INSIGHTS
Where’s your mining travel budget really going?
Mining corporate travel is notorious for being expensive. Fly-in, fly-out (FIFO) flights, drive-in, drive-out (DIDO) vehicle hire, chartered transport, last-minute bookings, and fluctuating fuel prices can easily push budgets into the red. In this blog, we'll explore where the hidden costs are piling up, what strategies you can use to get a better grip on your spending, and provide actionable insights on how you can keep your workforce moving without the heavy price tag.
With distance comes limited options
Mining operations are often located in remote and challenging areas with restricted access, forcing companies to rely on private flights, helicopters, specialist ground transport and multiple connecting flights. These industry specific transportation options are often significantly more expensive due to their complexity, niche nature, limited availability and the long distances involved.
Travel management tip
Start by evaluating your transport options, based on the frequency of trips, the volume of travellers and the distance between sites. Look to negotiate group booking deals for shift rotations, or bulk purchases with preferred transport providers wherever possible. This strategy can secure better rates based on your annual volume and ongoing loyalty. Consider working with a travel partner to help centralise and consolidate these bookings for more consistent pricing and pre-negotiated rates, while also ensuring you are not paying a premium simply because you are a mining, oil, or gas company.
Harness the power of smart travel management tools which quickly and efficiently aggregate rates from across a range of suppliers and which can be customised to display the best price available.
Mining companies spend up to 30% more on last-minute flight bookings compared to planned travel.
The price of remoteness
Travel logistics to remote sites is synonymous with high costs due to expensive flights, limited options and last-minute bookings. With reliance on a highly mobile workforce, this means that mining sector travel is often subject to price hikes, fuel spikes and inflated rates. The nature of the resources sector also means that roster changes and weather delays, can lead to unavoidable and costly last-minute bookings or passenger changes.
Travel management tip
To keep costs under control, it’s important to centralise and automate your travel booking processes, policies and compliance. This will enable better visibility of your travel spend, while helping you identify opportunities for potential cost-saving. Having a clear, company-wide policy on booking lead times will also limit additional costs incurred due to last-minute bookings.
To further help prevent budget blowouts, FCM Platform is a centralised online booking platform that delivers greater visibility into your travel spend. For ease of transparency, budgeting and forecasting, this purpose-built travel tech also allows you to easily access consolidated reports to track where your money is going – fortnightly, monthly or annually, daily – whatever you need. FCM’s industry experienced specialists can assist with pre-negotiating your rates, while tapping into bulk purchasing power can also help lock-in better deals and help with cost reduction.
Plan for the unpredictability of Mother Nature
No amount of insight can predict the nature or impact of extreme weather conditions, particularly in remote mining locations. When they do occur the result can be flight cancellations and delays, affecting employee mobility and leading to unplanned travel costs. If not managed properly, these travel disruptions can be costly - both financially and operationally.
Travel management tip
Stay on the front foot by planning ahead to build contingency strategies into your travel program and budget. Develop a proactive re-booking process, build strong supplier relationships and ensure your travellers can be easily contacted in the event of a delay or last-minute change. It’s also essential to partner with a travel expert who can act quickly when disruptions happen. FCM can assist with real-time monitoring of weather conditions, travel disruptions and flight changes, while the 24/7 in-house support team can respond with additional assistance. For traveller safety, risk management and crisis communication, FCM’s Mobile App can locate and update travellers with the latest travel information. Apart from supporting the traveller at every stage of their journey, the app can further be configured to manage approvals for flight and accommodation changes on the go.
According to Deloitte, 35% of mining companies in remote areas experience more than 10 weather-related delays annually, leading to extended project timelines and increased operational costs.
The accommodation squeeze
The limited availability of suitable accommodation near mining sites is a major issue across Australia – and globally. The simple equation of limited supply and high demand can drive up costs for all concerned. This shortage can force employees to endure long commutes and companies to rely on sub-optimum, temporary housing solutions. This can lead to extensive operational downtime and overall employee dissatisfaction, which can ultimately impact on the overall productivity of the site, staff wellbeing, and travel experience. So remember that cutting costs and booking the cheapest accommodation, may potentially have significant longer-term costs for the business.
Travel management tip
When demand outstrips supply, it’s important to think long-term. Consider block booking accommodation as far ahead of time as possible, especially during peak work and tourist seasons. Use your high volume of nights booked per year, to negotiate with nearby hotels and lodging providers. Look to establish a strong ongoing relationship with them, offering your booking frequency and loyalty to secure better rates and ensure consistent, year-round availability. Also remember to consolidate your organisation’s accommodation needs across all departments, from FIFO workers to executives and visiting specialists, to improve your leverage for discounted bulk bookings and save money. Partnering with a travel management company (TMC) can also provide access to the widest range of regional and remote accommodation, all at pre-negotiated rates.
Mining Australia reports that 70% of mining sites have limited access to good accommodation within 50 km of their sites, forcing employees to either commute long distances or use temporary housing.
Unearthing hidden expenses
Many mining companies struggle with managing and tracking hidden expenses. With hundreds of remote employees travelling every week, costs like per diems, fuel charges and incidentals can easily exceed budget predictions and be mismanaged. These issues often arise when travel expenses and vital data isn’t being captured through the right channels, reducing oversight of just where the budget is leaking.
Travel management tip
The best way to streamline expense accountability is to implement an integrated expense management system, that directly links travel bookings to your accounting system. This helps ensure that all expenses are captured and accounted for before they become a time consuming problem. It’s important to also create clear guidelines and policies within your organisation for per diems, ground transportation and miscellaneous charges to reduce the risk of duplicate claims. Additionally a travel management company (TMC) may be able to reduce these extra expenses by negotiating adds-on with suppliers upfront, such as complimentary meals, Wi-Fi and parking. It’s these little extras which can also enhance the traveller’s experience.
FCM Travel understands the importance of balancing travel costs, and overall productivity, with the very real issue of employee wellbeing. A rigid, overly restrictive travel policy may effectively rein in costs, but if they result in traveller dissatisfaction, fatigue or high staff turnover, it’s false economy. The answer lies in building savings, efficiency, and flexibility into your budget, to deliver the best overall business outcome and mining industry travel program.