FTA notes surcharges spiral out of control despite wharfies returning to work
Crippling shipping line fees and disruption continue, especially in New South Wales, despite the Maritime Union of Australia (MUA) returning to full operations at all Port Botany container stevedoring operations.
While Freight & Trade Alliance/Australian Peak Shippers Association (FTA/APSA) observes major international shipping lines are maintaining a ‘Port Botany Congestion Surcharge’ of around US$285-350 (A$400-490) per twenty foot equivalent unit (TEU), Road Freight NSW (RFNSW) and the Australian Trucking Association (ATA) has brought a clear picture of the landside transport impact to federal transport minister and deputy prime minister (DPM) Michael McCormack’s attention.
The trucking delegation including RFNSW chairman Leigh Smart, CEO Simon O’Hara and ATA transport and infrastructure adviser Sam Marks.
O’Hara reports the following issues were impressed upon McCormack:
- Continuing problems with congestion as a result of poor systems and the ongoing backlog effect of industrial action
- The surplus of 30,000-plus empty containers in NSW is growing
- Port Botany and Sydney empty container parks (ECPs) have no space left. ECPs are at times up to 150 per cent capacity and struggling
- As shipping lines avoid Port Botany, containers are being railed and driven in from Brisbane and Melbourne. This adds complexity and extra costs for the supply chain in NSW.
Shipping lines aren’t bringing in sweeper vessels (ships meant to come in and pick up empty container vessels) to deal with the large surplus of empty container vessels
“Potential industrial action might be in play for the later part of the year if negotiations with Patrick’s aren’t concluded in a timely fashion,” O’Hara says.
“On this point, I made it clear both parties need to make efforts to resolve this issue in a timely fashion and playing ‘ducks and drakes’ in this environment was in no one’s interests as we continue through Covid.”
He continues: “The increase of costs at the port for no discernible productivity remains an issue for operators. Volumes are down and the NSW and national supply chain will be feeling the effect with the immediate issues not resolved for at least three months. We do not wish to see problems for Christmas as our operators are coming into peak season.”
O’Hara states that McCormack has undertaken on the industry’s behalf to raise these issues at the Transport and Infrastructure Council (TIC).
“Our answer to all of these issues has been to regulate the port including the empty container parks for the purposes of driving productivity for consumers, the economy and our operators.
Meanwhile, despite resumption of full operations and statements this week from all three stevedore executives suggesting successful finalisation of enterprise agreements could be achieved in coming weeks, containership representative body Shipping Australia Ltd (SAL) sees ocean shipping and the landside container supply chain into and out of Sydney as both remaining extremely disrupted.
In response, FTA/APSA raises the possibility of shipping lines potentially ‘double-dipping’ by gaining penalty revenue from both their supplier (stevedore), and customer (exporter, importer or freight forwarder).
FTA /APSA says it has sought detail from SAL on how many ships are affected, with the assumption that many shipping lines would have adjusted their scheduling over the last few weeks as reflected by the high number of blank sailings, vessels by-passing Sydney and those no longer taking bookings to Sydney.
“The lack of transparency poses many questions and frustrations, turning the spotlight away from the core industrial relations dispute to one of opportunistic shipping line practices that appear to be primarily focussed on recovering costs to extend record profits reported during the pandemic and global economic downturn,” FTA and APSA secretariat director Paul Zalai states.
While acknowledging that the industrial relation matters clearly need immediate and permanent resolution, FTA/APSA says it continues to competition law reform and increased regulation to address unfair charging regimes including the explosion of shipping line surcharges, stevedore-imposed Infrastructure Surcharges4 and empty container park transport booking fees.
“State and federal governments need to support Australian commerce to take advantage of the opportunities created by free trade agreements and economies recovering from Covid-19 restrictions,” Zalai says.
These opportunities cannot be fully realised while the costs of trade are prohibitive.”