Senators call for fair payment terms

Nationals Senator John Williams and Labor Senator Glenn Sterle have left their political differences aside to call for fair payment terms for transport operators.

The politicians – both former truck drivers – recently issued a joint statement in which they highlighted a growing trend for big businesses to demand extended payment terms of 90 days or more, in turn placing significant financial pressures on truck operators, who must pay their suppliers and drivers in a far shorter time frame.

Senator Williams has sighted a memo from a company which told the transport operator that they would be paid 90 days after the month in which the invoice was generated.

"This is outrageous," Senator Williams said.

"The transport company has to pay its drivers and staff in seven days, it has to pay its fuel bill in 30 days, plus parts suppliers and finance payments at the end of each month. But they are being asked to extend credit to much bigger businesses for up to 120 days."

Senator Sterle said that this practice would have a terrible impact on transport operators and their workers.

"If one of these companies fails and cannot pay their suppliers, the transport company can be hundreds of thousands of dollars out of pocket," he said.

"This can only lead to dangerous cost cutting and a lowering of industry safety standards."

Both Senator Sterle and Senator Williams said that they were looking at ways to ensure that payments to operators were made in a period no longer than 30 days.

A range of options, including a Senate Inquiry, were being actively considered.

Road Freight NSW General Manager Jodie Broadbent said it was ridiculous to expect trucking operators to extend credit to much larger customers.

"Trucking operators work on small margins, and most are small businesses," she said.

"It's insane that trading terms of up to 120 days are forced upon our industry purely because of the buying power of large retailers.

"The Senate inquiry discussed in the Senators' release would be helpful to stamp out such unfair practices."

The issue of extended payment terms was a hot topic at the recent 2015 NatRoad Conference, with the matter tabled at the advocacy body's annual Parliament. In conjunction with the Australian Trucking Association, NatRoad will now lobby the Federal Government on the issue and highlight the potentially adverse effects of the practice on transport companies and, ultimately, transport industry safety.