Hutchison to be hit with wharf strike

Workers employed by Hutchison Ports in Sydney and Brisbane have voted to commence broad-ranging industrial action, accusing the company of launching the most severe attack on waterfront conditions in a generation, the Maritime Union of Australia said.
The protected action ballot of Hutchison Ports workers from Port Botany and the Port of Brisbane, conducted by the Australian Electoral Commission, recorded 98.4 per cent support among union members for a series of rolling work stoppages, along with a range of other actions. The first round of industrial action, involving bans and limitations, will commence on Thursday 17 January.
Negotiations over a new workplace agreement covering Hutchison Ports workers in Sydney and Brisbane reached a stalemate, the MUA said, after the company “refused to back away from plans to slash wages and conditions, along with automating some roles and outsourcing other jobs”.
The Maritime Union of Australia said the company’s demands include: a 2.5 per cent cut to superannuation; reductions to sick and parental leave; cuts to redundancy and long service leave; removal of income protection; wage cuts of up to $10 per hour followed by a wage freeze; and reductions to safety standards, including the loss of full-time first aiders and removal of personal protective equipment.
MUA assistant national secretary Warren Smith said the attempt by this multi-national port operator “to slash the pay and conditions of Australian workers left them with no choice but to take industrial action.
“The world’s largest stevedore, the same company that sacked 97 workers by text message in 2015, is now telling its Australian workforce that it wants to slash their wages and conditions,” Mr Smith said.
“If Hutchison gets its way, waterfront workers would be left 26 per cent worse off in retirement based on the company’s planned cuts to their superannuation entitlements, while redundancy payments would be halved for the average worker, as would long service leave.
“Not content to attack wages and conditions, Hutchison Ports are going after the safety of their workers, with a push to remove the full-time first-aiders who provide potentially life-saving treatment in an emergency, along with taking away basic personal protective equipment.
“On top of that, they want to cut wages by up to $10 per hour, impose a 12 month wage freeze, with pay rises of just 1 per cent a year after that.
“Our members refuse to sit back and watch as four-decades of hard-won conditions are stripped away by a greedy multi-national whose only concern is maximising its own profits.
“We will not accept an agreement that rips us off and reduces our standard of living, and the MUA is committed to using every industrial and legal tool at our disposal in our fight to protect conditions and safety standards on the waterfront.
“The actions Hutchison Ports highlight exactly why the Australian union movement has launched the Change the Rules campaign, to challenge the actions of big corporations who are increasingly using the broken workplace laws to attack the conditions of working people.”

