Industry group believes reducing payment terms will be more effective than fixed pay rates.
Minimum pay rates for owner-drivers will price them out of the market and jeopardise their survival, according to industry group NatRoad.
The trucking association, which is strongly opposed to fixed rates, claims its members have contacted it expressing serious concerns about the proposal from the Road Safety Remuneration Tribunal (RSRT) to introduce minimum hourly and kilometre payments for contractor drivers.
NatRoad claims the RSRT’s proposed payments are above existing market rates for owner-drivers and will, if introduced, lead to more businesses using fleet operators, which the tribunal’s order does not apply to.
“Contractors that use employee drivers are not bound to the draft rates and could quite legally quote the current market rates to secure the work. NatRoad has received broad based concern from members that the viability owner-drivers will be damaged by this order,” a statement from NatRoad says.
“Given that the draft rates appear to be pitched above current sub-contractor rates and that the same rates apply to both forward and return trips for all east coast locations, the draft rates are not reflected in current market rates. Accordingly, there is strong concern that owner-drivers will be priced out of the market.”
NatRoad says a reduction in payment terms will do more to improve the viability and safety of transport operators.
NatRoad wants seven-day payment terms, which would mark a substantial change to existing practices that can involve terms of 90 to 120 days.
It adds that there should be greater flexibility in the booking of timeslots and mandatory payment for waiting time at loading and unloading centres when onsite delays are beyond the control of the trucking operator.
NatRoad claims the RSRT’s proposed rate structure is significantly different from current practices because it sets a rate based on time taken plus distance travelled when completing a job and only covers full loads.
“There is no mechanism for part loads and no method for pricing based on size, pallet rate or weight that are the basis for current market rates,” NatRoad says.
“This presents a major challenge for many predominantly rural businesses that rely on cheaper return load rates to deliver their products to market at a competitive price.”
NatRoad says the RSRT’s proposal is not practical or sustainable given the diversity of the freight tasks that exist in the trucking industry.
“Similarly, mandating a minimum rate for one group of operators whilst other operators have the ability to undercut the minimum rate is neither fair nor sustainable,” it says.
“The draft order is clearly unworkable on every level and should not be issued.”