Transport reform urgent as operator collapses from ‘cost pressures’

The collapse of transport company Rivet Mining Services (RMS) has highlighted a pressing need for reforms that will guarantee that supply chains are just, secure, and sustainable.  

The collapse of the transport company, which is a provider of bulk haulage and ancillary onsite services to mining companies in WA, was caused by mounting cost pressures, driver scarcity, and project setbacks. 

The AFR reports that the transport company has been placed into administration,  with FTI Consulting appointed as the receivers and managers of RMS, as well as the holding company Blondie Trading. 

In the latest article by The Australian, FTI Consulting states that the amount RMS owed to its creditors was not yet known. 

“Based on a preliminary assessment, it appears RMS has been deeply affected by a number of adverse economic factors including extreme weather events, project delays, labour shortages, and cost pressures,” FTI said on The Australian. 

“RMS will continue to trade on a business-as-usual basis while the Receivers conduct an independent assessment of its financial position and seek to sell the business as a going concern.” 

Meanwhile, the Transport Workers’ Union (TWU) is working with administrators to ensure workers are prioritised throughout the administration process. 

RMS’s collapse, which will affect 450 transport workers in WA, follows the folding of major cold chain logistics operator Scott’s Refrigerated Logistics. 

Scott’s Refrigerated Logistics’ collapse, which saw 1500 workers lose their jobs, was found to have been caused by “uncommercial customer arrangements as a result of intense market competition”. 

According to TWU, Scott’s Refrigerated Logistics and RMS both experienced tight margins and transport operators had no regulatory mechanism to recover rising costs from wealthy supply chain clients. 

This further caused pressure on operators and drivers to cut corners in safety to stay afloat as this week saw two truck drivers killed, adding to a total of 15 truckie deaths in 2023. 

TWU National Assistant Secretary Nick McIntosh said that while these factors were unsustainable for any business, they were the norm in transport. 

“We’re seeing hundreds of transport workers losing their jobs and supply chains plunged into chaos because operators are unable to survive the upsurge of operating costs like fuel, severe weather events, or project delays without regulatory support to recover those costs from wealthy clients,” he said. 

“These devastating collapses are going to keep occurring until we have reform in place to ease the burden on operators and drivers struggling under the weight of squeezed contracts, rising costs and destructive competition.” 

McIntosh urged the Federal Parliament to pass reform that will restructure the critical transport industry and save the operators from imminent collapse. He emphasized that this year is the ideal time to pass and implement the reform without any delay.