DP World charges on

DP World Australia (DPWA) has proceeded with its higher landside infrastructure charges from 1 January 2019 despite significant opposition from the landside container logistics sector.
Also, DPWA’s Vehicle Booking System (VBS) fees have been jacked up over 80% from $6.89 per container slot to $12.95 per slot. An unprecedented increase, with no corresponding significant improvement in the functionality of the 1-Stop VBS platform.
“It’s worth repeating that since April 2017, DP World Australia has imposed Infrastructure Charge increases levied on container transport operators of over 1000% in Melbourne, 247% in Sydney and 86% in Brisbane, with no negotiation, no transparency, and no ability for transport operators to resist, least their terminal access may be denied,” said CTAA director Neil Chambers.
In late October last year before the Victorian State Election, CTAA, in collaboration with Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA), welcomed the Victorian Labor Government’s commitment to conduct a review into regulating pricing and charges, as well as access to and from the Port of Melbourne, following the announced increases in stevedore infrastructure charges.
“We have urged the incoming Victorian Minister for Ports, Melissa Horne, and Freight Victoria (within Transport for Victoria), to proceed with this review as a matter of urgency.”
Discussions also continue with the NSW Minister for Roads, Maritime and Freight, Melinda Pavey, and with Transport for NSW, about similar investigations.
These actions align with statements made by the Australian Competition and Consumer Commission (ACCC) in its 2018 Container Stevedoring Monitoring Report, that the recent significant increases in infrastructure charges may require a more detailed examination by state governments, and, if warranted, a regulatory response.
CTAA is urging stevedore infrastructure charge restraint during investigations.
“Prior to these government investigations proceeding, CTAA urges the other Australian container stevedore companies to show restraint at this time and not impose similar infrastructure charge hikes as those imposed by DPWA,” said Mr Chambers.
“For instance, the cycle for Patrick Terminals to consider and announce its level of infrastructure charges across its Australian container terminals has been in March each year.”
“We’d urge Patrick Terminals, and also Hutchison Ports Australia and Victoria International Container Terminal (VICT), and most recently Australian Amalgamated Terminals (AAT) in the Port of Brisbane that introduced a new Infrastructure Charge of $38,70 per full container in October 2018, not to act unilaterally in this way, but to collaborate with the promised review(s).”
The full picture on container terminal charges
CTAA has been consistent and clear that the investigations into these unregulated charges should consider the broader picture of the port fees and infrastructure charges levied for landside stevedoring services, which are ultimately borne by Australia’s importers and exporters.
It is understood that there is a cost in providing adequate landside container stevedoring infrastructure. Indeed, the ACCC 2018 Container Stevedoring Monitoring Report confirms that stevedoring revenues have declined as foreign international container shipping lines have enjoyed much more competitive stevedoring rates as a result of stevedoring services competition.
Yet, stevedores need to continue to invest to provide adequate service levels, and to address their own rising costs in a market dictated by declining quayside revenues.
However, anecdotally, Australia’s importers and exporters have not enjoyed corresponding reductions in terminal handling charges (THC), which have traditionally recovered the costs of Australian container stevedoring services levied directly by the international shipping lines.
“A core question then for the impending government investigations is whether or not importers and exporters are actually paying twice for the same stevedoring services?”
“Ultimately, they are now paying exorbitantly higher stevedoring infrastructure charges passed through the chain by road and rail transport operators, yet they haven’t received a corresponding reduction in THC levied directly by foreign shipping lines.”
“You really have to ask who’s creaming this situation? Who are the winners and the losers?”
“You don’t have to be Einstein to have a guess. The broader spectrum of charges levied for what purpose is very worthy of government investigation and possible regulation,” Mr Chambers concluded.
There has been no correspondence received from DP World on the subject.

