The Advisory Board of the SSI Schaefer Group has appointed a new CEO.
“National transport reforms have led to some improvements in the rail regulatory regime, but much more needs to be done to achieve the full benefits of reform,” said ARA CEO Danny Broad, in summarising the ARA submission to the Productivity Commission Inquiry into National Transport Regulatory Reform. Read more
Australia’s national truck laws must be substantially redrafted, the Australian Trucking Association said in response to the first issues paper of the Heavy Vehicle National Law (HVNL) review. Read more
This article first appeared in the August/September issue of Logistics & Materials Handling.
By Michael Kilgariff, Managing Director, Australian Logistics Council.
In the lead-up to the 2016 Federal Election, the Australian Logistics Council (ALC) urged the development of a comprehensive National Freight and Supply Chain Strategy to address these challenges.
The Federal Government subsequently agreed to undertake the development of such a strategy during the Prime Minister’s Annual Infrastructure Statement to the Parliament in November 2016.
Throughout the months of 2017, the ALC has been working closely with its members, supply-chain participants and other interested parties to catalogue the unique challenges faced by the transport and logistics sector, and to craft recommendations for appropriate policy responses from the Government.
The ALC believes the development of a National Freight and Supply Chain Strategy presents an ideal opportunity to establish a high-level framework that will facilitate the safe and efficient operation of Australia’s supply chains, which will:
- provide an integrated and efficient freight transport and supply chain network for Australia’s international and domestic supply chains;
- to the fullest extent possible, ensure that policy settings and regulation are competitively neutral between the different freight transport modes;
- allow freight operators to innovate and increase the productivity of the freight logistics services they provide, in order to improve outcomes for consumers, Australia’s industries and the wider economy; and
- contribute to continuous improvement in the safety of all freight logistics operations, as well as improved societal and environmental outcomes.
In early August, the ALC released Freight Doesn’t Vote – its final submission to the Inquiry Into National Freight and Supply Chain Priorities. This comprehensive document sets out a pathway that will equip the nation’s supply chains to deal with the economic needs of the future.
The reality is that Australia’s economy is being transformed by population growth, by technological change and by the changing behaviour of ever-more-discerning and empowered consumers. Like all other industries, the freight logistics sector must adapt to an economy in transformation.
Moreover, given the exponential growth of the middle class throughout Asia, and thus the importance of exports to Australia’s continuing economic performance, becoming a world leader in supply-chain efficiency and safety is not merely desirable, but essential.
The lived experience of Australian society over recent decades points to increasing levels of urbanisation. Effectively, this means we are trying to do more in a limited physical space.
In particular, resurgence in the desirability of inner-city living coupled with rapid rates of population growth present some urgent challenges for our freight logistics industry.
The essential items that most Australians take for granted in everyday life – food to eat, household appliances, clothing, medications and vehicles to name just a handful – are generally not grown or manufactured close to the places where most of us live.
These commodities must be transported from their point of origin to the retailers from which we purchase them, or otherwise delivered directly to our doorsteps from ports, freight depots or warehouses.
Yet, as we create more populous cities, it is fast becoming apparent that our existing planning regimes and approaches to development fail to adequately prioritise the movement of freight.
The congested state of many major freeways and key arterial roads – as well as traffic gridlock within cities themselves – is a constant source of annoyance for many Australians. However, more than simply being an irritation, these problems are symptomatic of a far deeper issue.
Capacity constraints in the road network are not only a problem for motorists – they also impose significant costs on the freight logistics industry.
The disruption to the supply chain that occurs because of road congestion as well as capacity issues afflicting ports, airports and rail freight facilities all have an impact on the cost of moving freight – and ultimately, the prices paid for goods by Australian consumers.
Australia’s supply chains do not stop at state borders. Our economy is national – and accordingly a nationally consistent approach to infrastructure and the regulation of freight movement is required.
In an ideal world, a national economy should be managed by the national government. This includes the responsibility for the development of the infrastructure and regulatory settings necessary for the nation’s supply chains to operate safely and efficiently.
