Transport industry seeks flexibility from banks due to floods

Financial institutions say they heed peak bodies call to help vulnerable operators

Transport industry seeks flexibility from banks due to floods
Transport industry seeks flexibility from banks due to floods
By Rob McKay | January 17, 2011

The Australian Trucking Association (ATA), with the backing of member organisations, will lobby banks and equipment financiers starting today to seek flexibility on loan repayments for smaller operators made vulnerable by the Queensland floods.

With equipment finance costs including depreciation totalling 22 percent and smaller operators unable to push for speedy payment terms from customers, many have been left financially exposed due to vehicles being made idle, ATA Communications Manager Bill McKinley says.

He is confident of getting a sympathetic hearing, saying banks had always shown an understanding and a willingness to take natural disasters into account when dealing with clients that have a good credit record.

NatRoad Chief Executive Bernie Belacic says help is available for owner drivers and small trucking operators who cannot earn an income because of the floods.

"The Australian Government had introduced a special Disaster Income Recovery Subsidy, which is $469.70 per fortnight for a single person," Mr Belacic said.

"Affected operators should apply to Centrelink on 180 22 66.

"Trucking companies affected by the floods should also talk to their bank or financier about whether they can put special arrangements in place for their loan repayments.

"Australia’s trucking industry associations will be pressing the banks to be generous to trucking operators who cannot meet their loan repayments for a short time because of this unfolding tragedy."

GE Capital has been calling customers in affected areas since last week to talk about their position and offer help.

"Some have taken that up, some haven’t, saying that they are alright, which you’ve got to admire," spokesman Sean Walsh says.

Though advice and assistance was offered case-by-case and were specific to individual operators, options including repayment holidays stretching over several months had been offered.

"GE Capital encourages all our customers to contact us if they have been affected and we can work with them on an appropriate solution because it’s a very difficult time and we don’t want them to worry about their finances when they are trying to get their lives and livelihoods in order," Walsh says.

He urged those customers of other firms to do the same with their finance companies.

More generally, related firm GE Money has said it could look at:

· restructuring loans and waiving applicable fees

· suspending loan and credit card repayments

· suspending accrual of interest on loans and credit card accounts

· considering credit limit increases for emergency relief

· prioritising and expediting settlements on insurance claims

National Australia Bank (NAB) also assured customers that it was sensitive to the issues surrounding business disruption in terms similar to GE Capital.

"NAB continues to monitor the situation in Queensland regarding its support for customers, staff and local communities," Sharon Keller, Corporate Affairs Senior Manager at NAB Business Banking, says

"Our team of dedicated business bankers are working with clients who have experienced disruption as a result of the current floods and managing these on a case-by-case basis.

"We encourage all impacted customers to contact us as soon as possible so we can assess their needs and help tailor assistance."

Meanwhile, with some operators adding flood surcharges, due to forced diversions of perhaps four times normal distances or more, McKinley says extra charges to cover extra costs were "entirely appropriate".

He discounted suggestions that the extra payments sought could open such operators to charges of gouging at a time of devastation and emergency, saying industry players "compete ruthlessly" and there was "very limited scope" for sharp practice.

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