Australia Yanks The Supply Chain To Tackle Road Deaths

Release date: 6/01/2016

Financial Times, by Jamie Smyth, 6 January 2016
Controversial new rules aimed at making trucking safer are attracting international interest.

One of the most dangerous jobs in Australia: a truck rolling through the outback

John Posnakidis was sitting at a bus shelter on a highway near Adelaide when an out of control truck carrying almost 40 tonnes of steel ploughed into him, killing the 42-year-old father of three instantly. 

“John’s passing has devastated our family,” says Sue Posnakidis, his sister.
The tragic accident was one of 985 fatal crashes involving heavy vehicles that took place between 2010 and the end of 2014 in Australia, causing the deaths of 1,141 people. It is a toll that makes truck driving one of the most dangerous jobs in Australia, a country dependent on road freight.
In response to the problem, the authorities have introduced controversial regulations that link drivers’ pay with road safety, making the entire supply chain responsible for safety, from suppliers of goods to road hauliers. The system works by ensuring that a higher salary and contract costs can be passed on through the supply chain. It is being examined as a model for the global logistics industries, given the high numbers of deaths and injuries from trucking worldwide.
The “safe rates” system is lauded by trade unions, who say it reduces the pressure on drivers to speed and refrain from taking breaks. But it is opposed by others in the industry, who argue that a link between pay and safety is not proved, that the system increases costs on road hauliers and duplicates existing regulations.
Australia’s Road Safety Remuneration Tribunal, which regulates pay and conditions in the sector, is attracting interest abroad with the International Labour Organisation, a UN body, recently deciding it should be a guide for a proposed international code of practice to protect truck drivers and road users from injury. Industrial relations experts say this is a pioneering system that makes companies at the top of the supply chain accountable for the practices throughout it.
“There is growing recognition that supply chains represent a challenge to existing regulatory regimes and health and safety inspectorates,” says Michael Quinlan, professor at the University of New South Wales. “For example in trucking, an elaborate subcontracting network is often used by larger operators to reduce costs, which can encourage unsafe work practices.”

Elsewhere, the US Federal Motor Carrier Safety Administration is reviewing the link between pay and safety in trucking, one of the country’s most deadly jobs with 835 deaths in 2014.
“Other countries have now recognised that pressures on drivers lead directly to the carnage on our roads,” says Tony Sheldon, national secretary of Australia’s Transport Workers’ Union.
“This is about holding those accountable at the top of the transport chain — the wealthy retailers and manufacturers — for the deadly effects of low-cost contracts.”
Last month, the RSRT issued its most important ruling to date, setting minimum payments and conditions for contractor truck drivers in the long-haul and supermarket supply chain.
“This is a world first ruling,” says Michael Rawling, lecturer at the University of Technology Sydney. “It recognises how the world of work is changing as the number of independent contractors grows and [the number of] company employees protected by labour laws across many sectors diminishes.”
The order covers about a third of Australia’s 230,000 truck drivers. It mandates that companies that hire owner-drivers or subcontract work to them must pay them to take breaks; for time spent queueing; loading or unloading; cleaning, inspecting and repairing a vehicle. Any company or individual found to have breached an RSRT order can be fined and issued with a court injunction to ensure compliance.
Matthew Jordan, who with his girlfriend drives 9,000km a week between Perth and Brisbane and back, says the pressure on drivers can be immense.
“In a previous job I had my boss screaming at me down the phone to meet deadlines,” he says. “There is a lot of pressure from the big retailers at the top of the supply chain and when you are new with a company you want to show them you can do it.”
However, raising safety issues can cost drivers their jobs. One driver, who was fired by a construction company in March, says: “The company kept overloading my truck and I refused. I figured if my axle broke and I took out a busload of kids I’d be the one paying the price, not them.”
The company in question refused to comment on the claims.
The coroners’ report into the death of Posnakidis, published in January 2015, details some of the immense pressures in the highly competitive road haulage industry. It found In Front Transport, the company that owned the truck that hit Posnakidis, was “in strained financial circumstances and was operating at a dysfunctional level” at the time of the crash. The driver was carrying a particularly important load and had endured a heavy work schedule before the crash, the report said.
Advocates of the RSRT payment orders say that, by mandating minimum pay and conditions for drivers it will level the playing field between the larger hauliers, which tend to comply with regulations, and those rogue operators that do not. Audits should also ensure that big retailers and manufacturers cannot continue to cut the value of contracts they agree with hauliers.
“Unfortunately, sometimes the contracts that people enter into don’t provide for safety and compliance,” says Paul Endycott, a general manager at Roads and Maritime Services, a New South Wales government agency. Its inspectors have targeted more than 20 truck distribution centres for big retailers and logistics companies during the past 18 months. An investigation at a truck distribution centre operated by Coles, one of Australia’s biggest supermarket chains, in December detected systemic failures in heavy vehicle safety and compliance.
“We call on top management and the board of directors to step in and ensure there is rapid cultural change to ensure legal compliance with the requirements for heavy vehicle safety,” RMS said at the time.
Many industry groups have opposed creation of the RSRT, arguing that it increases costs for business and there is no link between safety and pay.
“The ‘safe rates’ concept centres around the proposition that paying road transport industry drivers differently and at higher rates of pay will lead to higher levels of safety — a deeply flawed contention that we reject,” says Innes Willox, chief executive of Australian Industry Group, which represents more than 60,000 businesses. The group has called for the disbandment of the RSRT, saying it distracts government and industry resources away from measures widely recognised as improving safety.
The view of road hauliers is mixed. Some warn that small companies will suffer while others say the system could work as long as the RSRT regulates all the way up the supply chain.
Glenn Sterle, a former truck driver and now Labor senator who helped steer the creation of the RSRT, says the system must be mandatory to save lives.
“Every day, as my own son pulls out of the driveway in his truck, I think of his safety and it is the same for every parent whose kids are driving on our roads.”

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