In many circumstances, the Australian Government has encouraged the development of individual pieces of infrastructure through financing. However, many of the decisions relating to the planning and delivery of such projects are made by state and/or local governments.
This is the reality of Australia’s federal structure. Like all other industries, the freight logistics sector must work within the restraints imposed upon it by the Australian Constitution.
The unfortunate by-product of this constitutional reality can often be duplication and delay in achieving the sort of policy reform that industry – and the entire economy – badly needs.
Freight Doesn’t Vote makes a total of 41 specific policy recommendations, dealing with challenges faced by all modes of freight transport, as well as the inefficiencies that are acting to curb growth, and regulations that fail to adequately account for a changing economic environment.
Unless freight movement is given far greater consideration when planning decisions are made, business and consumer expectations about rapid and efficient delivery of goods will be difficult to meet in the future.
This is particularly true of CBD freight delivery, where competition for road space between passenger and commercial vehicles is already adding to business costs and consumer prices.
Continuing investment in infrastructure that permits deliveries from freight distribution centres to CBDs is critical if we are going to successfully meet our increasing freight task.
Some form of freight-only infrastructure should be considered by governments to improve freight delivery and decrease congestion and emissions in high-demand environments.
This may include the establishment of urban consolidation centres for freight delivery, as well as the adoption of ‘reverse curfews’, which would provide freight vehicles with the right of access to parts of the road at non-peak times, in order to improve efficiency of deliveries.
In its submission, the ALC contends that this is one area where the Federal Government can play a leadership role, by incentivising the incorporation of such measures in urban planning systems, and commissioning a formal review of practices such as curfews that inhibit efficient CBD freight delivery.
Freight Doesn’t Vote also urges the Federal Government to prioritise greater use of technology enhance the efficiency and safety of our freight networks.
This includes assisting small and medium providers with the adoption of global data standards to enhance supply-chain visibility, and moving towards the mandatory use of telematics in heavy vehicles as a means of improving driver safety and establishing a fairer, more effective model for road pricing.
Blunt instruments such as fuel excise charges and registration fees are no longer raising sufficient revenue to support the road network of a 21st-century economy.
As such, it is imperative that we move to a fairer, more efficient road pricing and investment model, under which users pay according to where and when they travel.
Technological enhancements, such as GPS tracking, now make it easier than ever to monitor vehicle use.
It is time to use these technologies as the basis of a fairer, more responsive approach to road pricing which delivers investment where it is most needed – not where it is most politically expedient.
This measure will undoubtedly produce its fair share of controversy.
In its submission, the ALC recommends that in order to manage that, it will be important to have a respected, independent umpire in charge of making pricing decisions. The ALC suggests that the Australian Competition and Consumer Commission (ACCC) is the most appropriate body.
To ensure its effectiveness as an independent economic regulator for the transport sector, it may be prudent for the ACCC to appoint a specialist Commissioner to deal with transport and logistics issues.
Further, the ACCC should establish a specialist unit to identify regulatory issues in the transport sector, working closely with industry stakeholders and state and local governments to ensure a pricing approach that delivers the right investment outcomes.
Freight Doesn’t Vote does not shy away from recommending initiatives that may prove to be politically challenging in the short term – particularly when it comes to having greater Commonwealth involvement in planning, as well as road pricing and investment reform.
The political challenges associated with pursuing difficult reforms now, however, will be as nothing compared with the political and economic pain that will be the lot of future governments if we fail to get the policy settings right today.
This article first appeared in the August/September issue of Logistics & Materials Handling.
By Michael Kilgariff, Managing Director, Australian Logistics Council.
Speculation about the impact of Amazon on the Australian retail market kicked up a notch in late June, when news emerged that the company had acquired upscale grocery chain Whole Foods – effectively acquiring ‘bricks and mortar’ stores in strategic locations across the United States.
Many local industry participants are now wondering precisely what that might mean for the retail sector here in Australia, given Amazon’s well-publicised plans to expand in this country.
Yet, for all the time and space this and similar developments occupy in news pages and on television, most of the commentary on the issue is driven by speculation.
