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What you need to know before signing a trucking contract

Data Blocks
Data Blocks

Trucking operators have two priorities underlying their every decision: running a profitable business and keeping their employees safe. You need a steady cash flow to pay wages and stay in business, but not at the expense of putting your drivers at risk.

Despite an increased legislative focus on driver safety in recent years, the figures are worrying. The latest findings from the Bureau of Infrastructure, Transport and Regional Economics show a 6.7 per cent increase in fatal crashes involving articulated trucks in the 12 months to June, compared to the same period last year. A 10-year study by the Australian Institute of Health and Wellbeing shows the number of people hospitalised with injuries posing a serious threat to life after heavy vehicle crashes is on the rise. With the Chain of Responsibility holding everybody in the supply chain accountable for complying with transport law, strong debate over what constitutes a safe and fair contract for trucking businesses, their drivers and customers has ensued.

The Australian Transport Association (ATA) recently released its best practice contract checklist, which aims to help trucking businesses ensure their contracts are fair and legal. It focuses specifically on the terms that are found in trucking contracts such as Heavy Vehicle National Law and pricing and payment terms, which the ATA says are essential for any trucking business. However, the Transport Workers Union (TWU) disagrees. It claims the contract checklist avoids making customers responsible for safety, threatening the sustainability of transport companies and owner drivers as well as risking lives on the roads.

Whatever side you fall on in this argument, the key issue is clear. Under financial pressure and time constraints, many trucking operators sign whatever document is required to secure a new job without weighing up what the contract means for their business and the safety of their drivers. Whether you’re a small trucking company or large multinational, here are three factors you need to consider before signing the dotted line for your next job:

  1. Fatigue – Pressure on trucking companies to complete jobs as efficiently as possible results in drivers taking risks to get it done. While the need for fatigue management within the transport industry may seem obvious, it’s very difficult for trucking operators to regulate and enforce, especially when you’re focused on improving your bottom line. The Heavy Vehicle National Law (HVNL) has three work and rest options. It’s crucial that your contract allows you to take all reasonable steps to operate under these conditions, to prevent drivers from spending an excessive amount of time behind the wheel.
  1. Maintenance – The start of the new financial year brought regulatory changes that will place greater emphasis on heavy vehicle maintenance. With increased consistency in determining that heavy vehicles are compliant, there’s no room for cutting corners. How does your contract account for maintenance? For example, you should have access to vehicle inspection requirements and documents, as well as a clear understanding of what you’re obliged to carry in-cabin for mass and maintenance management modules.
  1. Pricing and payment terms – The best way to improve driver safety is through practical measures. However, payment terms and timeframes are a prominent issue, particularly for small trucking operators. Reports emerged last year of trucking companies having to wait as long as 120 days to receive payment and resulted in the TWU urging for 30-day payment terms throughout the industry. You need a guarantee you’ll be paid within a suitable timeframe to help avoid financial hardship, reduced equipment values or increased debt.

Failing to examine the terms of your contract can lead to taking on risks that should belong to consignors, signing contracts with illegal chain of responsibility stipulations, or accepting payment terms you don’t have the cash flow to support. Now is the time to ensure what your contract means for your fleet, your drivers and your business.

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