The power dynamic between parties in the supply chain is always an important factor and the ‘all care and no responsibility’ attitude of the stevedores in the main ports in Australia illustrates this point very well. Now the situation has come to the attention of the Australian Competition and Consumer Commission in the latest Container Stevedoring Monitoring Report.
The key illustration of this unfair commercial arrangement is the infamous ‘Infrastructure Charge’ which has been causing a great deal of grief for transport operators hauling in and out of the major ports around Australia. The way the power dynamics seems to work is that the large stevedoring companies can charge what they like and the transport operations have to pay the charge, or not do the work.
From the outset this was, yet again, transport operators being bullied by the big boys. The trucking industry and its associations have campaigned long and hard against this ridiculous charge, but to no avail. Over the years, the level of charging has jumped up using excuses which stretch credibility to the max.
The charges have now reached such a high-level that even the ACCC cannot ignore it. As a result of the report which the ACCC released earlier this week, all of the stakeholders have jumped on the wording of the report and are pointing the finger at the big stevedores. The Transport Workers Union talk about the unfair financial pressure is being put on transport operators, which it believes inevitably compromises safety for its members.
At the same time the trucking industry associations point to the fact that these unfair infrastructure charges have been levied with the excuse that it will pay for improvements in productivity. Despite the amount of money coming into the stevedores directly from the transport companies, in many cases, productivity has got worse, as stevedores cut costs.
The numbers revealed in the ACCC Report do not make good reading for that truck transport companies, but demonstrate just how much of a rort we have going on in our ports.
“Revenue from land side and other sources increased by 12.9 per cent to $78.1 per container due mainly to increases in infrastructure charges,” says the ACCC. “These revenues now make up 29 per cent of the total.
“The industry generated $167 million in revenue from infrastructure charges in 2018-19, an increase of 63 per cent from 2017-18. After DP World’s decision to increase charges in Melbourne from around $49 to $85 from 1 January 2019, Patrick and VICT followed with increases of their own. Patrick now has the highest charges in Sydney ($77.50) and Brisbane ($71.50) following increases in March 2019. Infrastructure charges generated 12.2 per cent of the stevedores’ revenues.”
The ACCC goes on to demonstrate exactly what is going on with the infrastructure charges. The stevedores charged the transport companies this amount of money just because they can. The stevedores don’t charge the shipping companies what they should do for their services, just because they can’t.
“It is understandable for stevedores to seek to recover some costs from land side transport operators given that these operators benefit from the investment that the stevedores undertake in their facilities,” says the ACCC. “However, the use of infrastructure charges means that stevedores are earning a growing proportion of their revenues from customers that are limited in being able to respond to those charges, in contrast to the competitive market in which stevedores provide services to shipping lines. The outcome of this may be that importers and exporters will pay higher charges to ship their goods than otherwise.”