1500 jobs lost as huge logistics firm collapses

Staff were told on Friday afternoon that they were being made redundant after the company failed to find a buyer.

A huge logistics firm has collapsed, costing 1500 Australians their jobs.

Scott’s Refrigerated Logistics - which provides trucks for major supermarkets including Coles - plunged into receivership earlier this week.

But after being unable to find a buyer, staff were told on Friday that they were being made redundant and that the company would enter liquidation, The West Australian reported.

The firm’s 500 trucks will also be sold.

Scott's Refrigerated Logistics has gone under

The firm provides refrigerated trucks and warehouses for businesses including supermarket giants Coles, IGA and Aldi.

Scott’s was reportedly bought by private equity firm Anchorage Capital Partners in June 2020 for about $75 million.

KordaMentha had been appointed as receivers and said earlier this week that it was looking for a “new long-term owner”.

“We anticipate a high level of interest in this business and its assets, given its significance in the cold chain supply system in Australia,” KordaMentha partner Scott Langdon said.

“We are seeking support from all customers to give the business the best chance of being sold to a new long-term owner.”

As many as 20 buyers were at one point interested in taking the company on, The Australian reported, but some were put off by the form’s ageing fleet of trucks and large debts.

The company may have been affected by supply chain shortages in Australia and across the world following the Covid pandemic.

The war in Ukraine has also caused fuel prices to spike.

Scott's Refrigerated Logistics failed to find a buyer

Road Freight NSW CEO Simon O’Hara told news.com.au that the devastating collapse of Scott’s “won’t be the last”, with “higher prices” for supermarket shoppers “undoubtedly” on the cards.

Mr O’Hara said the situation was “just the tip of the iceberg” for the struggling sector, and that supply chains would certainly be impacted.

“Scott’s has been a major part of the refrigerated transport space for some time, and this is significant. What we’re seeing for the first time is a larger, more significant part of the supply chain going into insolvency,” he explained.

“What we’ve been seeing for about the last 12 months is a number of road freight companies and truckies deciding they no longer want to remain in the industry and pulling the pin.

“It’s symptomatic of what’s been happening in the freight industry, and this won’t be the last.

“It’s the tip of the iceberg and we’re going to see more, and unfortunately we will see the supply chain affected undoubtedly, given the shortage of new trucks coming into Australia.”

Mr O’Hara explained the industry had been stretched to the limit during the Covid pandemic, and was then hit with a shortage of AdBlue – a crucial component of diesel fuel – before being slugged with soaring costs.

“It’s been flat chat for years, and some won’t make it due to financial reasons, and others will make the conscious decision to pull the pin,” he said.

“Some businesses will make the decision [to exit the industry] based on it being too hard – they don’t want to do this anymore, they want to retire early, or do something else.

“So there are two different reasons for exiting the freight industry, and it will have a flow on effect for consumers and ultimately lead to higher prices and unfortunately less competition, which is never a good thing.”

Mr O’Hara said the freight industry carried the nation, and that we would all be impacted by collapses in the sector.

“Freight drivers deliver just about everything you use in your supermarket. When you go to a restaurant, it’s freight that has delivered that food,” he said.

“If you go to the chemist, freight has delivered the medicines. If you end up in hospital, all the provisions and medicine used has been delivered by freight, and when you drive your car, the fuel you use has been delivered by freight.

“Everything you use in Australia in one shape or form, at some stage in the supply chain, has been delivered by freight.”

Scott’s has more than 500 trucks and 1000 trailers on Australia’s roads, and has 24 warehouses across Australia.

The company claims that its vehicles travel more than 500,000km a day.