Farmers fear the state-owned shipping company’s bankruptcy could affect deliveries of fresh produce across the country.
- Scott’s Refrigerated Logistics Entered Voluntary Management on Monday
- The National Farmers Federation has expressed concern that the collapse could affect fresh food deliveries
- It is Australia’s largest cold chain refrigerated logistics company, employing approximately 1,500 people.
Scott’s Refrigerated Logistics, which has depots in every state of mainland Australia and employs about 1,500 people, went into voluntary management on Monday.
Australia’s largest cold chain refrigerated logistics company, delivering to supermarket giants Coles and Aldi.
Tony Mahar, chief executive of the National Farmers Federation, said the news of its closure came as a shock.
He said he was concerned about the potential impact on the transportation and delivery of perishables.
“The fact that the bankruptcy of a single company could disrupt much of Australia’s food supply chain shows that Australia has a serious problem of increasing market concentration in its supply chain. I am,” he said.
“We hope that the trustee’s process will quickly resolve this company’s collapse and return to the transportation and delivery of fresh produce from farmers to consumers.”
KordaMentha was appointed receiver.
Impact on the freight industry
Warren Clarke, CEO of the National Highway Transport Association, said the impact would extend to the entire transportation sector and to consumers.
“People will go to work, but there will still be disruptions in the freight chain and consumers will feel disruption throughout the system,” Clark said.
“It just shows the amount of pressure on the transportation and freight sector, and that pressure comes from the top.”
He said the industry is operating at an average profit margin of 2.5%, which, combined with other factors, is hurting business.
In addition to driver shortages and outdated infrastructure, the biggest concern raised by drivers is fuel costs after the government decided to halve fuel taxes last year.
“Freight cannot absorb more costs, but the pressure continues,” Clark said.
“They highlight reasons such as COVID, floods, roads, driver shortages, wage costs and fuel costs.
“Where do you want to stop?”
The collapse also brought uncertainty to the subcontractors the company used. This includes small drivers and other companies that rent equipment.
“There will be people fighting over the contract,” Clark said.
“There will be subcontractors worried about what their future will be. Will they stick to that contract or move to another area?
“Does Coles come in, pick it up and run it and fire everyone?”
Support for workers
Transportation workers union secretary Michael Caine said the industry was under incredible pressure.
Kane said the contracts offered for shipping companies to deliver products across the country were not financially viable.
He said the contracts were being squeezed to the point that the shipping companies would find it difficult to stay afloat.
Kane said there is a “very high” level of liquidation in the industry and carriers are not on a commercial equal footing.
He said no supportive public statements from retailers have been able to “wipe out years of commercial pressure” since Scott folded.
“Aldi has put pressure on its supply chain for years. It has been a quiet underage, a quiet contributor to some of these commercial pressures,” he said. rice field.
Kane said Aldi, unlike Coles and Woolworths, has not met with unions to discuss making its supply chain safer.
Coles said he had offered workers two weeks of financial assistance since Scott went bankrupt, which was constructive.
In response, an Aldi spokesperson said the comments were “untrue, baseless and harmful.”
A spokesperson said, “We fully disagree with this comment from TWU.
https://www.abc.net.au/news/2023-03-01/scotts-refrigerator-logistics-collapse-impacts-supply-chain/102037532 Farmers fear Scott’s refrigerated logistics collapse could affect produce deliveries