PREPARING FOR THE FUTURE

The transport sector in Australia is going through some very difficult times. Preparing now for the future can reduce the risk in your organisation, as reported by MARK WILLIAMS, Consulting Motor Risk Manager, OAMPS Insurance Pty Ltd.

IN the past 12 months many small to medium sized transport businesses ave failed as well as a number of larger transport organisations.

There are many underlying reasons for this, not the least being the revenue quality they were getting, the escalating costs and reluctance of customers to accept rate rises, especially with fuel, and the resultant adverse affect on cash flows.

Many banks have been less than helpful, and have placed restrictions on overdrafts and reduced lending facilities in line with reduced asset values.

In this uncertain environment it is important to learn from the mistakes of the past and a good time to prepare yourselves for the positive future that awaits, however to do so you will need to address a number of pressing issues currently facing the industry.

VIABILITY

To stay in business you need to know your costs and not accept rates that do not give you an adequate return on investment. You will need to demonstrate to your customers that the rates you are asking for will enable you to stay in business for the long term which will benefit all parties over time. If you are not getting the rates that are needed and you are not viable you will not be able to meet the other pressing issues facing the industry.

SHORTAGE OF TRUCK DRIVERS

The average age of truck drivers in Australia is 53 years. In most companies driver turnover rates are relatively high, (above 30%) and we have very low replenishment rates. It is a supply and demand issue and it is probable that employment costs will escalate well above the rate of inflation in the medium term.

Drivers are aware of that and are prepared to move around to seek better wages and conditions. In the current environment there will be a short term excess of drivers, a time when you need to sort out the good drivers from the not so good. This period will not last long so don’t lose any time preparing your future workforce!

As an industry we have a very restrictive point of entry for new drivers, given that it is not a recognised skill and has no scheme which encourages young people to come into the industry as would be the case with any apprenticeship. This needs to be rectified.

FUEL COSTS

It would be folly to think that fuel will not go up again when economies recover. The current respite will not last long as production and refining will be cut. The barrel price will probably recover above US$60.00 in the 2nd half of the year.

Developing countries, China and India will soak up enormous levels of energy as they continue to grow, resulting in higher prices for all commodities, not the least transport fuels. When this happens, learn from the past, be prepared, and recover immediately.

COMPLIANCE

Probably the most pressing issue for the industry to understand and respond to: All of what we are seeing at the moment has to do with a strengthening of OH&S laws and Government focus is absolute when it comes to matters of OH&S and CoR (Chain of Responsibility).

The vehicle for this in the transport sector is the NHVAS system (National Heavy Vehicle Accreditation Scheme) which incorporates three modules, being Maintenance, Mass and Fatigue.

Despite all of the publicity many companies are unaware/unable/unwilling to meet their responsibilities under this legislation. However, you do so at your peril.

WHAT DO THE LAWYERS SAY?

“The overwhelming majority of prosecutions against directors are against directors of small businesses, where they have regular or frequent contact with the day-to-day operations of the business.”

“Managers and supervisors, and even non executive directors, are also in the firing line and, as the law stands, the onus is on the individual to prove his or her innocence.”

“Where an employer is found guilty, managers and directors are automatically deemed to have also committed an offence, unless they canprove one of the defences.”

“Following company policy is not a guaranteed defence.”

“The Act stipulates individuals must either prove they were not in a position to influence the conduct of the corporation or used all due diligence to prevent the contravention.”

We are now seeing the start of some significant prosecutions for non conformance to the legislation’s that have been introduced. When the new fatigue management laws are fully implemented we will see a lot more.

Companies can be completely wiped out, lives destroyed, if found guilty against these requirements.

Being compliant in this industry is not about being in the Fatigue Management Programs just so you can maintain 14 work hours per day, it is much more than that.

It is about meeting your obligations under the Chain of Responsibility and the application of OH&S procedures within your business.

It is folly to risk all of the hard work over the years by not embracing what has to be done in this area as there is no defence unless you can demonstrate that ‘reasonable steps’ were taken within the business to ensure that you comply with these new legislative requirements.

If you are not already obtaining accreditation to assist you to comply then you need to take immediate action to do so.

In any small business it is difficult to provide the resources needed to attend to these very important matters.There are a number of resources available, not the least through OAMPS, and a number of online accredited programs that can provide an easy solution to training and accreditation requirements.

One of the best of these is the ‘Modern Driver’ or ‘Road Safety Online’ program which can cover all of your compliance issues.

If you need advice on where to go, what to do, how to go about it, OAMPS in conjunction with your Association can and will assist with these processes.

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