ATA to warn against 'dangerous' fixed rates

ATA submission to pay rates review to argue against "dangerous" fixed rates, and support speed and fatigue enforcement measures

By Brad Gardner

Export industries may be crippled and consumers may suffer price hikes if freight rates are fixed, the trucking lobby will argue in its submission to a review into remuneration methods.

The Australian Trucking Association’s (ATA) submission, agreed to during its council meeting yesterday, will argue in favour of speed and fatigue enforcement measures as opposed to government intervention in the marketplace.

The submission to the National Transport Commission’s (NTC) review into pay rates is expected to also call for governments to put greater pressure on banks before issuing loans to prospective owner-drivers.

Steve Shearer, the executive director of the South Australian Road Transport Association (SARTA) who formulated the ATA’s position, says the Government will head down a "dangerous and unnecessary path" if it overhauls pay methods.

He says transport costs make up about 17 to 20 percent of a product’s cost structure by the time it reaches the market, and any wage increases—which make up about a third of transport costs—will have a detrimental effect because operators will pass on price hikes to customers, such as retailers.

However, he says the greatest impact will be felt by the wine and livestock industries, which deal in a highly competitive international market.

"When you are looking at wine on the international market, if exporters change their price by as little as one percent then they start losing sales. You could price these things out of the market if you add extra costs," Shearer, who also chairs the ATA’s safety group, says.

The ATA’s submission will argue impending fatigue management laws are the key to driving safety outcomes because of their stringent chain of responsibility laws, which will be introduced on September 29.

"At the end of this month it will be a very different world and these new rules will comprehensively deal with the minority who work excessive hours as well as deal with the minority who pressure people to work excessive hours," Shearer says.

He claims customers and distribution centres are already altering practices as a result of the new measures by introducing timeslots and managing arrivals and deliveries to reduce truck queues.

"We think it is unnecessary to take the major risk of another mechanism called safe rates. The fundamental safety issues at hand are to do with speed and fatigue, and that is of course driven by work and rest areas," Shearer says.

But Shearer says governments need to impose "rigorous demands" on the banking system to make sure those wanting loans to start their own trucking business are aware of the costs involved.

This includes measures to make sure loan applicants have an understanding of the trucking industry and also have cost structures.

Shearer says the best way forward is an education-based approach to help contractors understand their costs, how much they need to charge to make a profit and how to negotiate.

But while conceding there will always be customers and prime contractors that do not pay adequate rates or levies, Shearer criticises sections of the industry demanding government intervention in the marketplace.

"This industry cannot keep running around saying, ‘It is too hard for to negotiate so I need somebody to impose it [a rate]’", he says.

"If you are in business then you must stand on your own two feet with all the help you can get. But you have got to make sensible business decisions."

The NTC review into the link between safety and remuneration and whether current pay methods are adequate will be compiled into a report and handed to the Australian Transport Council (ATC) when it meets in November.

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