Comment: Government addressing concerns of transport industry

By: Nick Leggett, Road Transport CEO

The current Government deserves significant praise for listening to our industry and taking action on a couple of issues that affect road transport operators

First was the release of a public discussion document on unfair commercial practices, including the insidious practice of Unilateral Deferred Payment (UDP). RTF has lobbied hard for action on UDP for a number of years, so we are especially pleased that the Government has listened to our concerns.


For those unfamiliar with the issue, UDP sees large companies extend payment times to their suppliers out to two, three or four months, which has a major impact on many small New Zealand businesses, including a number of transport operators.

The obvious advantage for big corporates is that they can use their suppliers and transporters as a cheap source of finance. That’s fine if you don’t have bills to pay. But this is just not the reality for most small New Zealand firms. The discussion document is therefore a bit of light at the end of the tunnel for those businesses.

RTF’s proposal is for a simple amendment to the Fair Trading Act, which would extend the protections that consumers already enjoy from unfair contract terms to small businesses also. This is one of the options included in the discussion paper, but it’s not the only one.
Another option under consideration seeks to incorporate unfair contract terms alongside a much broader approach that would seek to prohibit ‘unconscionable conduct’.

Unconscionable conduct is defined as a statement or action deemed so unreasonable that it defies good conscience. An unconscionable contract therefore is a type of contract that leaves one party with no choice, due to major differences in the bargaining power between the parties.

Going down this path presents an absolute minefield, not only for the courts to interpret but for most SMEs that have neither the time nor the money to actually test such ambiguous legislation.

As RTF will be putting forward a submission on behalf of the sector, we require feedback from operators. Please send any comments you have to me by 18 February. The consultation document is available on the MBIE website.

The other positive Government announcement prior to Christmas was the proposal to introduce sector agreements as part of a suite of immigration changes, designed to alleviate workforce shortages in key industries, including road transport.

It is estimated that the New Zealand road transport industry is currently around 4000 drivers short of where we should be, based on today’s freight task.

With the country’s population and economy predicted to keep growing over the next couple of decades, the amount of freight will only keep expanding, meaning the gap between the workforce required to do the task and the workforce we actually have will only keep widening.

The sector agreements are designed to provide employers with greater certainty of access to temporary migrant workers (over the three-year duration of the agreement), more efficient visa processing and possibly more favourable visa conditions.

In return, employers would need to commit to improvements to industry productivity, investment in the training and development of domestic workers and better conditions for both domestic and migrant workers. The Government’s proposal is that the agreements are made compulsory for employers seeking to recruit migrants into that sector.

The road transport sector agreement, which is proposed to be up and running by 2020, will not magically solve all our workforce issues. But it does have the potential to alleviate some of the most acute shortages in certain parts of the country and give us the breathing room to attract more domestic workers to our industry.

Again, the consultation document is available to read on the MBIE website. Please send me your thoughts and we will incorporate them into our submission on behalf of the industry.

Nick Leggett is the CEO of the Road Transport Forum and is contactable at

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