Industry questions COR influence on supply chain behaviour


Critique hones in on customer conduct and enforcement impact on safety

Industry questions COR influence on supply chain behaviour
Operators feel they are harshly copping the enforcement wrath

 

Transport operators feel they are being unfairly and disproportionately targeted by enforcement, with not enough done to hold parties higher up in the chain of responsibility (COR) to account, submissions to the Heavy Vehicle National Law (HVNL) review reinforce.

Concerns around how the law influences safe people and practices – and how it is enforced – have been thrown into sharp relief, with operators, peak bodies and even the national regulator acknowledging various shortcomings.

INDUSTRY EXPERIENCE

One of the more pervasive external pressures on operators is customer conduct, according to National Road Transport Association (NatRoad) CEO Warren Clark, especially around unfair or oppressive contract conditions – in particular, increasingly strict application of timeslot requirements.

"Members are increasingly concerned that contract conditions in the industry are unfair and are adding to commercial pressures," Clark says.

"These practices add to a culture that does not give safety the primary focus."

Ron Finemore Transport (RFT) founder Ron Finemore uses the example of load restraint laws pushing "far too much responsibility" back to the driver.

"We have customers that ‘load and lock’ trailers and yet drivers are somehow accountable rather than the COR applying," he says.

"We’ll also have customers load a vehicle, then require the driver to ‘sign off’ as an expert. Again, this is an unreasonable outcome.

"If you couple this with the varying competency of the enforcement staff, we again end up with the low-risk problems being the focus on defect sanctions rather than a focus on high-risk activities."


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Toll Group general manager of road transport safety and compliance Sarah Jones acknowledges the difficulty for operators to grasp the regulatory framework they operate within, particularly with a view towards best practice.

She says it is "no small ask" for operators to "have the professional and personal confidence to refuse to cart a load that they believe may be unsafe or non-compliant".

"There is a natural disinclination … to ‘bite the hand that feeds them’ and little recognition that exercising the obligation to refuse is an act of leadership.

"Leadership, in most cases, doesn’t just 'happen'. Workers need to be encouraged and coached to see speaking out about safety as a personal, even a moral, obligation.

"They must also know they will be supported … if they do speak out."

Australia’s largest logistics operator is not immune to unscrupulous customers either, she adds.

"Toll works with some customers for whom safety is top-of-mind … these are the customers with whom genuine safety partnerships form that benefit the entire road network.

"Equally, there are customers for whom safety is performative.

"Words are spoken and questions asked that give the impression that COR obligations are factored into decision-making when price and delivery in full on-time (DIFOT) are the sole motivating factors.

"Then there are customers that dispense with the theatre altogether and are solely interested in the bottom line."

DISCONNECT

Reasonable enforcement, according to Clark, can be summarised as ‘consistent and proportionate’, which then fosters a culture of compliance.  

To the contrary, however, a theme emanating from member feedback – and echoed in many submissions – is that current enforcement methods are pedantic and overbearing, and accepted as a business cost rather than a deterrent.

Clark notes operators believe that they are targeted because it is easier for the authorities to take action against them.

"Operators’ goodwill is eroded when operators perceive enforcement is heavy-handed, unpredictable and disproportionate," Clark continues.

"Many operators view the issue of penalties as 'a cost of doing business' – this is often an unacceptable and unjustified cost that is randomly applied given the nature of on-road enforcement.

"Frankly there is a lack of data and reporting that informs the cost/benefit relationship of current enforcement activities."

"The usefulness of the current provision directed at controlling practices up the chain has not yet been formally tested," he adds.

Similarly, Jones questions the extent to which COR is influencing behaviour along the supply chain.

"More certain is that compliance and enforcement attention remains disproportionately directed towards drivers and operators," she says.

"It is therefore open to debate whether reputational and legal risks are deeply felt by consignors and consignees."

Jones cites a lack of COR prosecutions and, like Clark, lack of data or analysis available to quantify the effectiveness of the legislation.

"A 2013 study found that in New South Wales the majority of COR offences (nearly 47 per cent) were targeted at operators, 21.35 per cent against consignees and nearly 16 per cent against consignors.

"Since then, NSW has unfortunately ceased publishing COR sanctions and the party to whom they are directed.

