• Feb2

    Why customers must be prosecuted

    By Cam Dumesny

    Think about this scenario.

    A Purchasing Officer receives two quotes from two different transport companies, to take a load from say Perth to Newman.

    QUOTE A
    • Transport Company A puts in a quote of $X dollars and a statement of how it has demonstrable quality, OSH, HV Accreditation and Compliance and Enforcement systems in place to mitigate risk.
    QUOTE B
    • Transport Company B puts in a lower rate, with no statement of compliance and in fact it has the reputation known to purchasing manager for being short cutting “cowboys”.

    Okay, before giving the obvious answer think about this.  There are only three basic things any company can offer another; they are to:

    • Increase revenue,
    • Reduce costs, and/or
    • Mitigate risk.

    Effectively a transport company provides the latter two – its offers a cost effective delivery solution AND it also offers a mitigation of risk service.

    The risk is not just a loss, delay or damage in transit it also the mitigation of any risk exposure to the client – i.e. Compliance and Enforcement (Chain of Responsibility) legal risk or DG Consignor Risk etc.

    But there is also a third risk, that is the risk to the general road using public.  The risk of the load being carried by a poorly maintained vehicle, a fatigued or speeding driver who is making up time to offset the lower price paid or may be the vehicle is overloaded in order to reduce the number of trips required in order to offset the lower price.

    Amongst the myriad of stories we are hearing from members, and we pass on to Main Roads, is one of an OSOM load that required two pilots to meet regulatory needs – someone undercut them by 50% – the only way that was possible was to take the risk and go without the pilot escort.  Effectively the client choose to be “Wilfully blind” in not asking the question of why it was so cheap and that is a proven unacceptable defence in court.

    In choosing the lower price offered by the non-compliant transport provider, the purchasing officer effectively has done two things.

    • Firstly, probably contributed to achieving a personal performance bonus for driving down transport costs, AND
    • Secondly, this is a key point, the Purchasing Officer has implicitly accepted the transfer of risk to the other general road users and obviously the driver too.

    So at the most basic and crude level client purchasing officers can receive a bonus by transferring risk to the driver and the general public!!

    That is why if we are going to get serious about Road Safety, then the first stop is not the transport companies but those who buy transport services.

    Aggressively prosecuting customers of transport companies will very quickly make the risk component of the transport service highly valued.  Then pricing considerations will truly reflect both the operational delivery cost AND the risk mitigation.

    Many WARTA members have invested heavily in high quality systems to reduce risk in delivery, to their staff, their supply chain (chain of responsibility), and to the general public (fatigue, load restraint, maintenance etc).

    It is time this investment was valued properly, and the best way to do that is to hold customers accountable for their transport provider choices.  The laws are there – they just need to be enforced.


    We’d love to hear your thoughts

    Contact the Author
    Cam
    Email | cam@warta.com.au