Supermarket supply chain fears as trucking giant collapses

Warnings of empty shelves as logistics company collapses

One of Australia’s largest trucking companies has collapsed into administration, putting 1500 jobs at risk and sounding alarm bells for supermarket supply chains.

Sydney-based Scott’s Refrigerated Logistics, which went into voluntary administration on Monday, is a key mover of goods to the major supermarkets including Coles, Woolworths, Aldi and IGA.

KordaMentha was appointed receiver and is seeking a buyer for the distressed company, which has 1500 workers.

“It’s been a tricky couple of years in the logistics space for many companies and Scott’s one of them,” KordaMentha’s Scott Langdon told Nine’s Today Show on Tuesday.

“Increasing fuel prices, weather events, COVID shutdown impacts and a lack of supply of employees are just a few of the challenges that have faced the industry over the past couple of years.”

Deliveries will continue to supermarkets for the foreseeable future.

Mr Langdon indicated he was confident of finding a buyer for Scott’s after being “inundated with people that have got interest to buy it”.

“We’ve paid sub contractors overnight,” he said.

“We will be paying employees in the next 24 hours as they’re due and we’re commencing an immediate sale campaign to keep the 1500 employees employed and keeping the hot chips on the shelf.”

The receivers were to meet key customers on Tuesday to get support for reshaping the business and securing the jobs of 1500 workers and sub contractors.

Mr Langdon said the company had buckled under the pressure of higher increased fuel prices, extreme weather events, COVID shutdowns and a shortage of workers.

“We’re continuing business as usual so we don’t anticipate any supply issues but we’re definitely having conversations with our customers to ensure there are no supply issues and these are big companies in the food and beverage industry,” he said.

“We’re going to really lean on them to support the industry and the mum and dad attending the supermarkets. We can’t afford to have supply chain issues.

“There is no one that doesn’t want to see Scott’s survive.”

Insolvency Australia, which produces the half-yearly Corporate Insolvency Index, said businesses were under strain.

“We started 2023 just as we finished 2022, with rising interest rates, surging cost of living, labour and materials shortages and the tax office continuing its tougher debt collection stance,” director Gareth Gammon said.

In the first half of 2022/23, external administrator and controller appointments rose by 62 per cent, from the previous corresponding period, the index published on Tuesday shows.

NSW had the most insolvencies over the six months, with a total of appointments of 2,153, which is almost as many as during the whole of fiscal 2022.

Meanwhile, the Transport Workers’ Union said transport sector operators had been left to fend for themselves in a broken market.

“This is another tragedy of the untrammelled commercial power at the top of transport supply chains,” national secretary Michael Kaine said.

“Retailers are reaping the gains from razor-thin margins while operators and drivers collapse under the strain.

The TWU said it was working with KordaMentha to ensure workers were prioritised in what it hoped would end in a sale to a “responsible” buyer.

-with AAP

Topics: Consumer
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