Down Under Trucking: a weekly round-up of trucking news from Australia. The country has been struck by a spate of horrible crashes of trucks with multiple trailers have rolled over. On the corporate side, a major trucking-related hostile takeover has broken out. Politicians in Queensland are seeking to modify the Heavy Vehicle National Law and, on the commercial front, truck sales appear to be coming off the boil from last year’s red-hot market.
Horrible truck crashes around Australia and New Zealand
Tragedy has struck around Australia and New Zealand with a spate of accidents and fatalities involving trucks and truck drivers.
A truck driver, identified by local media as Stavros Kostaras, died on April 6 after his delivery truck crashed into the back of a carrying truck near the village of Monarto, some 50 kilometres (approximately 31 miles) east of the state capital of Adelaide.
According to local police, the 56-year old man died at the scene. The other driver, a 52-year old male, was not injured. Local media added that Kostaras was carrying a cargo of household goods including aerosol cans. The crash caused the delivery truck to catch fire, which spread to nearby grass. Fire crews attended and put out the blaze. Photographs from local media show what appears to be a burned-out curtain side high-productivity truck which is in either an A-train (semi-trailer/dolly/semi-trailer) or B-double (semi-trailer/fifth-wheel/semi-trailer) configuration. The prime mover is not visible.
Kostaras had been driving trucks for four decades according to a statement from his family. He leaves behind five adult daughters and four grandchildren. He died mere weeks before one of his daughters was due to be married. Daughter Elizabeth Kostaras-Gakis told local media that her father was a “fun-loving, hard-working family man” and said that the crash demonstrated that “we are never promised tomorrow.”
Meanwhile, state police in Victoria are investigating a fatal truck crash near Sandy Creek, which is near the border with the state of New South Wales. Few details have been released at the time of writing. However, police stated that the truck was traveling along Cemetary Lane when it left the road and crashed into a tree. Emergency services personnel attended the accident; however, the truck driver was pronounced dead. An investigation is ongoing.
Two people in a car were killed in a crash between their car and a truck in the eastern central part of the Australian state of Queensland, according to state police. Emergency services were called to the scene, about 30 kilometres south of the country town of Rolleston. A car, which was towing a caravan, and a truck with semi-trailer collided. The car caught fire. The truck driver suffered an injury to his arm. The occupants of the car were pronounced dead at the scene.
A truck driver in the Gold Coast region of southeastern Queensland was hospitalized after his truck rolled over near the hamlet of Yatala, local media reported. The facts of the crash were confirmed by local police. The driver was treated for head and chest injuries at the scene by paramedics.
A major highway in the country town of Armidale, New South Wales, was shut for several hours last week after a high-productivity truck partially rolled just before 10:30 a.m. (local time). Photographs from the scene show what appears to be a three-trailer road train that has run off the road to the left (traffic in Australia drives on the left) and the first two trailers have overturned. No one was seriously hurt.
In New Zealand, a truck loaded with hay rolled-over near the country’s second-largest city, Wellington. Diesel fuel leaked onto the road; however, no one was hurt. Images released by the local police appear to show a road train in a triple-trailer configuration with a cab-over prime mover. Further details were not available.
Its ON! Hostile takeover bid to create giant Ausrtralian car, bus and truck retailer
Automotive retailer AP Eagers (ASX: APE) has made an all-scrip offer to buy all the shares in Automotive Holdings Group (ASX: AHG) Australia’s largest car, bus and truck retailer. At the time of writing, APE owns a 28.7 percent stake in AHG.
A “scrip” in takeover terms is something other than legal tender that’s used as a substitute for legal tender.
APE opened the takeover with an offer of one APE share for every 3.8 AHG shares. APE management argued that the deal would boost geographic and brand diversification and would financially strengthen the balance sheet of the merged entity.
APE generated A$4.1 billion in revenues and A$133.7 million in profit after tax in 2018. It had total assets of A$1.8 billion (A$878 million current) and liabilities of A$ 1.1 billion (A$774 million current), giving it a net asset position of A$656.5 million.
APE reports on a calendar year basis and AHG reports on a financial year basis, so the two sets of accounts are not perfectly comparable.
AHG reported A$6.47 billion of revenues for the year ended 30 June 2018 and net profit after tax (excluding unusual items) of A$74.8 million. It had total assets of A$2.64 billion (A$1.65 billion current; as may be expected with an automotive retailer, the value of its inventories account is quite high at A$1.11 billion, the vast majority of which (A$1.02 billion) is the cost of vehicles held for sale) and total liabilities of A$1.86 billion, giving it a net asset position of A$776.5 million.
Board members of AHG were not impressed. “The AHG board strongly believes in the underlying growth prospects of each of our businesses… the AHG Refrigerated Logistics business is the largest operator of temperature-controlled logistics in Australia and is a highly strategic asset,” the board said in a statement and urged shareholders to “take no action.” AHG then appointed UBS as its financial adviser and Ashurst as its legal adviser in relation to the takeover.
