Toll to consider if using owner-drivers is ‘commercially feasible’

By: Rob McKay


The introduction of minimum rates for owner-drivers will require Toll to examine its use of contractors.

Toll to consider if using owner-drivers is ‘commercially feasible’
Toll says the cost of engaging owner-drivers is likely to "significantly increase".

 

The future of the biggest transport and logistics firms’ policy towards contractors, subcontractors and owner-drivers is still unclear following the Road Safety Remuneration Tribunal’s (RSRT’s) recent decision to mandate minimum rates.

But there is little doubt the issue is being considered very seriously in light of the tribunal’s ruling, which will set rates for owner-drivers working in the supermarket distribution and linehaul sectors from April 4.

"Toll is still analysing the impact of the order, but it seems likely to significantly increase the cost of engaging owner-drivers," a company spokesperson says. 

"This will inevitably require Toll to consider whether it is commercially feasible to use them. 

"In its evidence to the tribunal, Toll foreshadowed the possibility of reducing its owner-driver fleet if the effect of any order was to increase our operating costs."

Together with Linfox, Toll put together a submission to the RSRT during consultation on minimum rates backing the general thrust but highlighting their concerns on the direction it was heading.

In her ruling setting out the structure of minimum rates, RSRT president Jennifer Acton noted that Toll and Linfox’s proposals would have – if implemented – lowered existing rates for owner-drivers.

Acton based her comments on evidence Toll managers presented to the tribunal during consultation on owner-driver remuneration.

However, Toll has rejected Acton’s analysis.

It says the submission tried to assist the tribunal to set rates in the supermarket distribution sector "that reflected market and economic realities".

"Our aim was to derive rates that would allow a driver to receive a fair wage based on relevant Award levels and to achieve cost-recovery on the running and fixed costs of providing a vehicle," the spokesperson says.

"It’s true that some of the rates suggested by the submission are at levels below that paid in certain parts of Toll’s business, but impugning our submissions based on evidence regarding current Toll rates misses the point. 

"We believe that the tribunal should establish appropriate and fair minimum rates for the entire industry. 

"To benchmark rates against what a single transport operator pays is inappropriate, especially when that operator is the largest in the industry. This will affect many more businesses than just Toll and Linfox so the benchmark needs to reflect beyond that."

Toll and Linfox’s position was based on hours per week, weeks per year and kilometres travelled, and the "realistic cost of providing and running a vehicle".

 "The entire submission sought to ensure that any order made by the tribunal reflected operational and economic reality for the whole industry," the Toll spokesperson says.

Toll and Linfox also encouraged the tribunal not to set rates for owner-drivers working in the linehaul sector.

"It is correct that we encouraged the tribunal not to set rates in the long distance sector. It was, and remains, our concern that the complexities of the sector and the wide variety of work it covers makes it imprudent to adopt a ‘one size fits all’ approach," Toll’s spokesperson says.

For Linfox, the issue has always been about safety and sustainability in a part of the business that is an adjunct rather than the main game.

"The business predominately operates a company driver operation, but does include owner drivers in its fleet composition to ensure it can provide customers the most effective and flexible service," a Linfox spokesperson says.

"Consequently it is always looking for operational improvements. The recent decision of the Road Safety Remuneration Tribunal has not altered this long held approach to the business."

Linfox says it has, from the outset, supported the RSRT setting rates in the retail sector and specific parts of the linehaul sector.  

"Further, the business has always held the view that a sustainable and safe transport industry is paramount and it continues to hold this view."

 

 

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