"The most recent Roads and Maritime Services (RMS) heavy vehicle compliance report does not mention supply chain investigations at all, focusing exclusively on vehicle defects, fatigue, mass and load restraint breaches directed at drivers."

Further, on the National Heavy Vehicle Regulator’s (NHVR’s) court outcomes page – at the time of writing – all the offences are against drivers, operators, companies and directors and none against consignors, consignees, loading managers or any of the parties likely to be customers.

This fact is not lost on Jones.

"The NHVR is yet to bring a COR prosecution. If it is actively engaged in COR investigations along the supply chain, it has not divulged that information," she comments.

"Toll recognises that the NTC has no power to affect the volume, approach or outcomes of enforcement. But we must have a frank national conversation about whether enforcement bodies are prepared to commit resources to COR investigations or not."

SOLUTIONS

Clark says "improving contract terms and conditions must be seen as issues that need urgent attention" to create a more level – and safer – playing field.

"NatRoad policy to achieve these aims is for the federal Government to introduce a mandatory code for the industry under Part IVB of the Competition and Consumer Act 2010 (Cth) which would address harsh payment terms in transport industry contracts.

"If that recognition doesn’t occur then even more focus on COR prosecutions up the chain must be considered."

Jones notes that while the law infers – without explicitly stating it – customers must select their freight carriers on factors other than price alone, a consideration which needs greater emphasis going forward.

"The forthcoming Regulation Impact Statement (RIS) must speak to it as a matter of urgency," Jones says.

"If chain of responsibility is not deeply and consistently influencing the decisions that customers make then the system is fundamentally flawed and must be constructed afresh."

She also recommends the police minister to sit on the Transport Infrastructure Council (TIC), and that the HVNL include a requirement for enforcement bodies to supply annual data on: type and volume of sanctions issued; parties against which the sanctions are issued; outcomes of the sanctions.

The feedback presented by operators and peak bodies aren’t lost on the regulator, which endorses the introduction of a duty for parties in the chain to consult with each other.

It explains: "The NHVR notes that under the current HVNL, a party in the chain could hold substantial information regarding a risk to the safety of an activity but there is no requirement for them to share the information with other parties to enable the principals contained in section 26A to operate effectively.

"The NHVR believes that a duty to share knowledge/consult across the supply chain should be introduced to enable all parties in the chain to be fully informed so risks can be managed appropriately.

"The NHVR believes that parties in the COR are not effectively consulting with heavy vehicle operators or heavy vehicle drivers on safety critical issues that affect the driving task.

"For example, consignors may not be given instructions on the load restraint requirements to packers, resulting in uneven packing of shipping containers.

"Uneven packing may alter the performance of the heavy vehicle during manoeuvring, making safe driving more difficult."

It regulator also acknowledges the majority of prosecutions across Australia are prescriptive driver offences.

"This is not an efficient use of prosecution or court resources," it acknowledges, and recommends reserving prosecution for serious safety issues and non-driver defendants who breach the HVNL.

SAFE VEHICLES

On the topic of safe vehicles, the NHVR notes many operators are concerned with the quality of their vehicles and parts, and the consequences if they are not designed or engineered for Australian conditions.

It recommends introducing a safety duty for heavy vehicle and componentry manufacturers.

"The quality of heavy vehicles and their componentry parts has become a constant issue for heavy vehicle operators across the country," it says.

"Impacts such as fires, breakdowns and resulting crashes were cited as outcomes from poorly manufactured vehicles and parts.

"The NHVR notes that there are no current controls in place for unsafe vehicles or componentry.

"Whilst the Australian Design Rules (ADRs) specify minimum requirements, there are many parts of the vehicle that are not covered by ADRs.  

"In response to recent major safety incidents, the Regulator has used persuasion to influence an international manufacturer to voluntarily modify their componentry.

"The NHVR believes that a duty to provide safe plant and componentry should be introduced to ensure vehicles are constructed to the highest safety standards so that heavy vehicle drivers have a reliable operating environment."

Finemore goes further, putting the onus on the state of Australia’s road infrastructure.  

"Good roads have a massive influence on safety outcomes," he says.

 "I was surprised that there wasn’t more commentary on this issue and consider delivering ‘safe roads’ is as important an influencer as pursuing safe drivers and safe vehicles."

 

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