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.

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.

 

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