War brewing on the waterfront

The stevedore: DP World Australia welcomes ACCC report
DP World Australia has welcomed the ACCC’s Container stevedoring monitoring report 2017-18, focusing on the report’s confirmation that industry profits continued to decline.
“We are pleased to see that the report confirms contextual factors that led to our decision to increase Infrastructure Access Charges at our three east coast terminals, effective from 1 January 2019,” the company said in a statement. “These include: an increase in port capacity; the increased market power of shipping lines; increases in property-related costs; a substantial investment in infrastructure, and; a sharp fall in profitability for all stevedores.
“We note the ACCC finds that there may be some justification for the use of charges, that it’s not unreasonable for stevedores to seek to recover some costs from the landside, and that it has no view on the appropriateness of the current charges.
However, the company said shippers, transporters are crying foul.
“We don’t agree with concerns about the potential impacts of Infrastructure Access Charges throughout the supply chain. Evidence from previous years shows that the increases can be, and are, passed through the supply chain. This is, in fact, what happened in 2017. Evidence from previous years shows that the increases led to very small increases to the prices of delivered goods. The increase in the Infrastructure Access Charge to be applied at West Swanson from 1 January 2019 would, for example, add just one-tenth of a cent to the delivered cost of an iPhone. Such increases can be passed through without dampening demand, as is evidenced by growth numbers following previous increases in charges.”
As for government regulation: bring it on!
“We note the ACCC’s remarks that the recent rises in Infrastructure Access Charges may warrant review by state policy makers. We are prepared to make our case – for a more equitable pricing structure for all users, for ongoing investment and for our sustainable future – in any forum.”
And besides, you need us.
“A financially healthy stevedoring industry is vital for the long term economic well-being of Australia.”
Farmers don’t agree
Farmers believe urgent action is needed on port infrastructure charges.
The Victorian Farmers Federation (VFF) Grains Group is calling on the State Government to address skyrocketing port infrastructure charges at the Port of Melbourne.
According to the ACCC’s Container Stevedoring Monitoring Report released this week, DP World stevedoring rates have risen 2372% since the first port infrastructure charge of $3.45 per container was introduced in late 2016.
“It was promised by the government during the sale of the port in 2016 that adequate protections against unreasonable fee increases would be in place,” said VFF Grains Group president Ross Johns.
“While the VFF welcomes the recent announcement from Minister Donnellan that an investigation into port access fees will be brought forward, it is vital that this investigation ensures those promised protections are set in place.”
The charges, which apply to truck or rail operators dropping off or collecting containers, have brought in $100 million for stevedores in 2017-18 alone.
“All these extra costs flow straight back down the supply chain to the farm gate. Victorian farmers are already battling to maintain access to valuable export markets in the face of the high production costs and competition from cheaper supply chains in other exporting countries,” said Mr Johns.
“DP World’s recent comments that the charges can simply be ‘passed through the supply chain, without negative impact’ demonstrate that they have no understanding of what the increases mean for Victorian farmers who cannot pass the costs on. In the case of containerised wheat exports, these increases are typically borne by one farmer who will deliver the entire 25mt to fill the container.
“These increases only make Victorian exports less competitive, eroding potential earnings from the Victorian economy, as buyers of Australian grain look to cover their demand from countries with cheaper supply chains.”
Now that Victoria is in caretaker mode, the VFF has called on all parties to support the commitment to undertake an investigation, and to ensure adequate measures are in place to protect the Victorian agriculture industry from these excessive port infrastructure charges.
The union: TWU calls for government intervention
The Transport Workers’ Union is calling on federal and state governments to regulate stevedores as a report by the ACCC has expressed concern over the impact of fee hikes on supply chains.
The fee hikes are causing financial problems for transport operators at the ports, which will have an impact on safety, said TWU National Secretary Michael Kaine.
“Drivers and transport operators have been voicing concerns since these fee hikes began. Now the ACCC has backed their concerns and spoken about the impact they are having. Governments need to step in and regulate this industry or risk safety at the ports,” Mr Kaine said.
The road safety watchdog torn down in April 2016 was investigating safety in transport at the ports and was due to release findings. Evidence was being presented to show how a financial squeeze from the top was resulting in transport operators and drivers under pressure to cut safety corners.
“We had in place a watchdog that was beginning the process of regulating the top of the supply chain at the ports to ensure safety is the number one priority. The watchdog was hearing from port drivers who were giving evidence about delays, lack of training, badly maintained vehicles and poor rates which do not reflect the time or cost required to carrying out work.  The Federal Government tore down this body and now we have the unfettered greed of stevedores unleased on the transport industry. This is exactly what happens when regulatory gaps are left to fester. The ACCC report shows stevedores are still highly profitable, making $60 million profit with revenues up 6.8% to $1.3 billion. This industry must end its squeeze on transport,” Mr Kaine added.
“We welcome the Victorian government’s review into pricing and charges at the ports. We urge the review to be carried out with the utmost urgency and for other state governments to follow suit,” he said.
The ACCC report refers to the lack of choice for transport operators at the ports. “Transport operators have no ability to choose a stevedore that has lower infrastructure charges.” It adds: “There is an incentive for stevedores to increase infrastructure charges.”
Transport owners: we agree but not your way
The National Road Transport Association (NatRoad) also wants action on portside land charges, but has rejected the TWU’s suggestion.
The organisation has responded to the Transport Workers Union’s comment on the ongoing problem of unregulated landside port charges, calling it a “puzzling ‘solution’”.
NatRoad CEO Warren Clark said that the recent ACCC report had thrown light on the lack of state government-based regulation of landside port charges.
“The way in which these charges have been applied to landside contracts is a misuse of market power given the inability of downstream service providers in landside logistics having any capacity to effectively negotiate solutions to these price increases.
“But suggesting that the rightfully defunct Road Safety Remuneration Tribunal could have assisted to solve this problem is plainly wrong.
“NatRoad supports private enterprise. We believe that commercial outcomes should be promoted by establishing competitive market frameworks in preference to regulation. However, where there is a need for regulatory oversight of prices, the introduction of price monitoring should be considered as a first step.
“Price regulation is appropriate where public assets like ports are utilised by private operators, including in respect of landside services, and State governments should act to stop the increases that appear out of control.  For example, the ACCC has noted that the increase in charges has been most notable in Melbourne, where DP World’s charge will have increased from $3.45 per container in April 2017 to $85.30 from 1 January 2019.
“NatRoad has a deep commitment to improving road safety.  But raising the RSRT as some sort of magic pudding whenever there is a supply chain pricing issue just doesn’t hold up to logic.  Economic arguments about prices in any part of the transport chain should be looked at from the point of view of market-based solutions first and then Government intervention where market power has been abused.
“NatRoad will be renewing our call to the NSW Government to get involved in the issue of landside port charges. We want these charges to be included as part of its price monitoring regime, requiring all New South Wales port lessees and sub-lessees like stevedoring companies to provide a rationale for how a relevant price increase is calculated and why it is needed. If, as appears to be the present case, it is for the operator to invest in further capital assets rather than as a direct result of legitimate price increases then government should step in.
“We will be making similar arguments to other state governments and to the Commonwealth Government, but we will not be talking about resurrecting a price-setting tribunal that did not and should not have a legitimate role in the transport industry,” Mr Clark concluded.

