Australian Logistics Council Submission to the National Transport ...
Australian Logistics Council Submission to the National Transport Commission’s Review on Safe Payments Hal Morris – Chief Executive The Australian Logistics Council (ALC) believes strongly the safety of our workforce must be the prime consideration of the Transport and Logistics industry. Vision Zero for Safety is the first priority of the National T&L Freight Strategy 2008-2015 and we note that it has been also identified in the NTC’s National Policy Framework for Australian Transport Ministers. ALC supports a safe transport and logistics industry underpinned by appropriate remuneration for employees and operators. It is essential that the safety culture is built, reinforced by regulation and industry leadership, monitored through independent auditing and, where necessary given teeth with penalties that are appropriately enforced. The focus of ALC’s work with the NTC, ATA, ARA, TWU and Ports Australia in developing the single national T&L code is a practical example of an effective industry response. The ALC’s membership encompasses all sections of transport and logistics industry and has diverse views on how safe workplaces can be achieved. The common element of these views is that by working together the critical issue of safety in the heavy vehicle industry can be tackled and resolved. This submission therefore sets out the current safety situation in T&L and discusses benefits and disadvantages of the Safe Rates of Pay proposal as well as other options for encouraging safe practices. In this submission the concept of Safe Rate of Pay is understood as a proposal for an enforceable rate of remuneration for transport workers, set by the government or other appropriate body, to underpin safety of the heavy vehicle industry in Australia. Safety in the Heavy Vehicle Industry Australia’s freight transport is dependent on two fundamental but vital principles; • •
A safe working environment, and Productive and efficient transportation in support of domestic and export supply chains.
Safety is a whole of supply chain issue, with decisions made by people outside the truck impacting on the safe performance of the heavy vehicle. This includes scheduling and load decisions, as well as the determination of remuneration for the employee or owner driver. Historically the number of deaths involving heavy vehicles is reducing despite the growing freight task and an increasing number of trucks on Australia’s roads. The latest Fatal Heavy Vehicle Crashes Australia Quarterly Bulletin (see table) shows the number of deaths from crashes involving articulated trucks has approximately halved between 1989 and 2007. However it also shows the decrease in deaths has slowed and may in fact be trending towards an increase in absolute terms.
Fatal Heavy Vehicle Crashes Australia Quarterly Bulletin October – December 2007, Department of Infrastructure, Transport, Regional Development and Local Government
Current Heavy Vehicle practices and regulations In recognition of the traditionally poor safety record of heavy vehicles, government and industry have taken steps towards encouraging safe practices. Such steps in recent years include, but not restricted to; • • •
National compliance and enforcement legislation including Chain of Responsibility provisions, National Fatigue Reform due to be introduced in most states on 29 September, Improvements to Australian Design Rules, for example front under-run protection,
•
•
Increased use of Industry Based Codes (such as the ALC’s Retail Logistics Supply Chain Code of Conduct) to underpin safe practices as a condition of business, and Commitment to T&L Vision Zero with its aim of Zero fatalities, injuries, motor vehicle accidents and tolerance of unsafe behaviour & practices.
Despite these changes economic pressures on heavy vehicle drivers, in particular owner drivers, have been identified with practices by some parts of the heavy vehicle industry that undercut safe working practices. Recent economic pressures include, • •
The rapid increase in the cost of fuel, including diesel, and Relatively high inflation impacting particularly on the cost of living as well as the cost of doing business.
The cost of fuel has recently moderated, but is still at historically increased levels. Long distance heavy vehicle operators are often paid on a “per trip” rate leading to the highly competitive marketplace rewarding the operator/s that do the trip for the lowest cost. It is argued this in turn may encourage some operators to sacrifice safety (i.e. not complying with fatigue or speed regulations) in order to ensure costrecovery. The Transport Workers (Long Distance Drivers) Award’s structure is based on driving and loading/unloading times. Congestion, unforeseen circumstances and long waiting/queuing time at depots are not taken into consideration. The imbalance in bargaining power between operators and larger customers is cited as encouraging such practices. Also, as Australia moves towards a carbon economy with a Carbon Pollution Reduction Scheme, it is anticipated this will also negatively impact on the cost of doing business in the transport industry. Safe Rates of Pay The argument for Safe Rates of Pay for employees and owner drivers involved in the heavy vehicle industry is based on the premise that if drivers are guaranteed a minimum rate of pay there is an increased incentive for such operators to implement safe practices in their operations, thereby improving heavy vehicle road safety outcomes. The counter argument is safety should be the basis of all practices and decisions in the Transport and Logistics industry, including the compliance with all safety regulations, adoption of the principles of Chain of Responsibility and promotion of industry action to ensure Safety is a dominant factor in decisions. Payment should
then be decided separately, thereby extricating safe behaviour from economic pressures. Benefits of Safe Rates of Pay • • •
• •
Certainty of income for employees and owner-drivers, Safe and sustainable rates of pay are not undercut in the highly competitive market, Operators compliance with fatigue and speed regulations may increase with a shift from payments based on a “per-trip” basis to payments based on time taken, Customers are unable to use bargaining power to drive costs down to unsafe levels, Demurrage, or payment for time spent waiting in queues for loading/unloading, may encourage more efficient distribution and dispatch systems.
