't be matched by many smaller road transport fleets
(e) if unemployment starts to edge up, it may be a little easier for LAU to hire heavy vehicle drivers
(f) fresh fruit and vegetables cartage is an important part of LAU's operations, and this category of food will continue to be regarded as 'essential' by a goodly percentage of Australians given the health benefits. Fruit can also be cheaper than dry grocery processed "alternatives".
(g) demand for LAU's air-freighted exports should continue to be reasonable, especially if the A$ stays low. At least one bank predicts it will rise from A$0.65 to the US$ to A$0.78 within 12 months IIRC: will this occur?
(h) the Scott's Refrigerated Transport/Logistics failure has seen LAU able to acquire assets at what may well have been firesale prices
(i) in recessionary times, consignors may want to deal with trusted names in transport more than fly-by-nighters.

If you disagree, let us know through 'HC'.