Newcastle container terminal supported by Nats

The NSW Nationals leader’s public support for a container terminal at the Port of Newcastle, as reported by the Sydney Morning Herald on October 23, is welcome news.
Under current arrangements, two container ships a week visiting the Port of Newcastle until 2063 would cost the NSW Government more than $6 billion.
The government is contractually committed until 2063 to paying the lessee of Port Botany and Port Kembla, NSW Ports, for containers shipped through the Port of Newcastle. Payment starts when more than three container ships a year visit Newcastle, assuming an average of 10,000 import/export containers a visit. Payment is based on the average price charged by NSW Ports for a container shipped through Port Botany, currently $150.
The government secretly decided to require the developer of a container terminal at the Port of Newcastle to pay the government for any cost the government incurred to a future Port Botany/Port Kembla lessee, due to container shipments handled by the developer. The government concealed its decision when parliament debated the bill authorising the ports to be leased. The “Ports Assets (Authorised Transactions) Act 2012”, which was assented to on 26 November 2012, did not authorise the government to pay the Port Botany/Port Kembla lessee from consolidated revenue.
Should the ACCC find that the decision to charge a Port of Newcastle container terminal developer is likely to be illegal under the “Commonwealth Competition and Consumer Act 2010” (Competition Act), the government will need to pass special legislation to pay NSW Ports. More likely, the government will assert that the leasing arrangements are legal and will defend its position, in the event that the ACCC sought a court determination. The legal process could take years.
The previous Labor Government started negotiating with the preferred developer of a container terminal at the Port of Newcastle, Newcastle Stevedores Consortium (Consortium), in 2010. Labor contractually required a container terminal with capacity of at least one million containers a year – the equivalent of two ships a week.
Port Botany and Port Kembla were leased to NSW Ports on May 30 2013. The government contractually required the consortium to pay the government for any cost the government incurred to NSW Ports, for container shipments handled by the consortium.
The ACCC claims that the government decided from at least July 27 2012 not to develop a container terminal at the Port of Newcastle. The ACCC based its claim on the government’s policy announcement that Port Kembla would be the location of the state’s next container terminal. The ACCC claims that the Competition Act stopped applying to the government in respect of a container terminal at the Port of Newcastle, due to the policy announced on July 27 2012.
The government announced on 28 October 2013 that no decision had been made to lease the Port of Newcastle. The government said “the scoping study for the proposed port transaction remains on track, with the NSW Government expecting to make a decision by the end of the year”. But on 5 November 2013, the government announced its decision to lease the port. Around that time, the government ceased negotiating with the consortium, without concluding a development agreement. The ACCC took no enforcement action under the Competition Act because the negotiation “did not result in any contract, arrangement or understanding”. The ACCC informed the Commonwealth Treasurer that “there does not appear to have been a contract, arrangement or understanding in place during the relevant period which had the purpose, effect or likely effect of substantially lessening competition”.
The ACCC refuses to acknowledge that the government contractually required the consortium to pay the government, for any cost the government incurred to NSW Ports, due to container shipments handled by the consortium. However, it was impossible for the government to conclude a contract that breached the Competition Act. If the government’s contract with the consortium breached the Competition Act, the same contract with the Port of Newcastle lessee breaches the Competition Act.

