The new, simplified Approach
Following extensive industry engagement, the new approach has been specifically designed to remove price volatility, simplify invoices and reduce complexity.
The new supplier contributions approach uses actual supply volumes and a 12-month fixed price per material type to determine each supplier’s contribution, helping suppliers by delivering:
- a simpler approach to invoicing
- reduced complexity and administration for all participants (no monthly true ups)
- certainty over container pricing for a 12-month period
- improved cashflow management
- improved alignment with container deposit schemes in other jurisdictions
- no need for an upfront loan and associated servicing costs to manage the transition to the new system.
New fixed pricing
Table 1 New supplier contribution approach fixed pricing (Feb 20 – Jan 21) compared with current approach (all pricing is ex GST)
It is important to note that the method used to forecast pricing for the current supplier contribution approach is different to that used for the new approach, and in practice the current approach would experience some variance due to the true-up process. Therefore, the average pricing under the existing supplier contribution approach and the fixed price cannot be directly compared and should be used as a guide only.
|New approach||Forecast container prices if no change is made to supplier contribution approach|
|Material type||12-month fixed price||12-month average price||Minimum price||Maximum price|
What does this mean for you?
EFC will implement fixed pricing for each material type from the February 2020 invoice with the full transition to the new approach from the April 2020 invoice.