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.

Port of Newcastle signs on for MEGATRANS2018

The Port of Newcastle – the largest port on Australia’s east coast – will exhibit at multimodal supply chain trade show MEGATRANS2018.
MEGATRANS2018 aims to bring together leaders and stakeholders in the wider Australian and international supply chain, including those in the transport, logistics, warehousing solutions, materials handling and infrastructure sectors.
The Port is a leading coal export port and handles more than 25 different cargoes and 2,258 ship visits per annum. With connectivity to national road and rail networks, the Port of Newcastle has a significant role to play in the wider Australian logistics and supply chain, making it a welcome fit for MEGATRANS2018.
The show takes place 10-12 May at the Melbourne Convention and Exhibition Centre.

Four new container cranes en route to DPWA from China

Australian stevedore DP World Australia (DPWA) will take delivery of four new ZPMC quayside container cranes next month, for its Brisbane, Sydney and Melbourne terminals.
The cranes departed China on 11 February, loaded on the Zhen Hua 21 vessel.
DPWA’s Brisbane and Sydney terminals are both set to receive one crane each, and two cranes will be delivered to the Melbourne Terminal.
According to DPWA, the cranes, which were built in Shanghai, have the latest in electrical technology, efficient operating systems and improved ergonomics for operator comfort.
The delivery is the first part of an order for a total of nine cranes for DPWA, an additional five cranes are to be delivered to DPWA’s Sydney, Melbourne and Fremantle terminals in mid-2018.

Port of Melbourne industrial action "sovereign risk": VTA

The Port of Melbourne risks becoming an “international laughing stock” if industrial action that has disrupted stevedore Victoria International Container Terminal (VICT) is permitted to continue, according to the Victorian Transport Association (VTA).
The VTA’s warning is in response to VICT’s revelation that the person the Maritime Union of Australia (MUA) is pressuring the stevedore to employ is ineligible to work on docks under Australian law because he failed to obtain a Maritime Security Identification Card.
“It is an affront to every Port of Melbourne stevedore and freight operator working in and around the port that the Victorian economy is continuing to be held to ransom by the MUA over what we now understand is a legal reason for this individual being ineligible for employment at the docks,” said VTA CEO, Peter Anderson.
“The effects of this ongoing action at our busiest time of the year are being felt right throughout the economy when you consider that the more than 1000 containers and their contents sitting idle at Webb Dock cannot be brought to market and sold to consumers during our peak retail trading period.
“Not only are VICT and the hundreds of freight operators that cannot move containers in and out of the terminal being impacted by this recalcitrant industrial action, so too are hundreds of small business operators and their families that are being denied access to goods demanded by Victorian consumers.”
Anderson said it was a potential sovereign risk to the broader Victorian economy and the Port of Melbourne’s position as the nation’s largest port if the action is allowed to continue.
“VICT is already losing business to other Port of Melbourne stevedores through this action, but if foreign exporters determine Melbourne is an unreliable destination for freight forwarders they will send their business to ports in other states, at a massive cost to our economy,” said Anderson.
“So, while this action may be confined to VICT for now, the real risk as we see it is the long-term reputational and economic damage the action will create for Victoria as a place to do business.”
Anderson implored all stakeholders involved in the action to put the interests of the Victorian economy first and work constructively to bring an end to industrial action that is undermining the state’s hard-fought reputation as a reliable place to do business.
“This is not the time for our leaders to run and hide but rather confront the real issue of adverse union action that is brutal and selfish, and has a negative effect on the livelihoods all Victorians,” he said.