Melbourne’s VICT declared dangerous by the ITF

The Victorian International Container Terminal (VICT) at Melbourne’s Webb Dock has been declared a Port of Convenience (PoC) by the International Transport Workers’ Federation (ITF) at its 44th Congress in Singapore.
ITF president Paddy Crumlin said unions believe a fatal accident could be imminent at VICT, with a number of serious safety-related incidents reported by the workforce recently.
“It is a big step to declare a Port of Convenience but VICT continues to ignore the entirely justified concerns of its workforce over their safety and shift arrangements,” said Mr Crumlin, who is also the national secretary of the Maritime Union of Australia.
The ITF-affiliated MUA has been campaigning against the Philippine-based multinational port operator ICTSI over the significant undercutting of rates, conditions and industry standards on the Australian waterfront, the shifting of automated port jobs to the Philippines, and poor safety standards at the VICT terminal.
VICT is also currently facing legal action over the unlawful sacking of a union delegate and paying wages that undercut the legal minimum wages under the industry award.
“All maritime affiliates are now considering what lawful action may be required to give effect to the PoC campaign,” added Mr Crumlin.
The ITF has uncovered serious exploitation across ICTSI’s global terminals with the company fast becoming one of the most controversial in the maritime industry.
“Globally, ICTSI’s workers are underpaid and overworked, harassed and coerced, and union members often face intimidation in retaliation for raising workplace issues,” Mr Crumlin said.
“ICTSI has tried to bring its anti-worker business model, that they have run out all over the world, to Australia and we won’t tolerate it.”
MUA deputy national secretary Will Tracey said two workers at the VICT terminal were recently hospitalised, and the entire workforce is now fearing more serious accidents following the recent introduction of dramatically increased working hours.
“This workplace is unsafe and threatens the standards that union activists over generations have built up. The transferring of automated jobs offshore is something the MUA will fight with all our resources and all the resources of the Australian trade union movement,” Mr Tracey said.
“Hopefully, this step can ramp up pressure on the company to intervene immediately before a worker is killed or seriously injured,” Mr Tracey added.

Port fee increases transfer cost from lines to truckers

Landside transport operators across Australia are appalled by the latest announcement by DP World Australia of further massive increases in vehicle booking fees and Infrastructure Access Charges from 1 January 2019.
“If these exorbitant fee increases are allowed to proceed, then since April 2017, DP World Australia will have imposed Infrastructure Charge increases levied on transport operators of 1024% in Melbourne, 247% in Sydney and 86% in Brisbane, with no negotiation, no transparency, and no ability for transport operators to resist, least their terminal access may be denied,” said CTAA director Neil Chambers.

In addition, Vehicle Booking System (VBS) fees will be jacked up 88% from $6.89 per container slot to $12.95, again with no consultation or discussion with transport operators about what the additional revenue will be used for to improve the truck interface at DP World terminals around Australia.
Unfair contract terms
The CTAA has raised with the ACCC previously, and with the federal and state governments, that DP World imposes these fee increases through unfair contract terms.
At the beginning of each financial year, DP World requires container road transport operators to accept the terms of its National Carrier Access Agreement. If they do not sign, transport operators may be denied terminal access, and in any event, as soon as they use the 1-Stop VBS from 1 July each year, they are deemed to have accepted the terms of the agreement.
The DP World Public Tariff Schedules for each terminal, linked to the Access Agreement, are also published for the financial year.
“The National Carrier Access Agreement forms a ‘contract’ between DP World and transport operators, albeit transport operators have little ability to negotiate fair terms within the contract,” observed Mr Chambers.
“Yet, half-way through the contract, DP World can vary its fees and charges massively, again with no negotiation.
“CTAA has asked the ACCC previously why this isn’t deemed to be ‘unfair contract terms’ under the provisions of Australia’s competition laws? Following this latest fee increase bombshell, we’ll be asking the question again.
“Transport operators have no say in setting these fees and charges, no say in their quantum, and no say in how the revenue is spent. How is this fair or sustainable?”
Federal & state government actions
The current Federal Minister for Infrastructure, Transport & Regional Development, Michael McCormack has stated publicly that he will wait for the next ACCC Container Stevedoring Monitoring Report due in October before considering action on stevedore fees and charges now being directed to the landside sector.
“We’ll be encouraging the Minister to act swiftly once the Monitoring Report is released.”
Similarly, both the Victorian and NSW governments have recently released updated strategic freight plans with clear directions to support the efficiency and viability of the container logistics freight sector.
In the case of the Victorian Freight Plan, there is a specific initiative to investigate options for the future role of government in regulating pricing/charges, and access to and from the Port of Melbourne.
“CTAA is encouraging Victorian Minister Luke Donnellan, NSW Minister Melinda Pavey, and indeed the Palaszczuk Queensland Government and the McGowan WA Government, to conduct these investigations as a matter of urgency, jointly or severally.”
The CTAA believes these government regulatory reviews need to address:

