We can't enforce subbie fuel levies: Coles

Coles has rejected any link between trucking safety and payment schemes, denying responsibility for below-profit rates

By Jason Whittaker

Coles has rejected any link between trucking safety and payment schemes, denying responsibility for sub-contractors receiving below-profit rates.

In its submission to the National Transport Commission’s (NTC) inquiry into safe payment schemes in the trucking industry, the retailing giant and one of the country’s largest transport customers says it is concerned operator safety and commercial payment decisions are being "confused".

While governments should specify occupational health and safety standards, Coles argues they should have no role in fixing rates.

"It is appropriate that governments specify the minimum OH&S standards. It seems less appropriate for governments to intervene in commercial arrangements to regulate financial arrangements to encourage compliance with those standards," Coles’ General Manager of Logistics, Jim Redfern, writes in the submission.

The company has also suggested the lack of consistency in OH&S regulations is part of the problem.

"It is also appropriate that governments agree on uniform standards across all jurisdictions, given the national nature of the freight task," Redfern writes.

Coles says it provides its carriers with rates adjustments for fuel price movements every month, based on "an agreed independent third-party fuel pricing schedule".

The company has paid over $10 million to transport companies to cover fuel increases over the past 12 months, it claims.

It would "expect" these increases have been passed on to sub-contractors, but the company claims "no visibility of the commercial relationship between prime and sub-contractors".

And Coles says it is reviewing its arrangements with the small number of non-contracted transport operators it engages to "ensure mechanisms are in place to allow for fuel price changes".

"The contracts and agreements are a result of commercial negotiations around a raft of considerations by Coles and the transport operator, not least of which is the ability to reliably supply quality foods from around the nation at low prices," the submission says.

Coles contracts about 9,000 freight movements from its distribution centres to stores each week.

The company points out it is an inaugural signatory to the Retail Logistics Supply Chain Code of Conduct, which has set minimum standards for retail freight customers in dealing with carriers.

Redfern says Coles has upgraded its distribution centre facilities over the last 18 months to provide "high quality rest areas and facilities".

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