The transport industry terms of payment motion has been welcomed by the transport industry peak body after being introduced to the Senate by former truck drivers, Nationals senator John Williams and Labor Senator Glenn Sterle last year.
The Australian Trucking Association (ATA) welcomed the motion through the Australian Senate recently to address the problem of larger companies that unfairly strongarm trucking operators into accepting extended payment terms, sometimes up to 120 days.
This long payment term can affect operators cash flow and in the past has resulted in them failing to meet their financial commitments such as paying employees, making lease payments and paying for the upkeep of vehicles and equipment.
The motion calls for companies to adopt payment terms of 30 days or less, which is compliant with the requirements of the Road Safety Remuneration Tribunal for owner drivers and sub-contractors.
ATA CEO Christopher Melham was recently quoted by a post on Fullyloaded.com.au stating about the motion,
“We know there’s sometimes a perception in trucking that if the wheels are turning, you’re all good,” “But operators that agree to extended payment terms still need to pay their own creditors on their existing cycles – for example, this could include 21 day payments to fuel suppliers, 30 day payments to small owner-driver subcontractors, and weekly or fortnightly payroll payments. “I am delighted to see the Senate’s acknowledgement of this issue, and congratulate Senator Williams and Senator Sterle for their passionate advocacy of trucking operator concerns,” Melham says. For more go to: http://www.fullyloaded.com.au/industry-news/1602/ata-backs-senate-payment-terms-motion/Williams and Sterle issued a joint statement last year which warned that they would be launching formal inquiries against businesses that engaged in this pratice. They agreed that long payment terms have an adverse effect on transport operators as well as their employees. The ATA promised earlier to investigate the extent of the 120 day payments and the consequences after state member organisations expressed their concern over contracts allowing extended payments, which according to FBT Transwest manager Cameron Dunn are becoming more common. He was speaking at a road safety conference last year when he spoke about the problematic 120 day payment terms. Meanwhile, the Australian Trucking Association is apparently working on a best practice trucking industry contract checklist to provide guidance on setting payment terms for trucking operators and their customers. This checklist, once complete will be made available to members of the ATA’s member associations. The checklist will be officially launched at Trucking Australia 2016 in June.
