‘Safe Rates’: what do we want?

“A typical small rural truck operator has to carry an overdraft, and pays about 11% interest, waiting for his invoices to be paid.

If you’re left waiting three months to get paid, that’s like cutting more than 2% off your bill – and that’s enough to eliminate any profit margin for many of our members.”

This is one of the key messages we took to Government in our formal submission at the start of this year,
and in all the discussions since then.

In that submission, and in subsequent work, we’ve highlighted a number of goals that we’d like to achieve.

1. Get paid in full, get paid on time. Can there be any excuse for leaving small operators waiting so long
to get paid? In Western Australia, there is State legislation that requires a small trucking operator to be paid in 30 days or be paid interest for the delay. There’s also a low-cost tribunal that our WA members have successfully accessed in order to secure payment.

Why can’t this go national? Our members in other parts of the country deserve the same fair payment guarantee that is assured in Western Australia.

2. Get paid for waiting time. In NSW, the Government has legislated to create an obligation for stevedores at Port Botany to make demurrage payments when transport operators are unduly delayed. Since that scheme was introduced, the notorious queue at Port Botany has changed dramatically. I’m told trucks are now turning around in 50 minutes, rather than the typical three hour delay that used to be a constant blight on operators.

Can we have this arrangement at other key loading centres across the country?

We’re looking for something that goes beyond Chain of Responsibility. If you’re left stuck in a queue, you shouldn’t just be left hoping that some regulator will eventually have enough backbone to fix the problem. Why can’t you also be given a legal right to issue an invoice when you’re faced with an unreasonable amount of lost time?

3. Get paid for wash-outs and other on-costs. Even though the time taken to washout a truck can be heavily influenced by the manner in which a farm, saleyard or feedlot prepares the stock for transport, the costs of washouts are almost always born by the transport operators.

And although we have members who have had a ‘fuel levy’ as part of their billing arrangements for years, there are others who report that they keep get turned down on this approach.

These are what many economists would regard as classic ‘market failures.’ Price signals are failing to allocate costs efficiently across all the parties involved, are failing to minimise the incidence of washouts and are failing to give some of our members a sustainable payment for fuel costs.

4. Get legal backing for ‘standard term contracts’. For years now, a number of our State Associations have been working to get customers to recognise a ‘standard term contract’, so that our members have
a baseline to work from when dealing with customers.

Examples of that include the work in NSW, seeking an agreement with the grain sector, and the work
in WA, seeking indemnities from customers who load our members with unfit stock.

There are few, if any, laws that give any real help to our State Associations in those negotiations. And there are quite a few laws that actually make this hard to do.

Compare the transport industry with real estate. Whenever you buy, sell or rent a house in the country, your local real estate agents will compete vigorously on prices and fees, but what contract will they put
in front of you? A standard terms contract produced by their industry association.

We’ve also raised a pile of questions about how any new scheme would work in practice.

The foundation for our Association winning a seat in this new group comes down to one thing: the hard work of your National Council.

In 2010, National Council identified ‘Safe Rates’ as an issue that could turn into something big, and then Councillors put in the hard yards, investing nearly three months of work and many, many phone calls and emails in order to develop a very comprehensive submission.

That submission has been covered in the News on a couple of occasions and it’s on our website; find it here.

The most recent National Council meeting, on 30 September, reaffirmed that we wanted the Government to consult with us, and finetuned our policy position by adding in ‘standard term contracts’.

Mandatory disclaimer’: Of course, we need to be very clear that these are our goals. Being invited onto this Advisory Group doesn’t necessarily mean that the Government agrees with any of what we’re seeking. But if we don’t dare to try, we cannot hope to win!

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