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Down Under Trucking: brave trucker saves driver from fiery death; pay up… and on time!

A burning truck; photo: Shutterstock

In this week’s Down Under Trucking, a brave trucker has been honored for saving another driver from a burning truck. Meanwhile, it’s nearly all done now for the (formerly) hostile takeover of automotive retailer AHG. Over in Western Australia, the state government is investing billions of dollars into the state’s roads. New figures show that sales of new trucks have stumbled in Australia. And, finally, in a wholly shocking development, big corporates might soon be forced by a potential new law to pay small trucking businesses on time!

Bravery award for heroic trucker who saved driver from a fiery death

Australian truck driver Darren Cooke has been named as a “Highway Guardian” by the Australian Trucking Association for his brave actions in rescuing the driver of a B-Double from a fire.

Cooke was driving along the Hume Highway near Yerrinbool in the state of New South Wales in February this year. He came across a truck in a B-Double configuration that had rolled and had somehow caught fire.

At risk to his own life, Cooke stopped his own truck and pulled the other driver from the cabin which was on fire.

In recognition of Cooke’s bravery, the Australian Trucking Association presented him with the Award, which was set up to honor truck drivers who perform heroic and selfless acts while carrying out their normal role.

Cooke is now one of 18 truck drivers on the Highway Guardian Honor Roll.

Note: the picture above is of a burning truck in Italy, not Australia, and it is sourced from a stock agency. It is attached for illustrative purposes.

AHG bows to inevitable… acquisition nearly a done deal

Automotive retailer Automotive Holdings Group (ASX: AHG) accepted an improved offer by rival automotive retailer AP Eagers (ASX: APE) to buy all the shares in AHG at an improved rate of 1 APE share for every 3.6 AHG shares owned. Previously the deal was 1 APE share for every 3.8 AHG shares owned. AHG had earlier resisted the takeover bid.

AHG Chairman Richard England said “the board of AHG believes that the improved offer is in the best interests of AHG shareholders in the absence of a superior proposal”.

APE chairman Tim Crommelin commented “We are delighted the AHG Board share our view on the logic and benefits of bringing the two companies together to create Australia’s leading automotive group.”

So it now appears that the deal is all but done barring any surprise objections from the competition watchdog, the Australian Competition and Consumer Commission.

AHG and APE financials

APE generated A$4.1 billion in revenues and A$133.7 million in profit after tax in 2018. It had total assets of A$1.8 billion (A$878 million current) and liabilities of A$ 1.1 billion (A$774 million current), giving it a net asset position of A$656.5 million.

APE reports on a calendar year basis and AHG reports on a financial year basis, so the two sets of accounts are not perfectly comparable.

AHG reported A$6.47 billion of revenues for the year ended 30 June 2018 and net profit after tax (excluding unusual items) of A$74.8 million. It had total assets of A$2.64 billion (A$1.65 billion current; as may be expected with an automotive retailer, the value of its inventories account is quite high at A$1.11 billion, the vast majority of which (A$1.02 billion) is the cost of vehicles held for sale) and total liabilities of A$1.86 billion, giving it a net asset position of A$776.5 million.

US$2.94 billion for road transport in Western Australia

A A$4.2 billion (US$2.94) road investment package has been unveiled by the state government of Western Australia in its annual budget.

About A$2 billion of that package will be invested in regional (i.e. non-city) roads. Many of the projects will be general road upgrades including road sealing. Australia is a big empty country and there are quite a few dirt roads in the Outback. Road sealing helps the trucking industry as trucks can go faster on sealed roads compared to unsealed roads. Sealed roads are generally easier on the wear and tear on trucks too. And, although we may think of Australia as a very dry continent (which it is), there are rains and floods. Sealing helps keep roads traversable during wet spells when they would otherwise be unusable by trucks.

And there are several truck-specific upgrades too. There’s A$175m to upgrade the ring road around the south west city of Albany. The purpose of the ring road is divert heavy haul trucks around the city. There’s also A$27.5 million for the Pinjarra Heavy Haulage project; A87.5 million for the Wheatbelt Secondary Freight Routes upgrade.

The big projects include the Tonkin Highway Transformation Project which will widen the highway, provide grade separated interchanges, a new flyover and will ultimately also extend the highway. The city of Fremantle will get a traffic bridge replacement and there are also a variety of duplication and interchange projects.

Regional Development Minister Alannah MacTiernan commented: “this Budget delivers new funding for agriculture, tourism, cultural programs and critical port and road infrastructure, as part of our commitment to driving the best economic outcomes for regional Western Australians.”

Sales of new trucks “stumble” in Australia

A slowdown in the new truck and van market is underway in Australia, according to new data released by the Truck Industry Council, which represents locally-based manufacturers. Like-for-like sales in all categories were down in April 2019 compared to April 2018, the Council said in a statement, adding that the heavy vehicle market is clearly showing signs of slowing down.

Australia recorded 2,943 sales across all truck categories in April 2019, down 208 vehicles (6.6 percent) compared to April 2018.

The current slowdown is a good example of the adage “what goes up, must come down”. Australia had, prior to 2019, long been experiencing a boom in sales of vans, light, medium and heavy duty trucks. Sooner or later the market had to cool down. And, as Australia moves through a period of political uncertainty owing to a federal election campaign, it was expected that sales could slow.

Lower sales “not really a surprise”

Tony McMullan, CEO of Truck Industry Council, commented: “The April result is not really a surprise. We have noted a cooling of truck sales in the Medium and Light segments so far this year and we expected that eventually this hesitation would affect the Heavy truck sector too.

“What is unclear at this stage, is if this is merely a market stumble and something that can be attributed to the usual economic uncertainty that always occurs in the lead up to a federal election. Or whether this is a longer-term market slow down caused by broader economic realities. I believe that we will have a clearer picture of how strong and how resilient the market is by the end of September. However, there is no doubt that this is a slower than ideal start to quarter two.”

Pay up! And on time… or else!

Australia’s southern state of Victoria has introduced a bill that, if it becomes law, will greatly boost the legal protections for trucking owner-drivers and small trucking businesses. Among other things the bill will require hirers of trucking business to pay invoices within 30 days of the receipt of a correct invoice unless there is a dispute over the amount payable. The parties will be able to agree on alternative arrangements too.

“Small businesses make up 98 per cent of the trucking industry. They are not banks. They cannot afford to extend finance to large customers. Mandating 30-day payment terms is a practical measure that would support Australia’s owner drivers and should be extended nationally,” said the Australian Trucking Association’s CEO, Ben Maguire.

Business that contract with owner drivers and small trucking companies would have to provide full information to them. Truckers will have to be provided, three days before a contract is made, with a copy of applicable rates, costs and minimum rates of pay that must be paid. That obligation to provide information to truckers also inserts the same requirement onto freight brokers (which includes third party contracting platforms like Uber Freight). Ongoing arrangements must be made in writing and must specify a minimum level of income or numbers of work hours with rates.

The bill also sets up a compliance and enforcement framework together with penalties for non-compliance.

Addresses long-standing industrial changes

On introducing the bill, Victoria’s Minister for Economic Development, Tim Pallas, said: “the amendments address changes that have occurred in the industry since 2005, and seek to improve the position of owner drivers and forestry contractors, by removing barriers that restrain these small businesses from achieving a fair and reasonable return for their labor and business investment…

“[it] seeks to improve the financial and social position of owner drivers and forestry contractors, and to reduce the risk of business failure, financial hardship and insolvency. It does this by removing the market conditions and barriers that restrain small businesses from achieving a fair and reasonable return for their labor and business investment.”