ACCC backs Holcim's truck allocation system

Competition regulator proposes extending Holcim's cartage allocation system for owner-drivers to March 31, 2019

ACCC backs Holcim's truck allocation system
ACCC backs Holcim's truck allocation system
By Brad Gardner | September 5, 2013

The competition regulator has proposed extending concrete supplier Holcim’s cartage allocation system for owner-drivers in Western Australia to March 31, 2019.

The Australian Competition and Consumer Commission (ACCC) has issued a draft determination allowing Holcim to continue its Equal Opportunity of Trips (EOT) system, which was first authorised in 2003 and is in place in the Perth metropolitan region.

EOT is designed to provide equal work opportunities by ensuring no individual truck receives more or less work than Holcim’s Perth fleet average.

Under the scheme, points are allocated to owner-drivers per load and distance for concrete carted. The points are calculated at the end of each month, and the ACCC says those operating above or below a set margin are reallocated to a busier or quieter batching plant as necessary.

"The allocation system provides a transparent mechanism for allocating concrete delivery jobs to Holcim’s trucks. The system has been in place and authorised for 10 years and has improved the reliability and efficiency of Holcim’s pre-mixed concrete services," ACCC Deputy Chair Dr Michael Schaper says.

The ACCC says it will seek responses to its draft proposal before issuing a final decision. It has granted Holcim interim authorisation while a final decision is being made.

In its application to the ACCC, Holcim argued the EOT system provided transparency by allowing owner-drivers to see a monthly report outlining exactly how much work they had been allocated compared to others.

The concrete supplier says 57 owner-drivers make up its fleet of 67 trucks.

Holcim says the EOT system has led to a reduction in industrial disputes between it and owner-drivers and reduced the potential for perceptions of discrimination.

The ACCC agrees with Holcim and says EOT allows the company to provide a more efficient and reliable service to its customers.

"The ACCC considers that the EOT system generates benefits for both Holcim and LODs [lorry-owner drivers] by providing a transparent mechanism for allocating trucks to concrete production plants, and allocating jobs at these plants," its draft determination says.

"This transparency in decision making reduces the potential for disputes between Holcim and LODs, which in turn reduces the potential for costly negotiations or industrial action."

The ACCC says the scheme has the potential to reduce competition between owner-drivers that may increase efficiency and reduce costs, but adds that Holcim will bear the brunt of any disadvantage.

"As Holcim wishes to maintain operation of the EOT system, the potential detriment from a lack of competition between LODs is presumably not significant," the draft determination reads.

The ACCC says it does not believe any other public detriments are likely to result from extending the operation of the EOT.

"Since the introduction of the EOT system there have been no complaints made to the ACCC regarding the system, or regarding work allocation by Holcim in general," it says.

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