Australia’s Transport Workers’ Union (TWU) has called on parliament to pass laws to improve the transport sector’s working conditions and sustainability.
This comes after the liquidation of country’s largest cold chain operator, Scott’s Refrigerated Logistics, which the union has warned will cause “supply chain chaos”.
Supply Management News reported that, according to TWU, the closure of Scott’s was likely to lead to 1 500 job losses and that the union was talking to other cold chain firms to relocate staff where possible.
TWU said there was no direct competitor that could immediately take over the company’s deliveries.
The union has blamed the collapse of the company, which entered administration last week, on “wealthy clients like Aldi squeezing transport contracts and profiting from the razor-thin margins of operators”.
TWU has now called on parliament to pass urgent legislation to make transport work fairer, safer and more sustainable as soon as possible.
“It has now been revealed that these supply-chain pressures from clients led to Scott’s relying on a complex web of high-leverage finance and loan companies,” the TWU said.
“Aldi is the only one of the three major supermarkets not to have signed a charter with the TWU on supply chain transparency, fairness and safety.”
The union reported that, in the 2021-22 financial year, almost 200 transport sector companies became insolvent, while clients, like supermarkets, “at the top of the supply chain” had made “mammoth profits”.
Insolvency firm KordaMentha has also warned that the collapse of Scott’s could have supply chain repercussions as the firm may enter “uncontrolled wind-down”.
KordaMentha partner Scot Langdon told ABC News that the company could start to wind up without any financial support from the federal government or other stakeholders.
“Scott’s is not the first transport company to be pushed out of the market by profit-hungry clients at the top of supply chains, and it won’t be the last unless we enact reform,” added the TWU.
“Last year, the federal government committed to setting enforceable minimum standards in transport. The transport industry is at crisis point – we need the federal parliament to urgently pass this reform to save businesses and lives.”
Aldi and Coles said they were working on contingency plans with alternative transporters to minimise any disruption to the supply of goods.
