Reflecting on the fallout from Cootes Transport

Was rear view auditing to blame for Cootes’ losing its reign as Australia’s largest fuel-trucking company?

The story of a chain of events that started with one fatal accident and led to a huge fall out for Cootes Transport is a sad one. It reminds us that one incident can spark a huge impact on a company and how we need to ensure efficient and effective safety auditing systems.

Following on from the crash, the truck’s owner, Cootes Transport, had its fleet audited by VicRoads, which found defects on 114 out of 128 vehicles. They subsequently lost the contract to supply fuel to Shell petrol stations from June 2014 and failed to make the shortlist for the BP supply contract in NSW. This puts 150 jobs at risk and wiped $131 million from the company’s market value.

In this case it seems a failure in the auditing of Cootes’ risk controls was a major contributing factor.  Large amounts of money are often spent on identifying and mitigating risks, but it seems there are never enough resources available to ensure these controls are operating effectively.

I’d expect the people at Cootes’ knew they were pushing their trucks harder to keep up with demand, but did they have an effective way to tell them when they were about to push too far?

Keeping down costs is so important in this industry. An investment in a more proactive continuous risk-based auditing system would have been a more effective solution by  identifying and addressing problems before they have a chance to impact on the bottom-line and, more importantly, employee and public safety.  Most likely this would have worked out cheaper as a risk control process investment too.

Unfortunately, too many companies still do auditing for audit sake rather than seeing it as an opportunity to grow value.

These comments are based on public media articles rather than any inside knowledge of Cootes’ internal process.

You can read more about the story at:
http://www.theage.com.au/business/fatal-crash-fallout-costs-cootes-transport-jobs-and-major-fuel-contracts-20140130-31plm.html
http://www.theage.com.au/national/rise-in-fires-and-mechanical-failure-fan-truck-maintenance-questions-20131007-2v4cy.html#ixzz2saAGm51n

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