For some time I have pointed out that the industry will see changes this year that will impact us until 2024 when I predict is when we will really start to rebuild.
The concern I raised in the story “Bumpy road to recovery” around a sustainable industry is starting to pan out for the worse with the (currently) biggest freight service company advising staff and some key clients that they are exiting the business events arena. This was communicated as “putting on ice” or similar language. Despite having a pipeline of confirmed work, DSV have advised they are closing their business events division due to ongoing staff resourcing and viability.
Some background. DSV is a Danish international freight consortium that purchased the global integrated logistics portion of Agility (headquartered in Kuwait) back in 2020/21 at what was seen in the event industry as a move to purchase the business at a reasonable cost off the back of the “covid affect”, which at the time raised questions as to whether it would make it work. At the time there were conversations about whether the staff would all remain.
Agility originally purchased Exposervice who at the time had the majority of the market share when it came to business event freight. Agility kept the two directors of Exposervice on longer term employment agreements and for continuity they stayed on and helped grow the business which coincided with an evolving event landscape which was growing nationally. This included Agility being appointed to four venues as “in house”, controlling the loading dock and also having the inside running to freight services for the sector. Unfortunately it started to unravel when the Managing Director left and then after an extended period of time the second director couldn’t come to an agreement for his ongoing employment.
This, overlayed with covid, put Agility in a tricky position as the scorned ex managers launched a competitive freight service company and due to them having the business relationships (a key word) also impacted what business was being retained by DSV and then came the “staff effect” – staff leaving to secure move stable guaranteed employment or just being disillusioned by the sector like many others.
The other change in freight was the international company Schenker, who really only wanted to service events that had an international component leaving the national events with less options for support. Schenker have had a mixed relationship with the local industry but made a move to cover the market by appointing a well-known industry representative who had previous experience as an organiser and freight service provider. There were thoughts that they were after more market share, a change in what translates into the business they wanted and then covid seemed to change what they were targeting. There is now talk about how long they will continue to service the business event sector as well.
This leaves Australia’s next biggest business events freight company, and the only independent family owned freight company, Gaffney’s Freight or as they are now called, GEL Events (Gaffney’s Event Logistics). They are in a relationship with Expo Logistics, the newly formed group who exited Agility.
The challenge ahead makes the whole situation even more concerning, it is near impossible for GEL Events/Expo Logistics to cover the whole works vacated by Agility without potentially letting down existing clients, as they too are suffering staff shortages and more importantly transport shortages (apart from the increased cost of fuel).
I am sure from the announcements they have had mixed emotions, it underlines my previous stories that family businesses have more to fight for, and are more invested, while the international companies – whether they be organiser, service or venue will always have the bottom line as the number one factor in decision making. I hope they now take a considered approach and not think they can now “dump” some shows and just keep the ones they want, or more importantly the more profitable ones.
I am also curious to see how now organisers and suppliers who previously declined to use GEL or Expo Logistics are now taken in by them, as loyalty to existing clients through the tough times surely should be the priority now, not companies backflipping who previously stated we need competition and won’t give you all our work?
This also ties with what I have raised previously, as a sector we need all events to survive as in the changing landscape a number of the bigger shows are shrinking and shows that still haven’t run since 2019 are yet to be proved and whilst ALL of us are under pressure we need to be good shepherds for ALL.
There is also talk emerging out of Melbourne about service providers needing to reform hourly rates, something that is being driven by the venue, this will have an impact on event costs and I will have something more on this next week as the scene playing out doesn’t paint one of growth and sustainability but rather one of implosion.
I hope for the industry’s sake we can come together and we can find some workable solutions as currently the self-destruction button is getting larger and there still is no united voice or vision, this I still believe is just the beginning as we have lost many great companies and people and we should be thinking about what, or more so, who may be next?