Linfox defends decision to cut subcontractor rates by10pc and warns against mandatory 'safe rates'
By Rob McKay | April 12, 2011
Linfox CEO Michael Byrne has acknowledged that his firm’s decision to cut subcontractors’ rates by 10 percent for the Carter Holt Harvey timber contract has opened it up to criticism.
Byrne says, however, that the current tough economic times faced by both the transport and timber industries
meant “we can’t please everyone”.
“We understand it’s no bundle of joy for the subcontractors involved,” Byrne says.
The rates
move came as its own drivers gained extra wages to reflect the changing demands made on them but it also came at a time when the company was unable to pass on all its increased fuel costs.
Despite this, there have been reports of some backsliding on the lower rate due to a lack of up-take by subcontractors unable to afford the lower rates.
Byrne says subcontractor rates had been “reasonably stable or going up in all areas bar one, where they have been coming down – and I don’t deny that – which is the timber and forestry industry”.
This was due to “straight economics” as supply, exacerbated by a lack of horticulture to transport due to the floods, exceeded demand, he says.
Even then, Linfox was “not making any money” out of a position in the timber transport sector that he described as “hold and defend” in the hope of better times to come.
Reflecting on the changes that have been wrought on the workforce, Byrne says: “We’ve got about 6,000 company drivers.
“Those men and women have had a great change in work pattern over the past few years.
“There’s more work on a Saturday, there’s more work on a Sunday.
“Monday is our slowest day of the week, Saturday is our second-busiest day of the week.
“Thirty-five, 36, 37 percent of those people have to work of a night.
“Those 6,000 people, we’re trying to keep happy.”
Asked if the lower rate for subbies would strengthen the push for safe rates, Byrne says Linfox supported the concept as long as it was not mandated officially.
Linfox believes that there are some sectors of the industry “where the rates, even based on the logic of return loading, are totally illogical”, Byrne says.
“Do we believe that should be formally regulated by the Federal Government? I’m not sure. The Federal Government . . . they don’t seem to do a very good job of that sort of thing.”
The company accepted that some sort of safe rates mechanism would improve road safety and fatigue, but believes education on realistic economics in trucking was needed.
Byrne says it was down to two or three of the biggest players in the Australian Logistics Council, which has Linfox and Toll amongst its members, to run with the idea, otherwise it had no realistic future.