Disadvantages to Safe Rates of Pay •
•
• • •
A regulated Safe Rate of Pay may not have the flexibility to be able to move sufficiently quickly to keep up with rapidly changing cost pressures on operators, i.e. fluctuating costs of fuel and rising inflation and/or cost of living, If the safe rate of pay is based on time not kilometres travelled the resulting lack of competition may reduce the incentive to ensure goods are delivered in the most efficient and productive manner. Additional costs, if not directly associated with a safety benefit, has the potential to impact negatively on national productivity, Does not directly target unsafe practices in the transport industry, All operators should comply with existing and future safety regulations, May be difficult to enforce compliance.
Other Options The introduction of the National Fatigue Regulations in the majority of jurisdictions from 29 September 2008 is anticipated to have substantial road safety benefits. These reforms have a strong potential to address many of the issues behind the call for Safe Rates of Pay. To endure these benefits are fully realised it is critical there is strong and consistent enforcement and compliance across the industry. The increased promotion and adoption of industry codes, including the possible expansion of the ALC’s Retail Logistics Supply Chain Code of Conduct into a National Logistics Code, as the basis for commercial agreements is designed to ensure safe practices are a core and nonnegotiable principle of doing business. An option for consideration may be to include the principle of appropriate remuneration in an industry based National Logistics Code to achieve the aims of the Safe Rate.
The lack of remuneration for sometimes unreasonably long queues of heavy vehicles at loading/unloading facilities may continue to encourage in unsafe practices in order to make up for the lost and unproductive waiting times. The NTC may consider whether there is a role for Government to extend IR regulation to ensure operators are recompensed for this time may reduce the incentive for unsafe practices and also encourage operators of such facilities to adopt more effective and efficient timeslotting and queuing practices. The alternative would be to address this issue through industry based codes. Conclusion The ALC’s membership believes Safety is the core consideration providing the foundation for an effective and efficient Transport and Logistics industry. Safe Rates of Pay has been suggested as one avenue of achieving this aim. The ALC respects its membership has divergent opinions on the likely impact of the introduction of Safe Rates of Pay on safety outcomes in our industry.
A safe working environment, and Productive and efficient transportation in support of domestic and export supply chains.
Safety is a whole of supply chain issue, with decisions made by people outside the truck impacting on the safe performance of the heavy vehicle. This includes scheduling and load decisions, as well as the determination of remuneration for the employee or owner driver. Historically the number of deaths involving heavy vehicles is reducing despite the growing freight task and an increasing number of trucks on Australia’s roads. The latest Fatal Heavy Vehicle Crashes Australia Quarterly Bulletin (see table) shows the number of deaths from crashes involving articulated trucks has approximately halved between 1989 and 2007. However it also shows the decrease in deaths has slowed and may in fact be trending towards an increase in absolute terms.
Fatal Heavy Vehicle Crashes Australia Quarterly Bulletin October – December 2007, Department of Infrastructure, Transport, Regional Development and Local Government
Current Heavy Vehicle practices and regulations In recognition of the traditionally poor safety record of heavy vehicles, government and industry have taken steps towards encouraging safe practices. Such steps in recent years include, but not restricted to; • • •
National compliance and enforcement legislation including Chain of Responsibility provisions, National Fatigue Reform due to be introduced in most states on 29 September, Improvements to Australian Design Rules, for example front under-run protection,
•
•
Increased use of Industry Based Codes (such as the ALC’s Retail Logistics Supply Chain Code of Conduct) to underpin safe practices as a condition of business, and Commitment to T&L Vision Zero with its aim of Zero fatalities, injuries, motor vehicle accidents and tolerance of unsafe behaviour & practices.
