Scott’s Refrigerated Logistics that supplies to Coles and Woolworths collapses

A trucking company that supplied all the major supermarkets is being liquidated after a buyer could not be found for the shaky business, with 1,500 employees now in the lurch.

Sydney-based Scott’s Refrigerated Logistics, which is Australia’s largest cold chain logistics operator, went into receivership on Monday and staff were told on Friday afternoon they had been made redundant.

Investment and consulting firm, KordaMentha, broke the news to staff that a buyer was not found in time for the struggling company.

Scott now owes up to $50 million in employee rights, the aussie reported, that it will be financed by the government’s dismissal plan.

Scott’s is a key freight forwarding company for Coles, Woolworths, Aldi, IGA and Foodbank Australia.

Supermarket giants immediately launched contingency plans to minimize any disruption to their customers.

Coles and Aldi, which accounted for about 18 percent of Scott’s business, have arranged for other trucking companies to haul their products.

The company’s fleet of 500 trucks and 24 cold rooms will also be sold in the liquidation process.

It is believed that Scott’s could have been sold before the collapse as a measure to stay afloat, with companies including Lindsay Fox’s Linfox, Lindsay and ASX-listed Toll Global reportedly showing interest, but any potential sale fell through.

Inflation, disruptions in the global supply chain, wild weather, worker shortages and the Reserve Bank’s nine consecutive interest rate hikes are believed to have weighed heavily on the business.

The Transport Workers Union says operators in the transport sector have been left to fend for themselves in a broken market.

“Retailers are reaping the profits from razor-thin margins, while carriers and drivers are collapsing under the pressure,” said National Secretary Michael Kaine.

The TWU hoped that the company would be sold to a ‘responsible’ buyer and that the workers would have priority in a deal.

The company has laid off some 1,500 workers and will have to sell its fleet of 500 trucks

Scott’s supplies major grocery stores in Australia, either directly or through other distributors.

An Aldi spokesman said: ‘Our thoughts are with the employees directly affected.

“We are confident that the high demand for talent in the logistics industry means that the employability of Scott’s employees is extremely high.”

Aldi said they hoped the “challenges Scott was facing had been overcome, saving jobs and maintaining competition in the trucking industry.”

“Following challenges presented this week by Scott Refrigerator Logistics, we have worked with our existing logistics partners to ensure that the 3 percent of Scott’s business managed for Aldi now passes to other logistics partners,” said the spokesman.

“As we transition volume, we will work to minimize any impact to Aldi customers regarding product availability and to ensure continuity of product pickup from our valued supplier partners.”

Last year, Scott leveraged his trucking fleet to get nearly $100 million worth of loans, but it wasn’t enough to save the company.

Its most recent financial report, which covers a 16-month period ending June 2021, shows the company had billed $542 million but lost $7.3 million.

Coles and Aldi, which account for about 18 percent of Scott’s business, have activated contingency plans to cover disruptions in their supply chain.

Insolvency Australia, which produces the bi-annual business insolvency index, says businesses are under pressure.

“We start 2023 just as we ended 2022, with rising interest rates, rising cost of living, labor and material shortages and the tax office continuing its toughest debt collection stance,” said director Gareth Gammon. .

Coles said he was working to minimize the impact on consumers.

We are working quickly to transition to our other transportation partners and are closely monitoring deliveries throughout our supply chain. We are working hard to minimize disruption to customers and our farmers and suppliers as deliveries increase,” a spokesperson said.

Woolworths said it was working with supplies for ‘continuous major product to our distribution centres’.