Bulk haulage firm suggests banning transport companies from operating if they fail to settle accounts within 30 days
By Brad Gardner | February 4, 2011
A bulk haulage firm has suggested banning transport companies from trading if they fail to pay sub-contractors within 30 days of work being completed.
Annric Bulk Haulage, which is part of Rural Bulk Haulage Cooperative, has urged the Federal Government to focus on payment terms as part of its safe rates reforms.
In a written submission to the Government, Annric wants a new licensing system established whereby all companies involved in transport must pay an annual registration fee to be able to directly or indirectly operate trucks.
“A thirty day maximum payment system should be legislated and adhered to by all industry participants. Failure to pay sub contractors within the set time frame may lead to restraint of ability to trade or cancellation of the license,” Annric writes.
“The main issue is the time frame to pay contractors and sub contractors in many cases. The popular payment system of 30 to 60 days after end of month is not satisfactory.”
Annric writes that timely payment will ensure sub-contractors can meet their financial obligations, in turn leading to fewer business failures and heavy vehicle accidents.
“The long lead time for sub contractors to receive payment can also lead to longer working hours, overloading and fatigue related crashes,” the company says.
The Federal Government is planning to introduce a new payment system in response to findings that low rates of pay lead to unsafe practices.
It has proposed an independent tribunal be given the power to rule on what constitutes a safe rate to ensure owner-drivers are paid enough to make ends meet.
Annric says the proposed tribunal should oversee the licensing system and that it can be funded from the fees paid by companies involved in transport.
It recommends a six-tier system that separates small operators from larger multinational carriers and warehouse businesses. Those in a higher tier will pay a higher fee, Annric says.
Once the fee is paid, Annric says businesses will be given a registration number to show they are allowed to operate trucks.
“This registration number would have to be quoted on all paperwork relative to any transport related activity,” it says.
While groups such as the Australasian Fleet Managers Association and the South Australian Road Transport Association dismiss the notion of safe rates, Annric says reform will allow sub-contractors to focus more on safety and spend more time with their families.
“The fact rates are so low as opposed to the actual costs of running a transport business will contribute to overloading, fatigue and unnecessary business failures,” Annric writes.
The company says a safe rate should be calculated based on the fixed and variable cost of operating a truck. This includes registration, insurance, fees and permits, accreditation, wages and superannuation, vehicle depreciation, fuel costs, tyres and maintenance.
“The base safe rate set must also be flexible to increase in line with CPI increases annually,” Annric says.
Under the Federal Government’s proposed scheme, a tribunal will be established with the capacity to set different rates for industry sectors and distinct rates based on vehicle configurations and types of trucks.
The Government says a safe rate will be the minimum rate necessary for an owner-driver to recover and earn the equivalent of the Award wage while driving safe and reasonable hours.
Stakeholders have been given until February 11 to have their say on the proposed scheme.
Should payment terms be included in a safe rates scheme? If so, what is an acceptable payment term? Leave your thoughts below.