At the same time, comparatively little attention is being given to another significant change coming our way – one which won’t just impact freight logistics operators, but also anyone that uses their services.
Granted, it’s not in the shiny form of an app, or a big new market player, or drones delivering groceries straight to the balconies of high-rise apartment buildings in our cities.
Although the coming changes relate to something far more down to earth, they are far more relevant to the day-to-day operation of businesses.
Despite that, awareness and coverage of the issue to date has been astonishingly low.
The forthcoming changes to Chain of Responsibility (CoR) laws, which are due to come into effect in mid-2018, will have an impact on the operations of businesses throughout the economy – not merely in the transport sector.
Accordingly, now is the time to become familiar with exactly what those changes will mean for your business – and establish appropriate systems within business operations to ensure compliance.
For those who may be unfamiliar with its operation, the Heavy Vehicle National Law (HVNL) sets the rules that ensure vehicles of more than 4.5 tonnes in weight operate in a safe manner in all states and territories of Australia (except Western Australia and the Northern Territory).
Under its provisions, if you consign, pack, load or receive goods as part of your business, you can be held legally liable for breaches of the HVNL – even if you have no direct role in driving or operating a heavy vehicle.
In addition, corporate entities, directors, partners and managers are deemed accountable for the actions of people under their control.
This is what is meant by the ‘Chain of Responsibility’.
The aim of the CoR laws is to make sure everyone in the supply chain shares equal responsibility for ensuring breaches of the law do not occur.
Under CoR, if you exercise – or have the capability of exercising, control of or influence over – any transport task, you are part of the supply chain, and therefore have a responsibility to ensure the law is complied with.
The law also recognises that multiple parties may be responsible for offences committed by the drivers and operators of heavy vehicles.
By way of example, let’s consider consignors and consignees of goods.
Effectively, the HVNL is designed to prevent consignors or consignees from pressuring a transport operator to engage in unsafe behaviour, such as speeding or driving long distances without adequate breaks.
If a driver is found to have broken speed limits, or driven in a fatigued state, everyone who was responsible for requiring the driver to undertake a long journey in an unsafe manner could be prosecuted under the national law.
This is because consignors and consignees are required to take all reasonable steps to ensure that drivers don’t speed or drive whilst fatigued. The current maximum penalty for failing to do this is $10,000.
Furthermore, this responsibility extends to directors who either authorised or knew – or ought to have reasonably known – about unsafe transport requirements. That said, it is considered an acceptable defence to show that parties such as directors have shown reasonable diligence in ensuring that the law is complied with.
Accordingly, if you are in a business that deals directly with transport operators to either send goods to clients, or to receive goods from suppliers, you should make certain you have a well-documented set of procedures establishing business rules requiring goods to be transported in a fashion that doesn’t compel drivers to act in a reckless manner.
It would also be prudent to ensure that the executive board establishes reporting requirements that measure how well these procedures have been adhered to.
Having appropriate procedures in place will become vastly more important when the amendments to CoR laws commence operation in the middle of 2018.
These changes are designed to align CoR more closely with workplace health and safety (WHS) laws.
Under the new regime, a primary duty of care will be introduced for supply chain participants to ensure, so far as is reasonably practicable, the safety of ‘road transport operations’, with executive officers (such as directors) having the primary duties regime applied to them through a positive due diligence obligation, similar to that imposed by WHS law.
Essentially, this means that if you or your company operates, loads, drives, sends or receives goods using a heavy vehicle, you will effectively have the same responsibilities as you presently do under WHS law to ensure that the CoR under the HVNL has not been breached.
This means you will need to make certain all reasonably practicable steps are taken to ensure vehicles are properly loaded and goods secured, and that drivers undertake their responsibilities in a safe manner.
This underscores the need to ensure that properly documented road transport practices are kept, and that your organisation’s executive board is kept properly informed as to compliance with these measures.
Yet, in a survey undertaken by the Australian Logistics Council (ALC) in April this year, 50 per cent of respondents did not believe their organisation understood the changes coming to CoR.
