Lawyers within the transport and logistics industry are facing a number of regulatory changes thanks to new government strategies aimed at boosting the nation's transport network. Briana Everett reports

What the experts say

"You'll often find that liability for the soiling of goods, as a result of market pressures and demands, is pushed back onto owners and drivers... That has certainly been a big issue for drivers”

Matthew Hibbins, partner, Minter Ellison

"It's an industry [in which] you can't dabble. Within ten seconds of opening your mouth a customer will know you're not an industry specialist."

Stephen Thompson, partner, Middletons

“The primary challenge of T&L really comes back to the breadth of the concept. You have varying regulatory regimes, some of them varying on a state-by-state basis.”

Simon Brady, partner, Clayton Utz

The transport and logistics (T&L) industry is responsible for 14.5 per cent of Australia's gross domestic product and is worth approximately $150 billion to the country each year, according to the Australian Logistics Council.

Encompassing 165,000 businesses and employing over one million Australians, the T&L industry is one often referred to as the backbone of the economy, affecting how goods are delivered to supermarkets, how imports and exports are transported, how people move from place to place and in turn, affecting our standard of living.

Lawyers working within a network that encompasses ports, railways, roads, airports, freight terminals and distribution centres must grapple with a complex mix of legislation and regulatory agencies across the commonwealth, state and territory governments.

"It's a very broad area. It's very difficult for anyone to master," says Clayton Utz partner, Simon Brady.

"The primary challenge of T&L really comes back to the breadth of the concept. You have varying regulatory regimes, some of them varying on a state-by-state basis. If you have the luxury of being able to have a larger team, then you need to get your lawyers to specialise in a particular mode. It's simply not possible for somebody to master all the modes."

Likewise, Middletons partner Stephen Thompson says the biggest challenge for the T&L practice area is relevance.

"It's an industry [in which] you can't dabble," he says. "Within ten seconds of opening your mouth a customer will know you're not an industry specialist."

A national investment

A lack of investment in Australia's infrastructure has led to calls in recent years by industry bodies for the government to ensure the country is equipped to deal with its growing transport demands. And with the recent flood crises in Queensland and Victoria, the country's infrastructure challenge has been aggravated further.

Following the devastating floods, Australia's reliance on the T&L industry became much more apparent, as disruptions to infrastructure and supply chains, as well as damage to goods, took their toll.

"There are going to be some short, medium and long-term effects [of the floods]," Thompson says, noting the short-term back log created by a number of port closures and the supply rationing caused by reduced stockpiles, particularly in the coal sector.

"In the longer term, there's going to be a lot of work to get [buckled railway lines and damaged bridges] back into place and some supply-chain work in the meantime."

Owner-drivers will also face issues regarding the provisions of their carrier contracts, according to Minter Ellison partners Matthew Hibbins and Ben Liu.

"You'll often find that liability for the soiling of goods, as a result of market pressures and demands, is pushed back onto owners and drivers. I know that the drivers' union is seeking to negotiate with various carriers in relation to that. That has certainly been a big issue for drivers," Hibbins says.

With Australia's freight task expected to triple by 2050 and local demand for freight movements to increase by as much as 60 per cent by 2020, the Commonwealth Government has committed to national reform of the Australian transport sector.

With complex regulation across all the states and territories, the government is now implementing a national approach, including a national ports strategy and freight network, linking rail and road.

Upon the formation of the Gillard Government in September 2010, the Australian Logistics Council chief executive officer Michael Kilagariff urged the government to renew its focus on national transport and logistics reform.

"The Australian transport industry is regulated by the commonwealth, eight state and territory governments, over 500 local councils as well as a number of government agencies. The result is a range of confusing, complex and inconsistent laws with high compliance costs," Kilagariff says.

"Prior to the election, there were already developing signs that the transport and logistics reform agenda was in real danger of stalling if it didn't continue to receive strong national leadership. National reform is a bit like riding a bike. If one stops pedalling and pushing the thing falls over and goes nowhere."

Infrastructure Australia, an organisation established in 2008 to advise the government on its infrastructure investment and reform, advocated a national approach in its 2009 priorities report, including the national freight and port strategies.

Responsibility for Australia's ports, which handle about 25 per cent of all freight, is currently shared across all levels of government, and according to the National Transport Commission, a nationally coordinated approach to planning and developing port infrastructure is essential for Australia's economic growth.

This increased expenditure on infrastructure, according to Thompson, presents both challenges and opportunities for lawyers working in the transport field.

"We're currently in the process of evaluating how we're going to spend a great deal of money on supply chain infrastructure," says Thompson. "It presents more opportunities more than anything else, [as a] service provider to the emerging supply-chain infrastructure investment wave that we're just starting to get to the crest of."

Brady notes that while the national approach makes sense from a planning and logistics perspective, it still needs agreement from all the states.

"It's still early days. The commonwealth is really pushing this agenda. I think we'll see some further activity in the area this year. I think the aim is, at least in terms of the national port strategy, to look at synchronising state legislation towards the end of the year or early next year," he says.

Keeping them busy

Aside from the government's ongoing national reform, lawyers in the T&L field have been kept busy with various trends and developments within the industry.

There has been increased M&A and IPO activity with developments such as last year's privatisation of Australia's largest rail freight operator, QR National, while the consolidation of transport operators, infrastructure access issues and changes to Australian consumer laws have also had an impact. The industry has also witnessed the growth of large corporates by way of acquisition and the formation of strategic alliances.

According to T&L lawyers, another development within the transport industry in recent years covers the changes to the industry's chain of responsibility (CoR) legislation, which requires that all parties in the transport supply chain abide by their obligations to prevent transport offences from occurring.

The National Transport Commission has introduced the development of a national compliance and enforcement reform package, including legislation which introduces new CoR requirements.

"The purpose of that legislation is to shift the responsibility away from transport service providers, particularly in road, to others in the transport chain. It's sharing that [liability] around," Brady explains.

According to Brady, as a result of the legislation major users of transport services are now focusing on their risk and liability profile, involving the examination of compliance regimes and appropriate measures to identify who's responsible for particular tasks.

Lawyers working in this area are now tasked with ensuring that terms and conditions within transport contracts have a clear allocation of responsibility of tasks between consignor and consignee.

Adding to an already busy sector, there have also been a number of regulatory changes to the shipping space, according to Thompson, including the extended application of the Fair Work Act to foreign-flagged ships and a recent policy proposal to dramatically change the tax regime for Australian shipping.

"[The changes to the Fair Work Act] have caused a great deal of consternation and confusion amongst foreign flagged ship owners," Thompson says. "The change to the Fair Work Act is the one that's set the cat most actively amongst the pigeons - to put it that way. So there's an awful lot going on."

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