ATA to probe extended payment terms issue


State member organisations express unanimous concern over contracts that allow payments up to 120 days after the service is provided

ATA to probe extended payment terms issue
ATA CEO Christopher Melham

 

The Australian Trucking Association (ATA) will conduct an investigation into the extent and consequences of extended terms of payments for transport operators.

The ATA council has resolvied to be proactive on the issue.

State-based member organisations expressed unanimous concerns about freight customers reportedly extending their payment terms to up to 120 days after a transport service is completed 

ATA CEO Christopher Melham says extended terms place significant financial pressure on road transport operators, who need to pay their own suppliers and staff, including drivers, in a far shorter window of time.

That pressure can cascade down from cash flow problems into road safety concerns.

"Trucking operators work on small margins, and most are small businesses," Melham says.

"As price-takers, they are being forced to accept terms of up to 120 days due to the market power of large clients.

"It is important that customers, like large retailers, ensure their payment terms and price demands on the trucking industry are not forcing small businesses and owner drivers to cut corners, resulting in unsafe and illegal business practices."

Payment terms have been a hot-button issue in transport circles in recent months, with two country-based senators first raising the potential for a Senate Inquiry in August.

Labour senator for WA Glenn Sterle and Nationals senator for NSW John Williams say they are considering options to force more timely payments to transport companies.

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