Even more worrying was the fact that 90 per cent of respondents were unable to say the CEO of their organisation fully understood their obligations in respect of these matters.
Given the clear lack of knowledge about CoR and the operation of the HVNL, it’s evident that far more needs to be done to support industry in meeting its obligations – and time is of the essence.
Considerable efforts are now under way within the freight logistics industry to help make this happen.
The HVNL permits the development and registration of registered industry codes of practice.
People who can demonstrate compliance with a Code can use this as evidence to prove they have taken all reasonable steps to ensure the discharge of their safety obligations.
The ALC and the Australian Trucking Association (ATA) are now working together to develop a registered industry Master Code of Practice designed to assist freight and supply chain participants in complying with their CoR obligations.
It is the intention of the ALC and the ATA to have the new Master Code ready when the changes to CoR come into effect in mid-2018.
This will help provide certainty for the industry and promote higher standards when it comes to heavy-vehicle safety – which is in the interests of all road users.
The Master Code will help meet and manage the common risks faced by all heavy-vehicle operators, and help reduce red tape and compliance costs.
Given that 98 per cent of trucking businesses have fewer than 20 employees, and that other relevant road parties such as consignors and receivers also have HVNL obligations, establishing a Master Code is a practical way to help responsible parties manage safety risks.
Work on developing the Master Code is now well under way, and the ALC will be working with the ATA to keep industry fully informed as to its progress.
A particularly significant stage of its development will be the 2017 ALC Supply Chain Safety & Compliance Summit [please note, this event has now passed, read a full review in the December 2017 Logistics & Materials Handling].
Taking place in Sydney, 5–6 September, this event will provide an opportunity for participants to have direct input into the Master Code’s content, though a series of workshops focusing on management of speed, fatigue, load and maintenance issues.
All organisations with an interest in improving supply chain safety should register to attend, and make sure their views are heard as the Master Code is developed.
The Australian Road Transport Suppliers Association (ARTSA) is bringing domestic and international logistics leaders together under one roof for the ARTSA Global Leaders’ Summit – an integral feature of MEGATRANS2018.
Global disruption – a phrase making the rounds in the global and national logistics and supply chain industries – is a broad expression of some of the technical innovations and advancements changing how goods are moved from point of origin to their destination.
The Global Leaders’ Summit, run in conjunction with multi-modal trade show MEGATRANS2018 in May next year, aims to explore this term and just how the Australian and international supply chain can thrive in this new age of Industry 4.0, the Internet of Things and the like.
Key questions the Summit aims to address include:
- What are the disrupters and drivers?
- What does disruption mean for freight and logistics?
- The current status of disruption in Australia and globally?
- Is our industry prepared for global disruption, and how do we exploit it?
The event will cover disruption and its relevance within the global marketplace, while providing an engaging platform for solution providers and heavy-fleet operators to discuss and engage, alongside freight customers, disruptive trends in the market. These include: harmonisation, automation and autonomous vehicles, ownership of companies and equipment, road pricing, environmental regulations, new propulsion systems and human resources.
Michael Byrne, CEO of logistics company Toll Group, supports the establishment and rise of tolls in Australia’s main cities, so long as operators do not rake in “outrageous” returns, he told The Australian Financial Review (AFR).
When asked whether Toll would consider a similar strategy to that suggested by logistics magnate Lindsay Fox, to have trucks diverted through residential streets in protest over rising toll charges for major routes such as CitiLink, Byrne noted that the company’s 16,000 would not be operating on local roads.
“Someone’s got to pay,” he said. “You can’t say you want this infrastructure to be more efficient and then not pay for it.”
He added that transparency of toll fee revenue and calculations would be key.
“We want to see people have a return on the capital invested in public companies that run toll roads, but we don’t want it to be an outrageous return,” he said.
“That’s up to government to regulate.”
Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), should take over regulating toll road and landside port charges, Ben Maguire CEO of the Australian Truck Association said on 28 July.
The Australian Government is considering setting up an independent regulator to control truck and bus registration charges and road user charges that truck and bus operators pay on fuel.
