The Australian Trucking Association is calling for mandatory 30-day payment terms across the road transport industry, arguing trucking businesses should no longer be forced to bankroll customers while waiting for invoices to be paid.
ATA CEO Mathew Munro said the Fair Work Commission should require customers to pay trucking invoices within 30 days as part of its consideration of a proposed road transport contractual chain order.
The Commission is preparing to hold hearings into an application from the Transport Workers’ Union, with payment terms, rate reviews and cost recovery among the issues under consideration.
Munro said faster payment was critical in an industry characterised by high operating costs and tight margins.
“Survey research that we provided the commission shows that 20 per cent of operators who issue their own invoices are typically paid more than 30 days after the invoice is issued,” Munro said.
“These businesses are operating as banks for their often very large customers. It’s not acceptable, it was never acceptable and it needs to stop.”
The ATA wants a 30-day maximum payment period to apply broadly across the industry, along with low-cost options for recovering overdue payments and a default daily interest rate for late invoices.
The association has argued its approach would be more practical than the TWU’s draft order, which proposes 21-day payment terms where invoices are issued within seven days of the work being completed.
According to Munro, that condition could leave a significant number of operators outside the proposed protection.
“The evidence we provided the commission shows that 29 per cent of the respondents to our survey did not issue invoices within seven days,” he said.
“Under the TWU draft, these businesses would miss out on the benefits of maximum payment terms.”
The ATA is also supporting regular reviews of freight rates to ensure operators can recover changing business costs.
Its submission proposes fair and reasonable rate reviews at least annually, while businesses without fuel surcharges or fuel levies would need fuel-related costs reviewed at least quarterly.
Munro said operators should also be able to factor increases in other major transport costs into those reviews.
“The ATA submission also proposes adding changes to the road user charge, tolls and port access charges to the matters that may be included in rate reviews,” he said.
The Fair Work Commission hearings will consider how any contractual chain order could improve commercial conditions for road transport operators while balancing the different contracting and invoicing arrangements used across the industry.