  • The relationship between stevedore rates to shipping lines, terminal handling charges (THC) applied by shipping lines to shippers, and the implementation and quantum of the infrastructure surcharges levied by the stevedores on transport operators.
  • An investigation of the ‘unfair’ structure of DP World’s National Carrier Access Agreement, and the benefits that would be derived by negotiated, individual service level agreements (SLA) between transport operators and stevedore companies.
  • The establishment of independent monitoring of key stevedore performance indicators, similar to the analyses conducted in NSW under its Mandatory Standards regime by the NSW Cargo Movement Coordination Centre, including accurate Truck Turnaround Time (TTT) & Container Turn Time (CTT) measurement in all ports; VBS slot capacities per time zone; truck utilisation rates, stevedore practices that limit ‘two-way running’ opportunities; and stevedore infrastructure expenditure that improves landside logistics interface performance.


There’s more to the Port of Newcastle than just containers

Building an extensive container port at Newcastle would have many roll-on benefits for Sydney, writes Greg Cameron.
A container terminal at Newcastle would justify building a rail freight bypass of Sydney between Newcastle, Badgery’s Creek and Port Kembla. This bypass would be paid for by replacing Port Botany’s container trucks with Newcastle’s container trains.
It would enable trains to replace trucks for transporting the bulk of Sydney’s regional and interstate freight.
Port Botany relies on trucks for transporting containers. There were one million container trucks that moved through Port Botany in 2014. By 2040, there will be six million.
An intermodal terminal is being built at Moorebank. This terminal requires all of Sydney’s available rail freight capacity. If Moorebank reaches capacity, there will still be 4.9 million container truck movements through Port Botany by 2040.
With the Moorebank intermodal terminal operating at capacity, the economic disbenefits of trucking containers will increase five-fold – from one million per year to five million per year – by 2040.
A rail freight bypass of Sydney will justify building the Maldon-Dombarton rail freight line to enable building a container terminal at Port Kembla to operate interchangeably with the Port of Newcastle.
The South Coast of NSW will be served by container ports at both Port Kembla and Port of Newcastle.
By building the section of the bypass line between Glenfield and Eastern Creek as the top priority, containers can be railed between Port Botany and a new intermodal terminal in outer western Sydney. The remainder of the line to Newcastle will take about 10 years to build. But there would be no intermodal terminal built at Moorebank.
Upon line completion, containers railed between Newcastle and intermodal terminals in outer western Sydney would be de-consolidated at the intermodal terminals and the goods transported to their end destinations in Sydney.
Export goods manufactured in Sydney would be consolidated into containers at the intermodal terminals and the containers then railed to Newcastle for export.
Empty containers would be railed from Sydney to all regional areas of NSW to be filled with export goods and the containers then railed to Newcastle for export.
All container trucks would be removed from Sydney’s roads.
Freight currently entering Greater Sydney by road can be railed.
There would be no need to build stages 2 and 3 of the $5 billion Northern Sydney Freight Corridor to provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield.
There would be no need to build the $1 billion Western Sydney Freight Line, between Chullora and Eastern Creek, to enable containers to be railed between Port Botany and outer western Sydney.
There would be no need to spend $400 million on upgrading the Port Botany rail freight line.
Freight would be removed from the Wollongong-Sydney rail line.
All of Sydney’s current rail freight capacity would be used for passenger services to provide a higher economic return than freight.
The Southern Sydney Freight Line could be used for express passenger services from southwestern Sydney growth areas, including Badgery’s Creek Airport.
All of the current rail capacity between Newcastle and Sydney would be used for passengers.
A second rail bridge would be built over the Hawkesbury River as part of the rail freight bypass.
The short parallel runway at Sydney airport could be extended from 2,600 metres to 4,000 metres by terminating container operations at Port Botany.
A rail freight bypass would enable Sydney firms to relocate to regional areas.
It is appropriate and necessary for the state to examine the implications to NSW of removing the state’s anti-competitive fee for containers shipped through the Port of Newcastle.