Maguire commented that the independent regulator – ultimately the ACCC – should be responsible for toll road and landside port charges as well.
“Toll road charges for trucks are growing rapidly,” he added. “Small trucking businesses simply cannot afford them. Although these charges are set by state governments, the arrangements for setting them are not transparent and do not take into account costs across the supply chain.
“The ATA and its members have similar concerns about landside port charges.
“Earlier in 2017, DP World unilaterally increased the infrastructure surcharge at its Melbourne terminal and imposed a new surcharge of $21.16 per container at its Port Botany terminal. ATA member association Road Freight NSW pointed out that the Port Botany surcharge could cost carriers up to $150,000 per year.
“Separately, Patrick increased its existing surcharges this month, and introduced a $4.76 surcharge per container at its Fremantle terminal and a $25.45 surcharge per container at its Port Botany terminal.
“These charge increases cannot be avoided by trucking operators – they have not been subject to detailed regulatory scrutiny, they simply build additional costs into Australia’s supply chains.
“To fix these problems, heavy-vehicle tolls and landside port charges should be set by the road-price regulator, which should ultimately be the ACCC or a dedicated body established under its Act.”
Maguire said governments must start the reform process by fixing the overcharging of truck and bus operators.
“Truck and bus operators will be overcharged by $264.8 million in 2017–18. The meter is ticking up by more than $725,000 per day,” he noted.
“It’s time for governments to take action and stop overcharging the hard-working small businesses that make up the vast majority of operators in our industry.”
Thousands of Australians servicing aviation, including freight forwarders and airport staff, will soon be subject to federal background checks, with new laws covering US-bound cargo coming into effect on 1 July 2017.
Since 2005, individuals working unescorted in airport security zones have been required to obtain and display Aviation Security Identification Cards (ASIC) as proof of having undergone a valid background check.
New Federal laws coming into effect on 1 July will require many new classifications of workers supporting the aviation industry – such as freight forwarders and known consigners – to possess higher level security ID, if operations involve US-bound air cargo.
Australian technology company Veritas has received Federal Government authorisation to provide ASICs for individuals supporting the aviation sector.
Stephen Inouye, Managing Director, Veritas, said, “This milestone enables Veritas to extend our technology-enabled security registration services from the maritime and offshore sectors to the aviation sector, thereby helping companies achieve compliance with minimal impacts to operations.”
Inouye noted that from July, only white ASIC holders will be permitted to handle and screen Australian cargo bound for the US.
“Veritas has the systems in place ready to assist thousands of airport staff and freight contractors who, potentially, now need to urgently undertake background checks in order to receive their white ASIC to make sure freight is on planes bound for the US in time,” he said.
“The Office of Transport Security – administered by the Federal Government’s Department of Infrastructure and Regional Development – has identified 11,000 companies which could be impacted. Many Australian employees, particularly of logistics companies and transport operators, may now need white ASIC cards.”
With just over a week until the Victorian Transport Association’s (VTA) annual State Conference in Lorne, the peak freight industry representative body has revealed the full list of speakers that will address delegates over the two-day event, June 4–6.
New keynote speakers include Simon Thomas, Director – Programme Delivery, Australian Rail Track Corporation (ARTC); Jonathan Dexter, Australia National Sales Manager, Viva Energy; Max Kruse, Chief Operating Officer, DP World Australia, Ian Matthews, Regional Operations Manager, WorkSafe Victoria; and CMV-Volvo Product Manager Thiago Leal.
These addresses will be supplemented by panel presentations and discussions from a mix of equipment manufacturers and suppliers, insurance and finance providers, human resources, and superannuation and legal experts.
“Productivity impediments remain the number-one barrier to transport operators being more successful, which is why we’ve built the program around a group of expert presenters and topics that can help delegates improve their operation’s KPIs across the board,” said Peter Anderson, CEO, VTA.
“The program reveals an interesting mix of keynote addresses and presentations from politicians, regulators and industry leaders, supported by several panellists that will share insights and learnings on key productivity drivers of technology, safety, people, customers and equipment during a number of interactive discussions.