The collapse of Scott's Refrigerated Logistics, a major Australian transport company, impacts supply chains, food safety, and businesses' access to refrigerated logistics services. The industry faces challenges and opportunities in the aftermath, affecting producers, retailers, and consumers.
The collapse of Scott's Refrigerated Logistics, one of Australia's biggest transport and logistics companies, has sent shockwaves across the country's supply chains. The company, which supplied major supermarket chains and other businesses with frozen and chilled goods, entered voluntary administration on February 28, 2023, after reporting a loss of $41 million in the current financial year. About 1,500 workers have been made redundant, and more than $500 million worth of food is stuck in limbo in Scott's cold storage warehouses.
What does this mean for the refrigerated logistics industry in Australia? How will this affect the producers, retailers and consumers who rely on cold chain services? And what are the challenges and opportunities for the sector in the wake of this crisis?
In this article, we will explore these questions and provide some insights into the impact of Scott's collapse on refrigerated logistics in Australia.
The refrigerated logistics industry is a vital part of Australia's food system, ensuring that perishable products such as meat, dairy, seafood, fruits and vegetables are safely transported and stored at optimal temperatures. According to the Refrigerated Warehouse and Transport Association (RWTA), the industry employs about 70,000 people and contributes about $15 billion to the economy annually.
Scott's Refrigerated Logistics was one of the largest players in the market, with depots in every mainland Australian state and a fleet of about 750 trucks and 200,000 pallet spaces. The company serviced some of the biggest names in the food industry, such as Woolworths, Coles, Aldi, McCain Foods and Ingham's.
The sudden collapse of Scott's has disrupted the supply chains of many of these customers, leaving them scrambling to find alternative transport and storage solutions. Some small regional businesses have been particularly hard hit, as they have lost their access to larger distribution centres in capital cities.
For example, Casey Bowie and her sister run a frozen meal production company called Black Rock Beef Co in Townsville, using beef from their family's cattle property near Hughenden. They were ready to expand their business to the southern states, but their plans were dashed when Scott's stopped servicing small businesses.
"We just got an order, put the booking form in, and got told that they can no longer support small businesses, which is fair enough, everyone's got to run a business, but it put us in a pretty tricky spot," Ms Bowie told ABC News. "We're really trying to make a go of it here, trying to grow, trying to expand, and the one thing standing in our way is a truck with a freezer on the back."
Ms Bowie said she called about 50 different places to try and find a cold frozen truck to get onto, but had no success. She said she would now look to service markets closer to her base.
Another major concern arising from Scott's collapse is the potential risk to food safety and quality. KordaMentha, the receiver appointed by Scott's creditors, has confirmed that there are about 114,000 pallets of frozen goods worth half a billion dollars in Scott's cold storage warehouses. These include products such as ice cream, frozen vegetables, chicken nuggets and pies.
KordaMentha said it was working with Scott's customers to relocate these goods as soon as possible, but admitted that it was a complex and time-consuming process. It said it had retained a skeleton staff of about 300 workers to assist with the operation.
However, some suppliers are worried that their products may not be handled properly or may be damaged or spoiled during the transition. They are also concerned about the legal implications of retrieving their goods from Scott's warehouses.
According to RWTA executive officer Marianne Kintzel, there is not enough capacity in other refrigerated warehouses to accommodate all of Scott's stock. She said the cold chain industry was already under significant pressure due to labour shortages,
Was your company using Scott’s Transport to move your refrigerated goods around North Brisbane? Please contact us to discuss your requirements - SubZero Logistics is able to help you navigate the future.