Despite these changes economic pressures on heavy vehicle drivers, in particular owner drivers, have been identified with practices by some parts of the heavy vehicle industry that undercut safe working practices. Recent economic pressures include, • •
The rapid increase in the cost of fuel, including diesel, and Relatively high inflation impacting particularly on the cost of living as well as the cost of doing business.
The cost of fuel has recently moderated, but is still at historically increased levels. Long distance heavy vehicle operators are often paid on a “per trip” rate leading to the highly competitive marketplace rewarding the operator/s that do the trip for the lowest cost. It is argued this in turn may encourage some operators to sacrifice safety (i.e. not complying with fatigue or speed regulations) in order to ensure costrecovery. The Transport Workers (Long Distance Drivers) Award’s structure is based on driving and loading/unloading times. Congestion, unforeseen circumstances and long waiting/queuing time at depots are not taken into consideration. The imbalance in bargaining power between operators and larger customers is cited as encouraging such practices. Also, as Australia moves towards a carbon economy with a Carbon Pollution Reduction Scheme, it is anticipated this will also negatively impact on the cost of doing business in the transport industry. Safe Rates of Pay The argument for Safe Rates of Pay for employees and owner drivers involved in the heavy vehicle industry is based on the premise that if drivers are guaranteed a minimum rate of pay there is an increased incentive for such operators to implement safe practices in their operations, thereby improving heavy vehicle road safety outcomes. The counter argument is safety should be the basis of all practices and decisions in the Transport and Logistics industry, including the compliance with all safety regulations, adoption of the principles of Chain of Responsibility and promotion of industry action to ensure Safety is a dominant factor in decisions. Payment should
then be decided separately, thereby extricating safe behaviour from economic pressures. Benefits of Safe Rates of Pay • • •
• •
Certainty of income for employees and owner-drivers, Safe and sustainable rates of pay are not undercut in the highly competitive market, Operators compliance with fatigue and speed regulations may increase with a shift from payments based on a “per-trip” basis to payments based on time taken, Customers are unable to use bargaining power to drive costs down to unsafe levels, Demurrage, or payment for time spent waiting in queues for loading/unloading, may encourage more efficient distribution and dispatch systems.
Disadvantages to Safe Rates of Pay •
•
• • •
A regulated Safe Rate of Pay may not have the flexibility to be able to move sufficiently quickly to keep up with rapidly changing cost pressures on operators, i.e. fluctuating costs of fuel and rising inflation and/or cost of living, If the safe rate of pay is based on time not kilometres travelled the resulting lack of competition may reduce the incentive to ensure goods are delivered in the most efficient and productive manner. Additional costs, if not directly associated with a safety benefit, has the potential to impact negatively on national productivity, Does not directly target unsafe practices in the transport industry, All operators should comply with existing and future safety regulations, May be difficult to enforce compliance.
Other Options The introduction of the National Fatigue Regulations in the majority of jurisdictions from 29 September 2008 is anticipated to have substantial road safety benefits. These reforms have a strong potential to address many of the issues behind the call for Safe Rates of Pay. To endure these benefits are fully realised it is critical there is strong and consistent enforcement and compliance across the industry. The increased promotion and adoption of industry codes, including the possible expansion of the ALC’s Retail Logistics Supply Chain Code of Conduct into a National Logistics Code, as the basis for commercial agreements is designed to ensure safe practices are a core and nonnegotiable principle of doing business. An option for consideration may be to include the principle of appropriate remuneration in an industry based National Logistics Code to achieve the aims of the Safe Rate.
The lack of remuneration for sometimes unreasonably long queues of heavy vehicles at loading/unloading facilities may continue to encourage in unsafe practices in order to make up for the lost and unproductive waiting times. The NTC may consider whether there is a role for Government to extend IR regulation to ensure operators are recompensed for this time may reduce the incentive for unsafe practices and also encourage operators of such facilities to adopt more effective and efficient timeslotting and queuing practices. The alternative would be to address this issue through industry based codes. Conclusion The ALC’s membership believes Safety is the core consideration providing the foundation for an effective and efficient Transport and Logistics industry. Safe Rates of Pay has been suggested as one avenue of achieving this aim. The ALC respects its membership has divergent opinions on the likely impact of the introduction of Safe Rates of Pay on safety outcomes in our industry.
