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Rates plummet as big-name operators muscle in

Small trucking operators feel the pinch as Toll and Linfox fight to secure lucrative contracts from the mining sector

By Ruza Zivkusic | August 24, 2011

Small transport companies servicing the mining sector in Western Australia are struggling to find work, as big-name operators muscle in to snap up lucrative contracts.

Freedom Freightlines owner Sam Burgess says companies like Linfox and Toll make it “unviable” for smaller operators to retain business.

The former farmer from Wagga Wagga in NSW moved to Perth three years ago to work at the mines but instead started working in the transport and logistics industry carting dangerous goods and machinery to the mines.

“One of the biggest challenges over here we have found is big companies have started moving in – Linfox and Toll, and this has only happened in the last two years,” Burgess says.

“Linfox weren’t very prominent in WA and it’s now put more competition for the big players which leaves the little players in a position where it’s very hard to get work.”

Burgess says he used to receive $4,500 for operating a road train for the more than 1,500km journey from Perth to Karratha, but the going rate has now plummeted.

“Last year we were able to get around $3,500 per trailer as a subcontractor pulling their equipment, now we’re lucky to get $3,000 per trailer using our own equipment,” he says.

“Because Toll and Linfox are fighting over work, we get what’s left over and the money is just not there anymore,” he says.

The drop in rates has come amid rising fuel and tyre costs, adding more pressure to the bottom line of small operators.

Burgess says the mining boom is also draining the transport sector of its skills base, adding to operators’ woes.

“Our biggest problem over here is that we have to compete with the mines. The guys automatically think that I can pay them what the mines can pay them and I can’t,” he says.

“My biggest reason to moving to WA rather than staying on the east coast was that WA seems to be moving ahead whereas all of the other states seem to have done what they’ve done. There’s a boom over here and that’s what I was chasing.”

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