DP World’s refusal to extend pay terms is unfair, CTAA states

By: Anjali Behl


Chambers says DPWA should follow Patrick’s footsteps in changing its payment terms to 30 days

DP World’s refusal to extend pay terms is unfair, CTAA states
Chambers says CTAA will raise the matter with both the ACCC and the ASBFEO.

 

Container Transport Alliance Australia (CTAA) says DP World Australia’s refusal to concede to new payment terms is both "arrogant" and "disrespectful" towards its customers.

Director Neil Chambers says last month the CTAA and a number of its members had written to DP World Australia MD and CEO Paul Scurrah to consider extending its payment terms in the wake of new infrastructure surcharges.

While DP World Australia COO Max Kruse acknowledged this fact in an official statement yesterday, he stated that the company will stick to its 14-day payment terms, with invoices issued weekly.

In the short notice sent out to DP World customers, Kruse apologised on behalf of the company for giving landside transport customers a two-day notice to return the new access agreements.

However, the CTAA is not convinced.

Chambers says the apology is "immaterial because it doesn’t change anything".

"They [DP World] still have the power to refuse entry to carriers if their conditions are not met."

Chambers says the stevedore has ignored the requests of carriers to extend payment terms up to at least 30 days so that smaller transport operators do not face problems related to cash flow owing to existing agreements with their clients.

"With DP World issuing weekly invoices, this effectively means that transport operators will end up paying every week even though they may not receive payments from their clients for as long as 30 or 60 days in some cases," Chambers tells ATN.

"Irrespective of the apology… the issue of the payment terms offered by DPWA is an important one given the financial cash-flow stress being applied to container transport operators by the impost of the infrastructure charges."

Comparing DPWA’s actions with that of Patrick, another stevedore giant that announced plans to introduce infrastructure surcharges across its terminals, Chambers says at least the latter conceded CTAA’s requests and extended payment terms for all its landside customers to 30 days.

"…[Patrick] at least acknowledged the fact that transport operators would have cash-flow concerns caused by the large infrastructure surcharge amounts, unless they aligned their payment terms more closely with the commercial arrangements that transport operators have with their clients – typically 30 days from the end of the month," he says.

"CTAA asked DP World to do the same thing but they ignored our requests."

Chambers says CTAA plans to raise the subject with the Australian Competition and Consumer Commission (ACCC) and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) as an "example of a big, monopolistic business dictating unfair payment terms on smaller businesses".

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