Client/consignor requirements as to delivery times, responsibility for driving hours, driver performance and remuneration for drivers

3.2.4.1 Introduction

We’re in a better position than a lot of people because we own our truck and we’re just paying off for our second motor and we’ve nearly come to the end of that so we can turn around and say no we don’t want to do the work. But we have at times been turned round by people who’ve said to us “if you don’t get there by say eight o’clock tomorrow morning you get docked a hundred dollars off your amount.” I’ve just turned around, or my husband has turned around and said “take it off because we don’t need that pressure.” This is the sort of pressure that the truck owners are getting… (oral submission, wife/business partner of

owner/driver, Queensland)

The Inquiry received submissions from a wide range of other parties arguing clients (both load owners and load receivers) and consignors were putting undue pressure on both transport companies and individual drivers in ways that compromised safety. This included submissions from parties with no vested interest in ascribing a particular cause to speeding and other offences. For example, the written submission of the Traffic Services Branch of the NSW Police attributed a rise in the number of speeding infringement notices to the inability of some sections of the heavy vehicle industry to set realistic schedules and attempting to circumvent existing on-road enforcement measures.

The point about client pressure was also made in submissions from government agencies in other jurisdictions such as WA Transport:

Getting clients to be more responsive to the needs of truck drivers is a significant issue. We have spoken to a number of large users of freight services in the State to make them aware of the role they play. We point out there are three issues they face if they require delivery times that compromise safety and the standards in the Code. They are if there is a crash:

• the actual loss of their freight

• a tarnished image

• potential for being sued for damages

There are other things customers’ can do to help drivers including managing queues and providing access to facilities. Feedback from operators is that they need some assistance to

explain the position to customers and we will be producing a brochure explaining customer responsibilities that the industry can use to more effectively negotiate with customers.

Already a number of major transport users in the State will only use operators who have a fatigue management system in place (written submission, Lance Poore, Regional Policy

Section, WA Transport).

Not all submissions accepted that clients as well as consignors and load receivers placed unreasonable expectations on operators and drivers on a regular or systemic basis. Further, as in other areas the very complexity of the transport supply chain means that it is not always clear for which party the pressure is originating or if the pressure results from commercial pressure, incompetence or favouritism in the awarding of freight tasks. The Inquiry received submissions alleging all three factors played a part and the perception of the key players could be determined very much by where the operator or driver was located (ie as a principal contractor or an owner/driver). In its submission the ARA highlighted a number of these points, including the influence consignors might exert independent of the time frames established by the retailer and the need to educate staff making decisions, especially in the context of chain of responsibility legislation.

The feedback we’ve had in relation to consignment agents is that quite often the lead time’s appropriate but the problem is the consignor or the freight forwarder takes time… They take some commercial decisions as to how they are going to get it delivered and quite often by the time the deals done a lot of the lead-time has been eroded and therefore it becomes unreasonable. And so all the owner/driver sees is the fact that they’ve got this unreasonable delivery time. Now you’ve got to ask if that’s our fault or is it the broker’s fault. Our understanding is that when we enter into an arrangement for delivery whether with the principal contractor or a consignor that we would be expecting the delivery to be done in the context of the law. If chain of responsibility comes in and people …aren’t conscious of the ramifications of if you breach well that’s something their going to have to learn to live with. And it’s a key issue for us to educate people and our people that when they are arranging these things they have to act in accordance with the law .. We’ve got no evidence that anyone would force someone to deliver in a way that would make them break the law. However, it may be from time to time they don’t consider the implications … (oral submission, Bill

Healey, ARA).

Other issues to arise include how a customer might instruct a loading agent or consignor about what to do in the case of an unavoidable delay or whether this responsibility should reside entirely with the consignor or agent. It is not difficult to envisage situations where commercial interests might discourage a consignor from informing a customer that it was necessary to reschedule a freight task to a time later than originally proposed. Equally, those staff of a customer charged with arranging transport directly may not wish to be seen to ‘fail’ to meet a deadline. It is perhaps at this point that the need for establishing an environment where such pressures don’t have serious safety consequences is most apparent.

While all these complications need to be recognised, evidence presented to the Inquiry and detailed below overwhelmingly indicated that customers frequently placed expectations on long haul truck operators and drivers that placed them under some pressure to say the least. The Inquiry received a number of very detailed submissions, illustrating the connection between client expectations and safety in particular sectors of the long haul road freight industry. A number showed how client expectations were shaped not simply by insensitivity to the needs of transport companies (although this certainly was a factor repeatedly identified) but by their own commercial interests and market pressures. The complex array of factors that shape transport arrangements, including scheduling pressure on companies, is well illustrated by the case of one company that is arguably typical of the fresh produce market.

3.2.4.2 Transporting Fresh Agricultural Produce: An Example

The company is a medium sized, and generally acknowledged as an efficient and responsible transport operator located in an agricultural district outside NSW but whose operations typically involve bringing agricultural produce into NSW, including the Sydney fruit and vegetable market. Figure 3 provides a simple illustration of the relationships involved – in this case fairly simple because the company concerned does not employ subcontractors and has a long-term relationship with growers.

