Express transporter believes plan to reform owner-driver remuneration will force 30 per cent increase in rates.
A leading express transporter believes rates paid to its owner-drivers will need to rise by as much as 30 per cent if proposed changes to contractor remuneration are introduced.
Border Express has warned the Road Safety Remuneration Tribunal (RSRT) of possible adverse consequences from its plan to mandate minimum pay rates for owner-drivers.
The tribunal wants to set minimum hourly and kilometre rates for owner-drivers involved in supermarket and long distance work.
The payments, if introduced, will be based on a drivers classification, the work they are performing and the equipment they are providing and also guarantee payment for rest breaks, waiting and loading or unloading time.
Border Express, which operates a national transport and warehousing operation from New South Wales, says it uses 90 contractors and 13 owner-drivers for linehaul work, and another 70 owner-drivers for local deliveries.
“If the order is made in the proposed form, the rates which are paid to our road transport drivers will need to be increased by 18-30%,” Border Express managing director Grant Luff writes in a submission to the RSRT.
Luff has highlighted the number of administrative changes his company will have to make if the RSRT goes ahead with its plans, adding that Border Express may no longer use owner-drivers as a result.
“If an order is made in accordance with the terms of the draft order, Border Express would seriously consider reverting to a fleet only comprised of employed drivers,” Luff says.
Express transporter believes plan to reform owner-driver remuneration will force it to increase rates by as much as 30 per cent.
Posted by Owner Driver on Sunday, 18 October 2015
“On current estimates, the proposed rate increase, administrative costs associated to managing the payments and the investment into software and telematics systems to administer the proposed changes would outweigh the recoverable costs from suppliers to continue to engage owner drivers.”
The RSRT will this week hold hearings on its proposal and the submissions the industry has lodged in response.
It has flagged a start date of January 1, 2016, but Luff says this does not give Border Express enough time to review and renegotiate rates with its customers to allow it to recover any increases in costs.
“A significant amount of time is required to identify, integrate and implement a new software program for managing the proposed hourly and kilometre rates, a payroll system will be required to be sourced as a the current system allows for either an hourly payment or a trip payment,” he says.
Luff says Border Express pays its owner-drivers by trip, not by the hours taken to do a job.
The RSRT is holding hearings in Melbourne from October 22 to 25 on its rates proposal, which the Transport Workers Union (TWU) broadly supports but wants a higher hourly rate for owner-drivers.
The union has rejected claims that the RSRT’s plan will lead to companies no longer using owner-drivers.