Road carriers should pass on stevedore fee hikes: VTA

The Victorian Transport Association (VTA) has issued advice to its members on dealing with the fee hikes introduced in recent months by Australia’s major stevedores.
“These increased charges have been introduced with the carrier not being able to negotiate and there is obliged to pass them on directly to the customer,” VTA CEO Peter Anderson said in the message.
The VTA recommended informing customers how the additional charge will be invoiced and forwarding any formal correspondence from stevedores to further explain the fee.
“Given that both direct and indirect terminal access costs are increasing and significantly different across the three terminals, it is important that the carrier industry is able to accurately quantify and incorporate these costs into their charges,” Anderson added.
Predicting further fee hikes in the future, Anderson announced that the VTA will establish a terminal access cost model for wharf-based operations– for release in early 2018, and will make recommendations to assist the container industry in better communicating with customers “in an effort to recompense many cost increases out of the carriers’ control.”

Port of Melbourne potentially limited by containership growth

A report produced by the Australian Competition and Consumer Commission (ACCC) on the country’s stevedores has suggested that Port Botany has overtaken the Port of Melbourne for container trade due to constraints at the Victorian port, as first reported by The Age.
In 2016/17, Port Botany handled 34 per cent of Australia’s container movements, with 33 per cent going through the Port of Melbourne – down from 36 per cent in 2015/16.
While the report did not directly link the Port of Melbourne’s reduced volume to the increasing size of container ships, it noted that it is the most likely port to put limits on the size of ships visiting the country.
The Age noted that the biggest ship to visit Australia, the 347-metre Susan Maersk that docked at the Port of Brisbane in October, would have been unable to travel up the mouth of the Yarra River to Swanson Dock, and its 10,000 TEU (twenty-foot equivalent unit) load may or may not have managed to fit underneath the West Gate Bridge.
In a recent newsletter, industry body Shipping Australia wrote that with only one terminal able to take the larger ships – Webb Dock, with Swanson Dock out of reach – “Melbourne is already the limiting factor for the size of ships coming to Australia’s east coast ports and is preventing Australians benefiting from the efficiencies of larger ship operations.”
“The risk is that shipping lines may consider by-passing Melbourne for Adelaide or Sydney and use rail, or a smaller ship feeder service (possibly from New Zealand) to make the connection,” it added.
“This would ultimately cost the Victorian consumer, the Port of Melbourne and the state economy.”

Taskforce established for Kwinana port development

The taskforce that will complete the planning for Western Australia’s McGowan Government’s long-term Outer Harbour freight vision has now been established.
The multi-agency Westport Taskforce will outline a long-range vision to guide the planning, development and growth of both the Inner Harbour at Fremantle and the future Outer Harbour at Kwinana.
The Westport Taskforce will deliver the Westport: Ports and Environs Strategy, for which a team of experts from government agencies responsible for planning, transport, environment, jobs and finances will develop answers to key policy questions surrounding the location, size, operating model and timing for a future port.
Meanwhile, planning for the associated road and rail links to support the new port facilities will also form part of the overarching strategy.
Nicole Lockwood is to be appointed as the independent chairperson of the Westport Taskforce. She is a former director of KPMG, current board member of Infrastructure Australia and chairperson of the Freight Logistics Council of Western Australia.
Lockwood was also recently appointed to the expert panel to lead the Inquiry into National Freight and Supply Chain Priorities.
The Taskforce Steering Committee will also comprise director generals of six government departments, with the chairpersons of the Planning Commission and Fremantle Ports.
They will be supported by multi-disciplinary project personnel and supplemented as required by external technical expertise.
The taskforce’s governance arrangements will also incorporate stakeholders including government agencies, port users, local governments, community groups and transport industry unions.
The State Government is committed to retaining the inner harbour as a working port and the taskforce will be expected to ensure that the Outer Harbour is planned in a way that achieves an optimal balance between both facilities.
“This milestone step to establish the Westport Taskforce will lay the foundations for delivering the Outer Harbour,” said Transport, Planning and Lands Minister, Rita Saffioti.
“The Westport Taskforce will focus on providing the necessary infrastructure to support the long-term economic development of the state, maximising future jobs, minimising costs and truck movements, and maximising opportunities for innovation.
“Our pre-election commitment was to give renewed priority to planning for the Outer Harbour and the associated road and rail links as part of a long-term integrated transport plan for the state.
“We’ve allocated an initial $6 million in last week’s Budget so that significant further planning work can start, building on existing technical planning.
“The Outer Harbour has been supported by successive State governments and it is vital we get on with this after the previous government put planning on hold to push for its flawed Perth Freight Link project.”


