ALC National Operating Standard proposal under fire

In this two-part feature, we examine at the ALC’s National Operating Standard proposal and the opposition to it

It seems an impossible distance to span. The space between the Australian Logistics Council (ALC) and the trucking organisations under the Australian Trucking Association’s (ATA’s) umbrella – not to mention individual truck and truck fleet owners – over what is called the National Operating Standard (NOS) is subject to the stiff winds of suspicion, annoyance and rejection.

Building a consensus after repeated failed ALC attempts to get traction on ‘operator licensing’ (OL) looks as if it will need the wisdom of Solomon and the patience of Job.

The trouble is, the ALC has precious little time for patience just now.

The federal government has a mid-year deadline for consultation on a reformed Heavy Vehicle National Law (HVNL) and the ALC wants the NOS within it.

But this appears well-nigh impossible without industry agreement and the sudden emergence of NOS in November, some five years after the last OL stoush, appears not to have helped, given responses from state and federal associations.

“As the Productivity Commission said in its recent report on national transport regulatory reform, governments should prioritise uses of data with the greatest potential to improve productivity in the transport sector in ways that can inform the provision and management of road infrastructure, inform decisions around permits and road access for heavy vehicles and assist in the development and implementation of the Heavy Vehicle Road Reform Agenda, with the information possible forming part of the proposed federal Freight Data Hub,” now-outgoing ALC CEO Kirk Coningham said at the time, before taking the proposal to the National Heavy Vehicle Regulator (NHVR) in January.

“It will be an opportunity lost if the national operating standard concept is not tested in a holistic way as governments considers responses to the regulatory impact statement.” 

But the hiatus between the announcement and emergence of details in January and February saw initial industry responses treat NOS as OL in all but name.

Then-ATA acting CEO Bill McKinley said the ALC’s proposal would be a $3.6 billion tax on freight and jobs and impose massive costs on trucking operators.

“Under the ALC proposal, operators would be subject to mandatory electronic recording of driving hours and the location of every heavy vehicle. Every heavy vehicle operator would need to have a safety management system,” McKinley said.   

“The ALC has failed to provide any numbers on the benefits and costs of its proposal.

“In reality, operator licensing is fundamentally anti-competitive.

“It would be an unfair tax on hardworking small and family businesses, with no demonstrated safety benefits. It certainly wouldn’t do anything to help the industry’s customers understand and comply with their safety duties.

“Operator licensing was a bad idea when it was last considered – in 2003 – and is still a bad idea now.” 

WHAT IS IT?

Without the details, that was to be expected, but what actually is the proposal?

It can be distilled into four parts that would see any heavy vehicle operator:

• provide the NHVR with a list of heavy vehicles it operates and garaging information about the vehicle
• ensure that each heavy vehicle has installed, and uses, equipment meeting international standards that records information regarding driving hours and location that can be used in the investigation of alleged breaches of the HVNL, as well as providing operators with data that can be used to manage safety outcomes or otherwise provide road owners with information that can be used when applying for access to routes
• maintain a safety management system (SMS) that meets standards established in the HVNL
• require a registered operator to have capital available to ensure efficient operation of the heavy vehicles.

But there are devils in the detail that are subject to disagreement, such as the cost of hardware and software the ALC put at $2,500 and $30 a week per truck and four times as much by the ATA.

As this would be for all heavy-duty trucks, as ALC policy and advocacy director Rachel Smith, pictured below, confirms to ATN, it would take in those vehicles where telematics is presently not used or needed.

As Smith, who came to her present position last August, explains it, the NOS is a trucking safety initiative – in support of the same objectives as the HVNL – that saw its genesis in 2016 in response to alarm over the rate of truck-related road fatalities.

She insists NOS is a separate beast from OL and, in late February, the ALC moved to make that plain, noting that the Australian Government Guide to Regulation describes licensing as a ‘pre-market assessment scheme’, while NOS differs from it in that:

• NOS can immediately commence to operate, so long as compliance with the NOS can be demonstrated, if called on, while, under OL, there must be proof to a regulator that all licensing conditions are satisfied before being allowed to operate
• there is no ‘fit and proper person’ requirement
• there are no registration fees.

“What the National Operating Standard does do is to make clear to operators what is necessary to ensure the safe operation of vehicles in much the same way as an operator must comply with regulations prescribing the standards for compliance on road or driving hours limits,” the ALC argued.

SOMETHING FOR EVERYONE

It also clarified that all trucks would be involved.

Along with proof of capital to undertake necessary maintenance, one NOS aspect the ALC is definitely keen on is the inclusion of safety management systems (SMSs).

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Read about Andrew McKellar’s appiontment to ATA CEO, here

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“Having the NHVR develop a common set of SMS standards would also lead to productivity gains through a reduction in audit duplication – an audit of an operator’s safety systems conducted by a qualified auditor using the common SMS standards should be able to be relied on by all parties in the supply chain,” it says.

“This also means that the development of an auditing framework which establishes appropriate auditor qualifications and practices should form an integral part of the HVNL reform.”