Malaysian port invests in Aussie straddlers

Mobicon Straddle Carriers recently delivered four Mobicon top frame straddle carriers to be used at Northport’s Container Terminal in Port Klang, Malaysia.
The four Mobicon Top Lift machines are currently in operation at the container terminal to handle 20′ & 40′ containers, and have a lift height of 3.6 meters, turning radius of 12.3 meters and a cycle time of 2 minutes.
Managing director of Brisbane-based Mobicon Straddle Carriers Tom Schults said: “With a tight turning circle, low wheel loads and very economical running costs, the Mobicon top frame machine doesn’t come with the big price tags of reach stackers, three-high straddle carriers and container forklift trucks. However, it still allows the operation to stack containers two-high and manoeuvre easily in tight spaces.
“Mobicon is known for making quality container handlers that offer the lowest point loads of any straddle carrier in the world. Mobicon’s top frame machine won’t damage the concrete or bitumen of an average industrial yard.”
Mr Schults continued: “In the past we saw a tendency by large logistics operations to a one-size-fits-all approach when it came to their container handling machinery. However, as the economic squeeze has tightened, we have now started to notice an emerging trend where the more successful companies are starting to look at every aspect of their operation individually, and decide on the most efficient machinery to suit each part.
“Fully understanding what a machine will cost your operation in the long term should be one of the most important factors to consider before making a purchase.
“When we designed the Mobicon top frame we looked at all of our options to assess what would make the Mobicon the best value for our customers. Taking a chance on a design and hoping that it works just because it is a little less expensive in our experience, never pays off.
“By assessing container handling machines as a complete package over a lifetime, not just its purchase price, you can save hundreds of thousands in unexpected repair costs, labour bills and lost income due to unexpected downtime.” Mr Schults said.

Newcastle may become a container port after all

There could be 2 million containers passing through the port of Newcastle each year.

