Senate Committee should focus on Customer Practices

The National Road Transport Association (NatRoad) has welcomed the Senate Committee inquiry into the road transport industry.

CEO of NatRoad Warren Clark said, ”There are a number of transport industry inquiries currently underway, including a Productivity Commission inquiry into transport regulation and a National Transport Commission review into the Heavy Vehicle National Law.

“We were part of devising the basis of the current Senate inquiry’s scope. The Inquiry will be useful in covering issues which focus on customer behaviour and the unacceptable culture that has developed in the industry. That must be the priority. For example, customers should not expect transport operators to accept substandard contracts which are unfortunately growing.

NatRoad members tell that contract conditions in the industry are creating unfairness and are adding to commercial pressures. Often members are asked to sign contracts where they must ‘hold harmless’ the customer, which means they are effectively insuring the customer for all losses, with extended indemnities being required. This is one example of where the transport operator is asked to take on all of the risks associated with the contract, including indirect losses.

“Giving an indemnity in this one-sided way means making good any loss that arises. This includes a breach of the contract, but it also often extends to other events, including events over which the transport operator has no control that arise because of a breach. For the customer, it is like being insured against the loss; for the transport operator it can mean adding to the liabilities and losses associated with doing business.

“As we have said in giving input to other reviews, creating a more level playing field and improving contract terms and conditions must be seen as issues that need urgent attention.

“NatRoad policy to achieve these aims is for the federal Government to introduce a mandatory code for the industry under Part IVB of the Competition and Consumer Act 2010 (Cth) which would address harsh payment terms in transport industry contracts inclusive of a “pay when paid” prohibition.  That will be a matter we emphasise in our submission to the Senate Committee inquiry.

“In addition,” said Clark, “looking at all of the fundamentals of how the industry operates and marrying them with the expected outcome of the Heavy Vehicle National Law will be a valuable process.”