Over the past few months, we’ve seen transport companies shutting their doors at an alarming rate.
While we wring our hands and wail at the unfairness, it seems there is only one solution being touted – fix the rates issue. But is that the only solution?
When digging into the root cause of a problem, you would be naïve to think there’s only one.
In the case of transport company closures, it’s actually a suite of issues, not just one. Sure, rates are a problem – in what era have you ever seen the customer dictate the price?
It’s always been the supplier who dictates the price! But what we all ‘think’ the problem is, is being shrouded by many other problems that lurk, and many of those are not so hidden.
The core issue is rates, I agree, but the other issues that sit adjacent to this are as follows:
• Customers setting unrealistic pricing benchmarks without understanding cost structures.
• Carriers cutting corners to save on costs.
• Widespread sham contracting disguised as legitimate subcontracting. I’ve seen contracts where drivers are paid the bare award rate, with no super, no sick leave, no entitlements, yet are directed on every aspect of their work. It’s illegal and dangerous. If this is happening to you or someone you know, speak up. Call the ATO. Call the NHVR. Staying quiet helps no one. You might just save a life.
• Unsustainable undercutting below break-even.
• Rising business costs across all industries.
• Skyrocketing compliance costs.
• Red tape and regulation stifling business agility.
• Inexperienced drivers contributing to increased crash and insurance rates.
• Poor industry image leading to talent shortages.
• No barrier to entry allowing inexperienced operators into the market.
Pros and cons of licensing system
So, what’s the answer? How can we turn the tide on the pressures being experienced by everyone in our industry, and try to get some momentum in the other direction?
We need to start asking different questions, questions that go beyond short-term fixes and instead look at long-term viability. It’s not just about surviving the next contract; it’s about building an industry that can thrive well into the future.
If we agree that the current system is broken, what are we going to do about it? Maybe it’s time we thought about some sort of road freight licensing system?
Now, before you choke on your steak and chips, hear me out.
About a decade ago, the term “operator licensing” caused a clear divide in the industry.
In the red corner, we had then Chair of the ATA, Noelene Watson, who wrote an opinion piece in OwnerDriver magazine.
Her article heavily opposed operator licensing over fears it could become like the UK model, where industry associations, trade unions, local councils and planning authorities all have a legal right to object to applications.
There were concerns it would lead to massive red tape tangles and suffocate small operators.
In the blue corner, we had the Australian Logistics Council, with the charge being led by Toll’s Group Manager for Road Transport Compliance, Dr Sarah Jones, who correctly noted that she could “wake up tomorrow morning, acquire myself a truck, get a driver, get an ABN and I am a transport company”.
And so, it went nowhere. But there is a time for everything, and perhaps now is the time to raise it from the dead and have the difficult discussion, because whatever we’re doing now, it isn’t working.
A road freight licensing system in Australia could be readily adopted and built on existing systems like TruckSafe or AMCAS.
At its core, it’s about proving you’re running a proper business – insured, compliant, with trained staff and a costing model that stacks up. It’s not about red tape; it’s about setting a professional standard. Most good operators are already doing this. The rest either need to lift their game, or get out.
I know this seems like it will create more work, but let’s be honest – any business that isn’t already doing these things is cutting corners somewhere, and that’s not just unfair to the rest of us, it’s unsafe.
Recognising what professional companies already do would simply make the invisible visible and give us the tools to address the real issues head-on. It wouldn’t just raise the bar – it would help level the playing field, ensuring that all operators, not just the cheapest, have a fair shot at survival.
But what about the customer? What’s going to stop them from still pushing prices down?
We’ve been so focused on fixing operators that we’ve let customers off the hook, and in doing so, we’ve allowed one-sided pressure to distort the market, punishing the people doing the work while rewarding those driving unrealistic expectations.
We already have a mechanism to properly manage and investigate this, but those who are in a position to do something about it stubbornly sit on their hands.
Chapter 1A of the Heavy Vehicle National Law (HVNL) is all about safety duties. It’s only six pages long in the overall 682 pages of the HVNL, but in my opinion, it is the most under-utilised and yet most powerful part of the HVNL.
To simplify those six pages into a paragraph, the HVNL contains powerful provisions that hold every party in the supply chain accountable for safety, not just the transport operator or driver.
Under the chain of responsibility (CoR), parties who influence or control transport activities, including customers setting prices and delivery demands, have a legal duty to ensure their actions do not contribute to unsafe practices.
This includes conduct that indirectly causes or encourages drivers or operators to breach fatigue, speed, or maintenance obligations.
We already know this. It’s been repeated at every CoR training session or industry conference since the day it came into force.
Despite this, the most influential link in the chain (being the customers who set unrealistic pricing or delivery expectations), rarely face scrutiny for those demands.
Regulators have severely failed to use these powerful laws to hold customers accountable.
In fact, I challenge the National Heavy Vehicle Regulator to provide a single case they have taken to court where a customer has been charged with these offences, based solely on the fact they had demanded pricing that impacted a transport operator’s ability to operate safely.
What we’re doing now isn’t working
The intent of the HVNL is clear: If a party has the capacity to influence safety outcomes, they have a duty to act responsibly. Yet this principle is not being enforced where it matters most.
The failure to prosecute or investigate the role of price-setting customers undermines the very purpose of the legislation and leaves transport operators to shoulder the full burden of compliance, often at great financial and operational cost.
A road freight licensing system should include standards that require the customer to know what the operating costs of a transport company are.
I guarantee you not one single procurement manager who is not a transport operator would have any clue as to what a transport operator’s costs are. If that is the case, then how dare they choose the lowest price!
How dare they have the nerve to tell a transport operator “we’re reviewing your rates, they’re too high” – compared to what? You don’t bloody know!!
The road freight industry licensing system could have different licences based on the role your business holds.
Carry freight? You’d have an Operator Licence.
Procure freight? You’d have a Freight Procurement Licence.
You’re a 3PL, where you touch freight at one or many different points? You’d have a 3PL licence.
Operate a freight marketplace or matching service like Uber? You’d have a Digital Freight Licence.
If you manage all of these, then you’d have a Full Freight Licence, meaning you can do it all.
Look, I know that’s not perfect, but ideas don’t have to be perfect to be powerful, they just have to be timely and necessary. And this idea, in its raw form, deserves to be heard, tested, refined, and brought into reality before more businesses disappear and more lives are put at risk.
Our industry cannot just keep doing the same thing, because it’s not working.
We can’t afford to wait any longer. The freight task is growing, costs are rising, and the foundations of our industry are not just cracking, they’re already crumbling.
It’s time to stop tinkering around the edges in fear someone might get offended, and start rebuilding the system properly, from the ground up.
Road Freight Industry Licensing, or whatever you want to call it, could be the circuit-breaker we need.
It would lift the standard, reward those already doing the right thing, flush out the bottom-feeders, and finally hold those pulling the purse strings accountable for their role in this mess.
Let’s stop pretending the current system works. It doesn’t. If we want a safer, fairer, and more sustainable industry, we need bold change, and we need it now.