Platinum Freight launches first regional office, in NSW

Customs clearance broker Platinum Freight Management will launch its first regional office this month, in Wyong, New South Wales.
Peter McRae, CEO, Platinum Freight Management, sees the area as an attractive and fast-growing home base for importers and exporters who need large warehousing facilities, citing its proximity to major international ports in Sydney and Newcastle.
“Importers and exporters in the Wyong, Gosford and surrounds have enormous comparative freight and logistics costs due to their distance from international ports, so reducing extraneous costs should be a high priority,” said McRae. “Yet until now there has been an undersupply of internationally experienced customs brokers in the local area who can partner with them to offer premium advice in person.”
“We are looking to make strong partnerships with local importers and exporters on the coast and help make a difference to their businesses,” McRae added.
“We have designed our business to deliver a positive customer experience to all clients, commensurate with our motto: Simply no higher level of service,” said McRae. “Being local is an important part of this promise.”

APSA, FTA challenge booking cancellation fee increases

On 30 August 2017, Maersk published an industry notice announcing an increase in Booking Cancellation Fees from $100 to $250 per 20′/40′ dry container.
The Australian Peak Shippers Association (APSA) and Freight & Trade Alliance (FTA) have since received reports that other shipping lines are preparing to announce similar increases, APSA Secretariat Travis Brookes-Garrett reported in a statement.
APSA subsequently engaged senior executives at Maersk Line Australia on 31 August 2017 to challenge the increase, finding that it has been introduced due to an increase in container ‘no shows’. Maersk will reportedly provide data shortly to validate the claim.
“APSA maintains the position that two-way accountability should exist,” said Brookes-Garrett. “If shippers and forwarders are faced with punitive cancellation fees, then they should also be compensated by the shipping lines when bookings or containers are rolled.
“In a competitive marketplace, APSA and FTA encourage other shipping lines to consider the realities of Australia’s agri-export economy before the introduction of punitive fees. If accountability exists then it should exist for both the shipper and the shipping line.”
While the increased booking cancellation fees are in effect, Maersk has confirmed that consideration may be given where there are genuine extenuating circumstances.

Peak transport bodies join forces to fight port taxes

WARTA executive officer Cam Dumesny (left) with RFNSW general manager Simon O”Hara.
Road Freight NSW (RFNSW) has joined forces with its interstate counterpart the Western Australian Road Transport Association (WARTA) in a renewed fight against what they believe are unjustified landside surcharges imposed by stevedores at ports across the country.
RFNSW general manager Simon O’Hara met with WARTA Executive Officer Cam Dumesny, observing freight movements and out of the Port Botany terminals and getting feedback from carriers about the impact the new levies were having on their day to day operations.
“In NSW and WA, truck operators, particularly those smaller, family-run businesses, are hurting,” Mr O’Hara said.
“RFNSW and WARTA have now decided to use our collective strength in bringing the stevedores to account, for the sake of our members.
“Again, we make the point that at ports across the country, stevedores have imposed these taxes on hardworking truck operators without any regulatory scrutiny.
“We are concerned about the dangerous domino effect this has had on industry. Since stevedores started imposing these charges, other operators with significant supply chain power have also begun slugging transport operators.
“RFNSW and WARTA believe we need an independent body, ultimately the ACCC, to be called-in to put the brakes on the stevedores and start regulating landside port charges.
“We believe the recent Federal Court finding, which allows the ACCC to monitor and regulate pricing at the Port of Newcastle, means the ACCC should be in a position to review the situation at Australia’s ports,” he said.
“Accordingly, RFNSW and WARTA will make a joint submission to the ACCC, again calling for an investigation and independent umpire to review any financial charges.”

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