As the civil construction sector is going through the post–pandemic recovery stage, it needs to manage other challenges, namely climate transition, labour shortages, supply chain disruptions and inflation. Maxibor CEO Rodney O’Meley shares his insights on the impact of these challenges on the horizontal directional drilling industry and how Maxibor is addressing them so that clients and other project stakeholders’ expectations continue to be met.
O’Meley is adamant: the horizontal directional drilling (HDD) industry must play a big role in the climate transition process.
“Maxibor has been at the forefront in Australia for some time now as we have espoused the important contribution the HDD industry can make to mitigating the impact of increasing frequency and impact of fire, wind, flood, inundation, sea level rise, subsidence, drought and rain rivers and rain bombs,” he says.
“It is ever more important that the diffusion of new knowledge and better practice around HDD is promoted across the infrastructure sector as the impact of climate change is accelerating much faster than expected and becoming even more extreme.
“The Maxibor cooperative and knowledge sharing approach across the trenchless industry is the way we can build a future we all look forward to.”
The company’s status in the HDD industry allows it to self-perform most projects with its highly experienced drillers and crews. The volume of HDD work now and in the pipeline is however placing significant pressure on resources in Maxibor and across the HDD industry.
“Maxibor is needing to work smarter and more productively to help overcome the scarcity of labour resources,” says O’Meley.
“It is also supplementing its existing resources through both subcontracting and assembling project teams from the body of contract HDD workers in Australia and abroad.”
Maxibor has already been able to improve its productivity in several ways.
It’s the case for when it comes to continuing the push for early involvement in the design of projects utilising the better practice knowledge that exists inside Maxibor and its wider network of design engineering and other advisors. This expedites project start times and minimises delays through the delivery stage.
The company has also improved the enhancement of in-field technology for daily reporting, data gathering, security and site inspections (drones) along with application of advances in design engineering, business development and operational management technology. The digital dividend is time and money saved and more informed decision making.
Maxibor extended one of its Vermeer 100×120 rigs to enable it to use the longer 9.1 metre drill rods providing maxi-rig drill rod capability without increasing the set-up area.
The company also focuses on the individuals who are part of the brand’s DNA; Maxibor focusses on on-going people skill development as part of a life-long learning approach, and creating a more agile workforce and increased role flexibility within the company.
Maxibor has implemented a successful subcontractor model.
“Clients are very happy as Maxibor maintains its full involvement in the important early design and scoping stages of the works,” says O’Meley.
“Subcontractors are happy as they have access to a ready pipeline of work without the hassles of business development, commercial negotiations, dealing with the client on delivery matters and preparation and collection of payment claims.”
This approach, combined with on-going HDD project management through Maxibor’s experienced and knowledgeable project managers, ensures works are delivered safely, with quality and on schedule.
“Our clients know that Maxibor will be there at all the key phases of the project and are happy in dealing with an HDD provider who knows how to work cooperatively and share knowledge across the supply chain to get projects delivered,” he says.
“Subcontractors are happy as Maxibor effectively takes away their pain points and allows them to move to the next Maxibor provided project without the concern or cost of all the areas which Maxibor’s very experienced design engineering and HDD project management team very capably handle.”
The company already has numerous subcontractors working under this model, and there is growing interest from others looking to reduce the pain.
“Subcontractors are also appreciating the support Maxibor provides them through access to equipment, friendly cash flow and support for them to develop and grow in their own right,” says O’Meley.
According to David Turner, Maxibor’s National Business Development Manager, its reputation and network across the Australian and international HDD world is due to its numerous skilled HDD drillers and crew members who can be readily assembled for those special projects requiring added and experienced resources to undertake delivery of the works.
“The ability of Maxibor to be able to bring together a very experienced additional team at relatively short notice is helping Maxibor to participate in even more major maxi-rig projects,” says Turner.
“Clients are very impressed when you can turn up with such experienced heads in your HDD project team.”
Supply chain disruption has been one of the major side effects of the global health and political upheaval in the past few years. This has particularly impacted the supply of specialised equipment into the civil construction sector.
Maxibor is overcoming this situation through improved supply chain management processes as the company is constantly working with suppliers to ensure that supply of materials and other services into projects is able to be aligned with the construction schedule.
Strong supplier relationships developed over many years is being leveraged to ensure project needs are met in these difficult times.
Maxibor is also working closely with international supply chain experts such as Alex Tao from AusInland, who can better connect Maxibor with overseas sources of equipment not readily available to the Australian market.
This is increasing Maxibor’s knowledge of the latest technology and innovation in the underground installation industry and opening wider opportunities of participation in the market.
One of the other challenges the HDD industry has to navigate through is inflation.
It is an increasingly significant factor in the pricing of projects, as the time from initial quote for a project to actual delivery now very much matters given the underlying rate of inflation.
O’Meley says the civil construction sector has been particularly impacted by increases in fuel, equipment costs, interest rates and insurances.
While the average wage growth rate at around 3.8 per cent is lagging inflation, it is expected to escalate further in 2023, especially in the civil construction sector where job vacancies are very high.
The wage growth rate for the sector is likely to be above the expected 4.5 per cent average for Australia by the end of 2023, even if the headline inflation rate falls.
The annual inflation rate in Australia climbed to 7.8 per cent in Q4 of 2022, well above the low 2s and 3s in recent years.
“With the lags from pricing to delivery on many HDD projects being in the range of six to 12 months, the need to carefully consider both initial pricing and a final negotiated price becomes much more critical since margins on thinly priced projects can be quickly eroded through delays,” O’Meley says.
He says that “mechanisms need to be in place to ensure projects are being completed for a fair and reasonable price, not one that will impact the sustainability of the business”.
Some of the initiatives Maxibor has taken to mitigate the inflation factor include four pillars. The first is seeking to work with asset owners and principal contractors to help to accelerate design approvals to facilitate earlier commencement of works.
It’s also primordial to gain pre-contract approval for ordering materials to lock-in price and secure supply. Revisiting designs with the benefit of additional geotechnical information and site understanding to help reduce project cost and risk is also a sine-qua-non condition for success for Maxibor.
O’Meley says this is coupled with revisiting the construction schedule to bring forward parts of the scope ready to go, and providing more time for those sections requiring a longer approval period.
For more information visit Maxibor or email rodney.omeley@maxibor.com.au
This article appeared in the April edition of Trenchless Australasia. Access the digital copy of the magazine here.
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