Road transport and the vegetable industry

vegetable-1

About

This study was designed to identify areas in which the transport cost of vegetables in Australia could be lowered through the introduction of improved regulation, facilities, and equipment or work practices.

How

The study consisted of three components:

  1. A bench-marking literature review of the national road transport regulatory regimes in New Zealand, Canada and the United States, Germany, United Kingdom.
  2. Detailed interviews and discussions with transport operators and Industry Associations in the selected countries and in Australia.
  3. Case studies to quantify the gains from selected key potential cost saving areas identified.

Why

Background

Constraints imposed by rules and legislation governing the road transport industry have the potential to severely impact the efficiency of the horticulture sector supply chain and thereby reduce the international competiveness of the vegetable industry in Australia.

Specifically, the vegetable industry made the observation that road transport issues and legislation are affecting the industry, in particular:

  • Legislation surrounding maximum driving times and rest breaks are inhibiting the proper transportation of perishables.
  • Rules and legislation are becoming prohibitive and the industry has had little say in the formation of rules that affect them.
  • It was noted that there may be scope for legislation that is unreasonably affecting transporters of perishable loads to be amended.

Discussions in 2014 with Hort Innovation, AUSVEG and a grower’s representative added further detail to these issues including:

  • Transport being a large component of growers’ costs and that growers are predominantly price takers.
  • There is concern amongst growers that road freight “red tape” is increasingly imposing more rigorous conditions on movement of produce into time sensitive markets.
  • There are significant commercial penalties incurred if produce is not delivered in accordance with market timeslots.
  • Costs of production are increasing as the extent of road freight regulation increases on transporters. There is a desire to raise regulatory issues with governments where increased regulation imposes additional cost for little benefit.
  • This process will be assisted by having international examples of more favourable regulations and productivity schemes on the proviso that associated safety outcomes are considered acceptable.
  • Weight is not generally an issue, most loading issues are volume related (700 kilos a pallet for beans compared to carrots which are 1.2t. a pallet).
  • A concern that enforcement levels are increasing without flexibility and that this is getting worse, with some of the penalties being very high.

Key recommendations

The Review Team investigations found no “silver bullet” solution available to the Australian vegetable industry via the adoption of overseas vehicle regulatory settings. However, scope exists to improve productivity in the transport of vegetables within the existing regulatory framework within Australia. The areas identified where reform could quickly be pursued schemes included:

  • A greater use of higher performance trucks such as B-Doubles, B Triples, Super B Doubles and A Doubles and/or improved use and design of existing trucks.
  • Pursuing greater access to higher mass on vehicles transporting vegetables either through:

o expansion of the higher mass limits network for eligible vehicles; and/or

o improving access for high performance trucks at the start and end of journeys (so called “first and last mile” access issues); and/or

o the introduction of incremental pricing for vehicles with heavy loads.

  • Adopting more flexible fatigue management regimes for truck drivers involved in vegetable transport.
  • Development of a “vegetables road network” that would combine the top five to ten key vegetable road transport networks. High Performance vehicles such as an A Double should be able to operate on this network. Broader and more complex reform areas identified that could be considered by the vegetable and horticulture sector collectively included:
  • Addressing the unnecessarily high costs of road transport in Australia imposed through broader policy objectives such as Australian Design Rule requirements, higher fuel and registration fees, higher wages and more stringent occupational health and safety regulations.
  • Reducing the duplication of quality assurance requirements across organisations receiving vegetables.
  • Highlighting the benefits of having flexible axle mass limits within existing gross vehicle mass (GVM) (moving weight across axle groups can greatly assist in optimising loading.
  • Pursuing the opportunity to provide GVM allowances to remove conservative loading practices which are aimed at avoiding sanctions rather than optimising efficiency.
  • Specific grower or vegetable sector initiatives that could lower transport costs, such as:

o Assessing key supply chain improvement options covered by this Report and other Hort Innovation projects (such as VG13084).

o Improving understanding across the vegetable sector of road transport policy, legislation and regulation to assist in taking advantage of current productivity schemes.

Project Details

Project Details

Project name: Benchmarking international road transport regulations
Project number: VG13107
Date completed: 31 January 2015

HGH Consultants

T 02 6247 5699
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Funding Statement

This project has been funded by Horticulture Innovation Australia Limited using the Vegetable levy and funds from the Australian Government.


Delivery Partners

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