Logistics service providers are the businesses ensuring your local supermarket is fully stocked, and our agricultural and mining exports reach our global trading partners. Imagine dealing with the customs requirements at an Agadir seaport or a Riad airstrip. Or consider Angus cattle travelling from remote stations ten hours from the nearest town to Jakarta or Proserpine sugar cane travelling to Rockhampton for processing? If you run a logistics services business, you need comprehensively drafted contract terms to protect your business when you fly, drive or rail goods around Australia and the world. Below are four essential tips and clauses for your trading terms.
1. What Should Your Trading Terms Apply To?
Your trading Terms form a contract between your business and your client. To best protect your business, the terms need to cover all aspects of your business including the transport of goods and anything ancillary to the transport of goods such as loading, unloading, handling and storage.
Where possible, the terms should exclude liability when mandatory legislation does not deprive you of being able to do this.
Ensure the terms are provided to your client as soon as possible and are transparent, so your client fully understands the terms on which you do business. For example, provide a copy of your terms online and also provide them to a client in paper form.
2. Keep Records
Most logistics service providers issue a consignment note to their clients. The note should include a clear description of the customer, the goods, the place of receipt, relevant dates and a clear statement that goods are transported subject to the service providers trading terms.
It’s a good idea to keep records by issuing a consignment note (keeping a copy for yourself), in case issues arise later. If something goes wrong, you can clearly see what goods are involved and other relevant details.
3. Transporting Dangerous Items
Logistics service providers’ terms should refer to the Australian Code for the Transport of Dangerous Goods by Road and Rail (ADG), currently in edition 7.4. The States and Territories heavily regulate the transport of dangerous goods in Australia and your clients will have greater confidence in your business if they know you comply with the relevant rules and regulations.
4. Penalty Clauses and General Lien
Your trading terms should include clauses which help you get paid. Clearly outline your payment terms – are you paid before or after for your shipping goods? How long do clients have to pay? If clients fail to pay or delay in paying, what are your remedies?
Some trading terms include general lien terms, which means that if a client does not pay, the logistics provider has the right under contract to keep possession of the goods until receiving payment or to sell the goods to recover the debt.
In short, shipping goods around Australia and the globe involves significant risk exposure, highlighting the need for well drafted trading terms. Ensure that your terms cover all aspects of the service you provide, keep records, include clauses relating to transport of dangerous goods and include penalty clauses such as the right to possess goods for non-payment. Importantly, if you have any questions – ask! You can speak with one of our contract lawyers on 1300 544 755.
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