Plight of cold chain operator rings alarms bells
The financial woes impacting Australia's largest cold chain transport operator is yet another sign that many local businesses are doing it tough going into 2023.
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."
Mr Langdon indicated he was pretty confident of finding a buyer for Scott's after being "inundated with people that have got interest to buy it".
Insolvency Australia, which produces the half-yearly Corporate Insolvency Index, says businesses are 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 says 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 are prioritised in what it hopes will end in a sale to a "responsible" buyer.