The producers in this region grow crops sold throughout Australia, with some produce being exported. These growers normally deal with a produce agent who organises sales to chain stores, markets, individuals and others. Produce prices are volatile and may alter on a daily basis leading to substantial variations in returns to growers. At the other end of the chain, price variability and perishability of goods makes stores keen to minimise potential product loss by carrying as little stock as possible. In combination, these demands result in strong pressures on transport companies to deliver promptly (usually over-night and with scheduled arrival early in the morning) and at short notice (with trucks often being left waiting while produce is picked). These pressures exacerbate pressure on drivers.

Since markets, stores and individuals control times for delivery, logistical planning by the transport company, including driver shifts, has proved extremely difficult. Services must be highly reactive to highly tuned customer needs for just-in-time delivery in a very competitive market. The grower will wait for the most opportune ‘price-window’ to harvest and transport their produce for sale at the most profitable destination (creating uncertainty in this regard as well). Once the driver arrives, they must often wait without facilities or opportunities to rest and having to arrange a load for the return journey. In its submission, the company stated:

Due to competition and an over supply of reactive services past and present, it has become somewhat the “expected” for [the] driver to drive directly through to the destination for their customers. Whilst this may have been done in exceptional circumstances and as a favour for a particular customer/grower, it has unfortunately become somewhat the norm and not the exception.

Lack of communication between the agent – grower – receiver and Transport Company always exists, often transport is arranged by the agent, but can also be booked through the grower. Whilst there are “Duty of Care” provisions in the legislation more often than not a lack of understanding and education is displayed. People’s general perception is that “It won’t happen to me”. (written submission, medium sized interstate transport company).

The company argued that the growth of e-commerce was, if anything, increasing the pressure on transport operators by providing businesses with greater ability to manage their stock flow over time and thereby reduce inventories.

The trend now within the industry where fresh produce is concerned is to hold as minimal quantity of stock on hand as possible, This ensures the product is fresh and last the longest period of time thus maximising return on investment. This shift has created more “just in time delivery” with minimal operational error or even built in allowances. The fluctuation in demand for product makes it difficult to predict quantities, thus creating under or over supply, placing extra demands on drivers.

Due to the decrease in stock levels this has also seen smaller amounts of freight being delivered to more customers. This in turn creates additional loading and unloading as well as extra driving requirements. Many freight forwarders use the services of interstate drivers to

collect freight from other areas to make up a particular load for the vehicle.(written

submission, medium sized interstate transport company).

In recent years the transport company has made significant efforts to improve safety (being accredited with TruckSafe and also being a participant in a pilot fatigue management scheme). In its efforts to address the problems just identified, the company has tried to come to arrangements on scheduling etc with its clients and other operators. The company got in a level of agreement although one national carrier refused to cooperate. The latter problem is a recurring limitation with voluntary schemes since even one dissenter has the capacity to unravel the agreement especially they gain a commercial advantage from this refusal or threaten the business of other firms – which is often the case. There is also a concern that such arrangements could be deemed to breach the Trade Practices Act.

The firm has tried to educate its clients, by identifying “Duty of Care” legislative requirements and problems arising from a lack of planning by growers, to ensure the product is ready for transport when the truck arrives (leaving the driver waiting for extended periods or having to undertake loading). Other problems raised by the company include attempts to force overloading (since growers are paid by weight but transport is charged according to pallet space), extremely tight delivery times due to delays at farms, lack of sleep for drivers and possible infringements.

Despite these and other efforts the company was concerned that the issue received insufficient attention in the media, customer newsletters and safety programs.

It makes it increasingly difficult when the common catch cry is “If you don’t do it, I will find another company who will”, and so competition rears its ugly head’ (written submission from

the company, a medium sized interstate transport operator).

The claim that transport operators who refused to meet customer demands on scheduling or other matters were threatened with the customer taking their business elsewhere was made repeatedly by transport firms in the course of the Inquiry. It was a claim repeated by many drivers, the TWU, CFAT and others. In more than a few instances, a specific example was cited to support the claim and this was invariably the case when the Inquiry asked for more evidence that the practice was occurring. As discussed elsewhere, a number of transport operators had also tried to educate their customers about their operating costs (by opening their books etc) in order to get them to acceptable higher freight rates. Though not without a degree of success, virtually all these operators reported losing business as a result.

In combination with other evidence (see below) the Inquiry came to the view that many customers show no understanding of the consequences of their demands in relation to delaying trucks when loading and tight delivery schedules. Given intense competition amongst transport operators, attempts by some companies to educate their clients or come to arrangements were at best only partially successful. Further, customer attitudes were clearly framed in a context where there was no recognition whatsoever that they might bear any legal consequences for such behaviour.

At the same time, this case illustrates that in, some industries at least, there are strong commercial pressures on customers to behave in ways that make it very difficult if not impossible for transport operators to meet their demands safely. In other words, this is a structural problem where voluntary measures and goodwill alone are very unlikely to succeed. Rather, what it needed is a means of ensuring these commercial decisions are framed with

PRODUCE