Linfox hit with angry backlash from subcontractors after it slashed the freight rate under its deal with Carter Holt Harvey
By <a href="mailto:bgardner@acpmagazines.com.au“>Brad Gardner | December 16, 2010
Linfox is facing an angry backlash from subcontractors after it slashed the freight rate under its deal with timber giant Carter Holt Harvey.
Small operators and owner-drivers contacted
SupplyChain Review
refusing to work for the company after the rate was cut by 8 to 10 percent on December 1.
The owner of Reedman’s Retro Roadways, Glenn Reedman, walked away after being told by Linfox his pay would fall. He labelled the operator’s actions “disheartening” and says a lot of other carriers are looking elsewhere for work.
“Today I’m loading for someone else. I’m sick of the exploitation,” Reedman tells SupplyChain Review.
A transport owner based in Victoria’s Gippsland who spoke on the condition of anonymity says he was told Linfox had to cut the rate to win the contract.
“As a result, we haven’t done any work for them. “It was time to get a pay rise, not a reduction like this,” the owner says.
He believes Linfox’s decision will backfire, saying it will struggle to get enough subcontractors willing to work for the money being offered.
“There comes a time when you have to walk away from work. And this is the time, in my opinion, to do it,” he says.
Linfox has declined to respond to questions, with spokesman Gary Max saying: “We’ve really got no comment on the issue.” Carter Holt Harvey did not respond before deadline.
Veteran owner-driver Darryl, who declined to leave his last name, told Linfox to find someone else to cart freight after it informed him his rate would fall by $3 a tonne.
He says he was previously paid $33.81 per tonne carting goods from NSW to Victoria.
“They can’t justify dropping the rate in this day and age,” he says.
The contract also reduces the minimum load payment from 23 tonnes to 22 tonnes and changes the rate structure for multiple deliveries.
Previously, companies which delivered to multiple sites were paid based on the furthest location travelled. Now they will be paid based on each destination, drastically reducing the rate for companies which haul goods long distances.
“It seems like immoral behaviour to me. It’s just demoralising,” the Gippsland operator says.
“I would rather sell a couple of trucks instead of having them working for that rate.”
A letter sent to subcontractors from Linfox National Operations Manager Michael Haugh on November 19 and obtained by ATN refers to impending changes.
“As there will be some subsequent business changes, one of our local site managers will be in contact with you to discuss them,” Haugh writes.
He says Linfox will manage all transport from Carter Holt Harvey’s mills and distribution centres nationwide until April 2016.
The subcontractors that spoke to ATN have found work elsewhere, but they are concerned for those who rely solely on Linfox.
“If they just accept what they’ve been handed it will only be a matter of time before they can’t make ends meet,” the Gippsland operator says.
SUBBIES DEMAND BETTER DEAL
Linfox’s actions have sparked calls for better treatment of subcontractors, with Reedman saying it is vital the industry demands a better deal.
“Linfox cannot cover the job with their own trucks. You do have bargaining power, use it,” Reedman says.
He is concerned he will be “black-blanned” by Linfox for speaking out, but claims the industry is at a point where something needs to be done.
“If no-one bucks the system we’re just going to be walked over,” he says.
Reedman says the rate cut raises safety implications because operators will need to take shortcuts to make ends meet.
The owner of the Gippsland company is adamant subcontractors cannot survive on the rate offered by Linfox.
“It’s not what you would term a safe rate by any means. It was a marginal rate as it was,” he says.
After refusing to work for reduced pay, Reedman says Linfox contacted him again telling him it was prepared to increase his rate.
“It proves the fact they make enough money,” he says.
Linfox was part of the Federal Government’s hand-picked team brought together to discuss how to reform remuneration methods in the trucking industry.
The Government is attempting to introduce a ‘safe rates’ scheme so subcontractors are paid enough to carry goods safely.
It released a discussion paper on proposed reforms last month in response to a 2008 study which revealed a link between low rates of pay and poor safety.
The Transport Workers Union (TWU) wants an independent tribunal established capable of ruling on what constitutes a safe rate.
“There’s no safety where’s there no money,” Reedman says.