Following years of sitting in the ACCC’s too-hard basket, industry sources say there has now been enough confirmation of wrong-doing by successive NSW Governments for the ACCC to take action.
The Newcastle Herald quotes an ACCC spokesperson saying: “We have considered these issues over time, however, there are some recent developments that have renewed our interest.”
The news of course comes as great relief and justification for their decades of perseverance for the small group of battle-weary former BHP Steelworks executives and the current management of the Port of Newcastle, who have been told many times to give up any hope of ever seeing the port as anything more than a coaldust gatherer.
Former BHP executive and the driving force behind the container port movement Greg Cameron explains the details:
There is movement on Newcastle at last
The ACCC’s decision to at last investigate arrangements that “may limit or prevent the development of a container terminal at the Port of Newcastle”, is welcome news.
The ACCC chooses its words carefully. It says of “relevance” to its concerns is section 45 of the “Commonwealth Competition and Consumer Act 2010” (Competition Act), that “prohibits contracts, arrangements or understandings which have the purpose or effect of substantially lessening competition”.
A container terminal is a near certainty, if the NSW government removes the fee it charges. This fee is paid to the lessee of Port Botany and Port Kembla (NSW Ports) as compensation for loss of container shipping business to Newcastle.
A world-class container terminal built on the former Newcastle steelworks site would be able to move two million TEU containers a year. At this volume, the NSW government will be required to pay NSW Ports $8 billion between 2023 and 2063. NSW Ports paid $5.1 billion for a 99-year lease in 2013.
The government was authorised by the “Ports Assets (Authorised Transactions) Act 2012” to lease Port Botany, Port Kembla and Port of Newcastle. But this Act did not authorise the government to pay the lessee of Botany/Kembla for containers shipped through Newcastle.
Paying NSW Ports anything defeats the purpose of leasing Botany/Kembla, which was to release capital value. However, by artificially inflating the lease value of Botany/Kembla – by promising payment of compensation – the government got a false valuation.
Competition from Newcastle would have made the lease value of Botany/Kembla less than the retention value, whereby these ports would not have been leased in the first place.
The government concealed its decision to pay the lessee when the “Ports Assets (Authorised Transactions) Bill 2012” was being considered by Parliament. The government also concealed its source of funds to pay the lessee. The government decided in 2012 that a private company, Newcastle Stevedores Consortium (Consortium), would be the source of those funds.
A negotiation by the government to lease Newcastle’s container terminal site to the Consortium, for development of a container terminal, commenced in 2010. A key lease condition was that the Consortium should build and operate a container terminal with minimum capacity for one million TEU containers a year.
Since a lease contract with a condition requiring the Consortium to pay a fee for containers was likely to breach the Competition Act, the government terminated the negotiation, in November 2013.
In November 2013, the government decided to lease the Port of Newcastle to give it a source of funds to pay NSW Ports outside the operation of the Competition Act. Government policy, as confirmed by the Hon Gladys Berejiklian MP on 29 September 2015, is that the port lessee (Port of Newcastle Investments) “could develop a container terminal if it wished to do so”.
A Newcastle container terminal will generate base load cargo to pay for a rail freight bypass of Sydney – from Newcastle to Port Kembla via outer western Sydney.
A sensible solution is for an orderly transfer of container terminal operations from Port Botany to Newcastle and Port Kembla. NSW Ports, which is 80 per cent owned by industry super funds, can have its investment protected if it participates in the rail freight bypass.
There is enough money to be made in railing containers from Newcastle, rather than trucking containers from Port Botany, to protect the interests of all investors, by taking a common-sense approach in the interests of fund members and the NSW community.
Greg Cameron
Why stop there?
If of course container movement was discontinued at Port Botany, to the great relief of local residents and road users, the land and airspace at Port Botany could be used for an additional runway at Sydney Airport. This would negate the need for a new airport at Badgery’s Creek – especially if a fast train were to commence operations between Brisbane, Sydney and Melbourne, which routes account for over 30% of Sydney Airport’s traffic.
The freight rail line duplication could also be avoided, saving several more billions. There would be an immediate ease of the traffic chaos along the M5 and M7, which currently see trucks carrying the hundreds of thousands of containers between Port Botany and the new industrial mega-developments around Eastern Creek each year. It could actually be faster to rail a container from Newcastle to Eastern Creek and surrounds than to move it from Port Botany.
Mr Cameron said Port Botany container truck movements are currently more than 1 million a year. “Deloitte Access Economics estimates they will increase to 4.9 million a year by 2040. However, if the Moorebank Intermodal Terminal does not proceed, Port Botany container truck movements will be 6 million a year.
“WestConnex is essential if container truck movements are to increase five fold because the current capacity of the M5 East is exceeded, even without container trucks. A rail freight bypass would make the Moorebank intermodal redundant because all containers would be railed using the bypass line. Sydney’s existing rail freight capacity is more profitably used for more passenger services.”
Let’s see what happens with the Port of Newcastle first.
Charles Pauka – Editor

MSC container ship banned from Australia

The Australian Maritime Safety Authority (AMSA) has banned the Liberian-flagged container ship MSC Kia Ora from Australian ports for three months after the operator failed to ensure crew were paid their wages in full and on time, and that critical equipment was maintained.
AMSA inspected the ship in the Port of Brisbane on Wednesday, 14 March 2018 after receiving a complaint alleging that crew had been underpaid.
During the inspection AMSA found evidence that crew had been underpaid for the previous four months (November 2017 to February 2018), and were owed more than AU$53,000. The outstanding wages had been transferred to the crew just 24 hours before the inspection.
“Failure to pay crew their wages in full and on time is a clear and unacceptable breach of the Maritime Labour Convention,” AMSA’s general manager of operations Allan Schwartz said.
Further breaches of the Maritime Labour Convention were also found during the inspection relating to hours of rest and fitness for duty, Mr Schwartz said, placing the safety of the crew and the ship at risk.
The inspection also revealed that two of the ship’s four generators were defective as well as the starboard main engine fire damper. In total, 24 deficiencies were issued to the MSC Kia Ora. The ship was detained the same evening.
AMSA reinspected the MSC Kia Ora today, 25 March 2018 and was satisfied that all detainable deficiencies had been rectified. The ship was released from detention and immediately issued with a ban, preventing it from accessing Australian ports for a period of three months.
MSC Kia Ora is operated by Vega-Reederei, the same company that operated the Vega Auriga, which AMSA banned in 2014.
“Sub-standard and poorly managed ships that place the welfare of their crews at risk will not be tolerated in Australian waters,” Mr Schwartz said.
AMSA has banned five ships in the past two years.

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