Regarding applicable vehicle class and the approach to rolling in legislation, the ALC suggests that a simple and effective way to introduce it would be to a phased application over three years from the day of legislation.

This would involve:

• fatigue-regulated heavy vehicles, as per the National Telematics Framework, to carry telemetric equipment compatible with standards recognised by the National Telematics Framework 12 months from the day legislation imposing the requirement commences
• vehicles between 8 and 12 tonnes gross vehicle mass (GVM) two years from the day the legislation imposing the requirement commences
• vehicles between 4.5 and 8 tonnes GVM three years from the day the legislation imposing the requirement commences.

Smith reiterates the ALC position that if NOS strictures are good enough for New South Wales coach owners and other heavy industries, there is no reason why they should not be mandatory for other heavy vehicle operations.

But it would be ‘scalable’ to the size of trucking businesses.

“That’s the key message,” she says.

“It won’t be a one-size-fits-all approach. So, obviously, your big players, your Tolls and your Linfoxes, their operating standard is going to be much more sophisticated than your one-truck operator.”

And, as indicated, it would be for any truck owner, including ancillary fleets.

“We feel everyone should be held to the same level of account in terms of safety and that will actually increase the competitiveness in the market as well in that everyone will have to comply with a base standard for safety.”

Though NOS would be mandatory, Smith insists both the ALC and the NHVR agreed it would not be a “policing tool”, saying it is a “risk-management system, not a compliance system”. 

On the need for such as system, she points to public expectation that the ALC has encountered in its discussions on the topic that assumes all the aspects of NOS already exist in the trucking industry.

One of the planks the ALC uses to prosecute its case is the weaknesses of accreditation schemes, as identified in the Peter Medlock-led review that published the Report of Heavy Vehicle Accreditation Working Group.

The ALC effectively charges that heavy vehicle accreditation is broken, due to the cost, the lack of reduction in enforcement activity of accredited operators and the poor quality of auditors.

But Smith was unclear on what it would mean for them or why, if the NHVR has trouble with accreditation, it should have carriage of NOS.

PROBLEM AT THE SOURCE

One of the very few obvious carrots that might possibly attract trucking to the NOS is the hope that it will alleviate a range of customer demands of adherence to those customers’ own risk-management solutions.

But a common complaint is that those making such demands to fleets and truck owners are also ALC members and little has been done to harmonise those.

Much trucking criticism now and in the past also is that the ALC seems blind to what is regarded as its members’ contribution to safety shortfalls through the pressure of their demands and the handling of trucks and their drivers at their facilities.

A common refrain is that they need to “tidy up their own back yard” before seeking to preach to the industry.

But Smith points to the Registered Industry Code of Practice (RICP), known as the Master Code, which both the ALC and ATA developed through joint body Safe Trucking and Supply Chains Limited.

“By having a National Operating Standard, we are hoping it will drive Master Code discussions so that people are held accountable to the same set of standards and not multiple different sets of standards,” she says.

She adds the hope is to have “a baseline set of [auditing and compliance audit system] standards that those audits are built upon, so that then there is consistency across the industry and operators are being audited under frameworks that would require different standards to be achieved”.

The lure for customers to this would be cost reductions and regulatory protections gained from adhering to such national consistency.

Despite the heat the concept is generating, Smith sees the NOS as an “evolving conversation with industry” and states that the ALC was taking on board feedback from the industry on the proposal.

REGULATORY REVIEW

If NOS is to have the barest chance of getting up in the face of trucking industry opposition, fierce national regulator backing is essential.

But the NHVR’s position on NOS and, previously, the OL has been respectful if lukewarm.

Five years ago, it said it was too early to tell if OL was a likely outcome at all.

Of the four options identified in the HVNL regulatory impact statement (RIS) consultations – voluntary operator enrolment, mandatory enrolment, operator licensing (all operators) and operator licensing (high risk operations) – the NHVR’s  submission states that this “would be better addressed through a review of the current registration and licensing systems”.

“The NHVR supports data-driven and risk-based regulation that recognises the safety focus and maturity of much of the transport industry and broader supply chain,” CEO Sal Petroccitto, pictured below, tells ATN.

“The NHVR believes many of the potential benefits of operator licensing could be achieved more simply and effectively by other approaches.

“For example, instead of introducing an entirely new licensing regime, which would introduce considerable costs, investment would be better targeted at improving the current licensing framework.

“We believe that providing industry with Codes of Practice that are relevant to each operator’s size and operations would encourage increased adoption of safety management systems.

“Most of the industry recognises that safety management systems are an effective way to manage hazards and risk and the NHVR believes all operations should have an established SMS.

“Importantly, we see national consistency as the end goal, with all players accountable for their actions and obligations under the law.”

Even if the ALC fails this time, it has shown tenacity in its approach over nearly two decades in the cause. Knowing this, the trucking industry is unlikely to be tempted to relax about it.

In Part 2, due in the May edition, ATN will examine the trucking industry’s views on NOS in detail.