We’ve known for a long time that road transport is in dire need of reform.
It’s why the whole industry has come together to campaign for and win laws that will let us start making road transport better.
Road transport is more united than it’s ever been – but that doesn’t mean there are no opponents. Wealthy clients like Amazon and Aldi, and the employer groups representing them, always put up the same tired arguments. The one that comes up again and again is that increasing standards for drivers and transport operators will harm productivity.
But new research has shown that the opposite is the case. A report by transport not-for-profit TEACHO has revealed transport operators suffer as one of the lowest profit segments in the economy. What’s more, though road transport languishes with profits two-thirds less than the national average, the clients it provides services to have much higher profits.
This is despite road transport providing billions to the economy. Of course, this will not be surprising to anyone who’s working in road transport. As decades of research have shown, these low profits have huge flow-on effects for the drivers and operators carrying out the work in this industry. The new study demonstrates that large client profits are built by increasingly shifting work to cheaper, more dangerous operations.
The number of single contractors doing work is increasing, and increasing exponentially – and there’s nothing wrong with that in principle – but the problem is, it’s increasing in the wrong areas – like Amazon Flex, where there are absolutely no standards.
When the gig economy first came to our shores, the alarm bells were already ringing. We recognised as an industry that, with standards already going sharply downhill, we’d be left with nothing if something wasn’t done.
The combination of transport clients putting a deadly squeeze on contracts, and the lack of standards in the gig economy, has had devastating human and economic consequences – for not just the industry, but the whole Australian community.
As it turns out, the squeeze on transport operators and drivers, meaning drivers have to work increasingly longer hours, severely reduces productivity in the industry. The more hours a driver works, the more productivity declines. And the lower the wages, the less incentive there is for people to stay in the industry – again increasing the workload for those who are left, and further reducing productivity.
Unpaid queueing is the same story – not only does it disadvantage drivers and operators, there are efficiencies lost because of a lack of incentive to improve waiting times. As well as productivity loss, razor-thin profit margins have dire safety implications.
Transport operators and drivers forced to cut corners to make ends meet. We know how desperate the situation is. We are nearing 100 people killed in truck crashes in Australia just this year, 30 of them truck drivers. Over 600 transport-related businesses have become insolvent in the last financial year.
With deadly pressures on our roads and businesses going broke left, right and centre, it’s clear how drastically we need decent standards in this sector to save lives and improve productivity. The Aldis and Amazons of the world will argue the opposite – that we should have fewer standards. But we’ve seen what the research shows. And the people in this industry have lived experience of that. Of the long hours, the pressures to meet deadlines, the choice between vital truck maintenance or putting food on the table.
By the time you are reading this, a transport roundtable focused on productivity will have taken place.
The federal government, since it has been in power, has sat down and listened to several delegations of the road transport industry. That includes drivers, transport operators, large and small employers, industry associations and academics.
We now have applications in progress to put in place standards like maximum 30-day payment terms, rights for food delivery workers and a decent floor in the last mile sector to stop the race to the bottom.
What we will continue to make clear – as an entire industry – to the government is that these applications under the new system are well on their way to making significant change in road transport. Lifting standards in road transport will increase productivity. We have new research to prove it. But much more importantly, it will improve safety in the deadliest industry in this country.
We cannot continue to keep seeing this low profit squeeze from the top of road transport supply chains, with drivers and operators bearing the deadly pressure to work long hours, as well as low wages causing skills drain and critical shortages in the industry. This transport industry roundtable is another chance for us to keep making the case that we need decent standards. This is much more powerful as a united front and backed by research that shows low profits and long hours are a barrier to productivity.
It’s research that’s back by all corners of road transport – from clients like Coles to transport businesses like Toll and Linfox and by ARTIO, NatRoad and the NRFA. It was undertaken by internationally renowned academics Dr David Peetz from Griffith University and Professor Michael Belzer from Wayne State University after being commissioned by TEACHO.
With automatic rights now in place against unfair contract deactivations, and consultation on standards applications close to complete, we’re well on our way to seeing change in road transport. We’re not stopping there.
Next year the TWU has aligned over 200 Enterprise Agreements to expire right across transport, in road and in aviation. We need to see transport clients funding decent standards to see real gains in productivity, driver retention, safety and health outcomes. And whether they’re on board or not, we’ll do it in every possible way we can.
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