2017 NatRoad Parliament Update on Pallets: The contract conditions carriers need to know about

At last years conference, members told us that Pallets were a real issue for their businesses, especially regarding delay times and the cost burden being put on carriers rather than receivers. Since the conference, we have been busy working with other industry associations to find a solution to make it easier for members.

Background

As per the pooling system used by suppliers, the pallets (with or without the goods) can be passed between multiple users without the prior approval of the owner. The person/business transporting the goods is responsible for the pallet costs until they are handed over to the receiver.

The carriers have to pay a daily hire charge until the return the pallets to the hire company or transfer to another hirer. In case the receiver loses or delays the return of pallets the carrier has to pay for loss or damage. In addition to this, the carrier needs to employ or hire resources to do the invoicing for the pallet hire adding to their business expenses.

What we recommend

We have listed a number of conditions that NatRoad Members can add to their contract to reduce the administrative burden of dealing with pallets:

  1. The person in possession of a pallet is in charge of its security and is obligated to pay the daily hire charge only for the period it is with them. The contract should make it clear that the responsibility of the pallet is passed on to the consignee/receiver once the load is delivered. When the liability for the pallets needs to be transferred onto the carrier the agreement should consider the delivery lead time and delay days as per commercial trading terms.
  2. All parties using pallets must have an account with the pallet owner and have pre-agreed transfer methods in place. As an account holder, completing stocktakes and reconciliations is the only way you can ensure you are only paying for what is in your physical possession (including Exchanges Owing and in-transit equipment) and what is on your account/invoice.
  3. Pallets should be either dehired to the consignee’s account or exchanged on a pallet for pallet basis at the time of delivery by the carrier. The consignee must give acceptance of this arrangement in writing.
  4. Where the carrier is not able to dehire or exchange a pallet then they should notify the consignor/shipper that it is their responsibility to make arrangements about the pallets.
  5. The carrier accepts responsibility for pallets only whilst it’s in their possession. They should not agree to pay for any delays caused by the shipper or receiver
  6. Pallets should be in a good condition before being stacked and loaded on to a carrier’s vehicle. A warranty or evidence should be sought from the shipper about this.
  7. Only clean pallets in good condition and fit for purpose for transporting the products carried should be used at any time.

Need professional assistance?

With more than 80 years of collective experience; the practical and friendly advisers at NatRoad can review your existing contract or draft a new contract tailored to your requirements. To talk to an expert, call us on 02 6295 3000 or email info@natroad.com.au