“A lot of people hope or believe that we can fix part of the chain and everything else will miraculously disappear. But what has happened is that a lot of inefficiencies have built up and are now working against each other, ”Mr. Knudsen said.

“There has always been a problem with the aging of truck drivers around the world, for example. So with these other issues it became a huge issue.

The new quarantine regulations for sailors entering and leaving China mean they cannot have disembarked for three weeks before entering China. Then they are faced with a two-week quarantine at the port of entry and an additional two weeks when they arrive in their hometown.

“So if they want to go home for the Chinese New Year, there is little they can do until then. So what does it mean to bring people on board ships to Asia? What does it mean for ports when people can’t get off? “

In the six-month period ending September 30, Toll Group – acquired by Japan Post for $ 6.5 billion in 2015 – reported earnings before interest and taxes of $ 187 million, a turnaround from a loss of $ 84 million. million dollars recorded over the same period last year.

While Toll’s global shipping business benefited from increased freight volumes that followed a decline in business at the start of the pandemic, Toll Global Express’s business continued to lose money. . However, it is now off the books, sold to Australian private equity firm Allegro Funds.

The Toll Global Express name will begin to fade in Australia in April when a two-year rebranding exercise by the new owners begins. Toll Group is already moving into an era known internally as Toll 2.0.

Increased focus on Asia

Mr Knudsen notes that Toll Group has traditionally been a very Australia-centric company, making 75 percent of its revenue in its home country. This complicated the company’s determination to do more in Asia.

“My observation, outside of Australia, is that it’s really hard to do that from Melbourne. How do you compete from there in Vietnam or China? It’s just really hard.

Half of the company’s revenue now comes from Australia. This will continue to decline, but its shipping and logistics base will remain strong.

“If you look at DB Schenker and DHL in Germany, Expeditors in the US, Nippon Express in Japan… it’s very important to have a domestic market where you are the go-to choice. I think Australia will stay that way for us.

“But certainly, we would like to be more present and visible in Asia.”

Toll also sees it as an opportunity to bring its experience in Asia to its Australian clients.

In Singapore, its subsidiary ST Logistics works hand in hand with the government, stocking and transporting a wide range of products, including the pandemic stockpile of medical products. The company has succeeded in automating the supply of hospitals with smart dispensers of low-cost items and smart cabinets for higher-value equipment.

SD Logistics is also working with some customers and suppliers to move to ex-factory shipping arrangements, where the buyer is responsible for all door-to-door shipping.

It might work for Australian customers as well, Mr Knudsen said. Problems in Australian warehouses often start in offshore factories. “If you just focus on the supply chain that hits Australia, you can’t really solve the problem.”

He believes more Australian companies should look beyond China to Southeast Asian countries such as Vietnam and Indonesia, where labor costs are lower.

“We believe we can leverage the customer relationships we have in Australia and Singapore in markets like Vietnam. “

As for speculation that Japan Post may offload the rest of Toll Group at some point, Mr Knudsen said the Japanese investment is long term.

The acquisition was difficult. Japan Post depreciated Toll Group’s value by $ 4.9 billion in 2017. Early last year, Toll was hit by one of the worst cyberattacks in Australian business history. Just over a year ago, revelations of past corruption and fierce internal rivalries put management in the spotlight.

The business – and its owners – had evolved, Mr. Knudsen said.

“We see no indication from the board that they are considering selling Toll. The feedback we receive is very clear; they want to keep investing in the business.

Toll is a year into a four-year plan to invest $ 850 million in its fleet and warehouses in Asia and Australia.