APE upped the ante by appealing directly to AHG shareholders with a direct bidder’s statement. APE has announced its intention to compel the sale of any remaining shares to it if APE gets control of 90 percent of AHG. Following purchase, AHG would be taken off the Australia stock exchange, and the current board of AHG would be given the boot. Current AHG employees should likely be concerned about a successful takeover, because APE has announced that senior management roles will be made redundant and, owing to de-duplication, employees may be made redundant. It also expressed an intent to review structures with an eye to de-duplication and improvement of profit including the areas of, but not limited to, overhead cost reduction, organisation, governance and management structures. Assets, business, employees and operations will be reviewed.
AHG currently operates a refrigerated logistics business and, if APE is successful, it will dispose of that business “as soon as commercially possible.”
And that, at the time of writing, is where the takeover stands.
Any future deal will likely have to be cleared by the competition watchdog, the Australian Competition and Consumer Commission.
Legislative amendments to Australia’s Heavy Vehicle Law introduced into Parliament
Mark Bailey, the minister for transport in the Australian state of Queensland, has introduced a new bill that would amend Australia’s “Heavy Vehicle National Law.” Australia is a federation of six states and two territories. It makes national law in two ways. The federal government can make a nationally applicable law in areas where it has authority to do so. Alternatively, in topics that the states and territories have retained authority, one state or territory will be nominated as the host jurisdiction. It will write and enact a model law that the other states and territories will copy albeit with amendments to tailor the law to their particular requirements.
Queensland is the host jurisdiction for Australia’s Heavy Vehicle National Law.
Minister Bailey’s bill would implement nationally agreed reforms and amendments to the Heavy Vehicle Law.
“Amendments are proposed to the national law to make a range of policy and maintenance amendments that reflect changes to the regulator’s functions. These changes will better manage access for high-performance vehicles, improve roadside enforcement and the uniform application of national policy and safety objectives across participating jurisdictions,” Minister Bailey told the Queensland Parliament.
Key aspects of the bill include enabling the National Heavy Vehicle Regulator to give advice, information and education to a person about how to comply with their duties and obligations under the national law. Another important measure is to increase the allowable height for semi-trailer combinations from 4.3 metres to 4.6 metres under certain circumstances. “ This amendment will reduce the administrative burden for industry and road managers, as specified semi-trailers will be able to operate on the road network at 4.6 metres in height without additional authorisation, such as a notice or individual permit,” the minister said.
Another important element of the bill is that it will harmonise penalties for high productivity trucks of less than 20 meters (65.6 feet) that are found to be “off-route” (i.e. on a road without proper authorisation under the national law).
The bill also introduces a wide range of technical and administrative measures.
Aussie new truck sales market comes off the boil
It’s a tale of several markets for Australia’s new truck sales markets, according to the Truck Industry Council, which both represents Australia-based truck manufacturers and compiles leading industry new truck statistics.
In the 2019 year to end-March, Australians bought 8,318 trucks (all types). There are two interesting points about this data. Firstly, it’s a 4.1 percent decline from the prior comparable period of March 2018 and, secondly, it’s the second-highest first quarter sales volume for that segment on record (beaten only by the figures from the first quarter of 2018). Perhaps the best interpretation of this data-point is that the market has come off its peak. Whether this is a harbinger of a more sinister downturn… we can only wait and see.
First quarter 2019 sales of new heavy trucks marginally increased by 0.4 percent on the prior comparable period. That’s an increase of 12 trucks over the first quarter of 2018 to stand at a total of 2,195 heavy vehicles sold. A tiny little increase it may be, but it also sets a new record for first quarter sales volume.
Volumes of medium-duty truck sales fell by 6.6 percent in the first quarter of 2019 compared to the same quarter last year. The Truck Industry Council says that the segment is “losing more ground than any other this year.” Sales of medium-duty trucks stood at 1,651, down by 117 trucks compared to the first three months of 2018.
Light-duty truck sales hit a record high in 2018… and in 2019 they’ve slumped. First quarter 2019 light-duty truck sales “lag those of the same period last year” by 6.6 percent, which is 169 fewer trucks sold, to stand at 2,406 for the three months to the end of March 2019.
Sales of light-duty vans have also fallen. At the end of March 2019, there were 1,346 light-duty van sales, which is down 5.8 percent on the prior corresponding period.
Tony McMullan, CEO of the Truck Industry Council, reflected on the sales results. “March sales are consistent with the trends seen in all heavy vehicle segments year-to-date, with Medium and Light Truck and Light Van segments tracking around 6 to 7 percent down on 2018 results. The surprise continues to be the Heavy Truck segment that is in-line, or slightly ahead of the record sales that we saw for this segment last year. It should be noted that even with the mid- and bottom-end of the market softening, truck sales to the end of March are the second-best on record.”