Archive, Industry News

DP World charge increase sparks new industry outrage

Another round of haulage access fee hikes in the offing as charges go unchecked

 

Australian port container haulage firms and related enterprises are likely to be hit by a new round of stevedore fee hikes from the new year if not earlier.

DP World Australia (DPWA) has announced a trio of fees they have to pay for access to container facilities will rise from January 1 and other stevedores have followed its lead in the past.

“The infrastructure access charge will be $63.80 per container (exclusive of GST) and will apply to all full containers received or delivered via road or rail at Port Botany Terminal. Full containers received or delivered via road will be charged to the road carrier through the 1-Stop Vehicle Booking System [VBS],” DPWA GM commercial for New South Wales and Queensland Ravi Sheshadri says in a letter to “customers”.

“Full containers received or delivered via rail will be charged to the rail operator as a separate item on rail invoices.

“In addition, we will adjust a number of container terminal ancillary charges that will apply at Port Botany Terminal from 1 January 2019. These include:

  • VBS Administration Fee – electronic
  • Stack Run In & Out Fee
  • Direct Return of Empty Booking Fee.

“We recognise the importance of working closely with operators as part of implementing new or increased charges which is why we are providing extended notice, of more than 90 days, to assist with this transition,” .

“Ongoing access to Port Botany Terminal will be conditional on payment of the charges as per our conditions.

“Infrastructure access and usage charges are vital for ongoing investment. In the past year, DP World Australia continued to invest heavily in critical infrastructure across the business.

“Equity in charging is also important. DP World Australia is continuing the journey to a rebalanced revenue recovery from waterside to landside, to ensure a sustainable future in an increasingly competitive market.

“A financially healthy stevedoring industry is vital for the long term economic well-being of Australia.”


Read about reaction to the Patrick access fee increase, here


The mention of an “increasingly competitive market” now and earlier has led to haulage interests accusing stevedores of using them as cash cows to fund increasingly uneconomic fees to attract container shipping line customers.

They note the fee increases come just as DPWA has just lost a chunk of business to Patrick and Victoria International Container Terminal (VICT), and are currently in a “bidding war” with Patrick particularly to win the latest Maersk Line contract. 

Major ports hit

Nationally, DPWA announced its infrastructure access charges would rise in major ports as follows:

  • Fisherman Islands terminal, up to $65.15 per container on all laden in and out
  • Port Botany terminal, up to $63.80 per laden container in and out
  • West Swanson terminal, up to $85.30 per laden container in and out.

“We understand that increases in charges and fees will attract some criticism, and we do appreciate that this will be positioned as an effective doubling of the Infrastructure Access Charge. However, a financially healthy stevedoring industry is vital for the long term economic well-being of Australia,” a DPWA spokesperson says.

“Providing transport operators with extended notice, of more than 90 days, of these changes will help with their planning.

“We will continue to work closely with the sector to explain the need to continue to rebalance revenue and to increase charges and fees to keep pace with the demands of our customers and the supply chain.

“These charges should not impact transport operators as they can be passed through the supply chain, without a negative impact.

“The increase in the Infrastructure Access Charge applied at West Swanson would, for example, add just one-tenth of a cent to the delivered cost of an iPhone.

“It would add just a quarter of a cent to the delivered cost of school shoes, 10 cents to the delivered cost of a microwave oven and 15 cents to the delivered cost of a flat screen TV.”

Industry fury

The backlash from haulage interests has been instant and furious.

State peak body Road Freight NSW (RFNSW) is again calling on the state and federal governments, Transport for NSW and the Australian Consumer and Competition Commission [ACCC] to intervene urgently to stop the ” the third unfair price hike in less than two years”.

“Enough is enough. It may be a different name, but the ‘access’ charge is just more of the same pain for our members,” RFNSW CEO Simon O’Hara says.

“Yet again, with little justification and certainly no consultation with industry, DPWA is planning for another blatant cash grab. It is simply unconscionable.

“We are extremely concerned that this unilateral price increase will have catastrophic effects on carriers running small businesses, who are working harder and longer, on weekends and public holidays.

“And it’s going to be felt right across the supply chain, with additional charges eventually being passed on to consumers, who’ll be paying more for their everyday goods.

“With no regulation, we believe it is time for NSW Minister for Roads, Maritime and Freight, Melinda Pavey, the Deputy Prime Minister and Federal Minister for Infrastructure, Transport and Regional Development, Michael McCormack, Transport for NSW and the ACCC to haul-in the stevedores.

“A first-step would be commissioning full-analysis of the true cost of these ever-increasing port charges on truck operators, their customers and the wider NSW community.”  

CTAA slams new rise

Container Transport Association Australia (CTAA) echoed the call for state and federal political intervention.

“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 1,024 per cent in Melbourne, 247 per cent in Sydney and 86 per cent in Brisbane, with no negotiation, no transparency, and no ability for transport operators to resist, least their terminal access may be denied.” CTAA director Neil Chambers says.

“In addition, Vehicle Booking System (VBS) fees will be jacked up 88 per cent 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.

Contract terms

CTAA says it has raised with the ACCC, and with federal and state governments, that DPWA imposes fee increases through unfair contract terms.

It notes that at the start of each financial year, DPWA 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,” it says.

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.” Chambers notes.

“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?”

Call to governments

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,” Chambers says.

“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 and 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.”

CTAA is calling for government regulatory reviews to address:

  • the relationship between stevedore rates to shipping lines, terminal handling charges (THCs) 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 (SLAs) between transport operators and stevedore companies; and
  • 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) and 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.”

The CTAA released the following timeline table of recent fee increases:

 

Date Implemented

Old Infra Fee (excl. GST)

New Infra Fee (excl. GST)

% increase

 

Melbourne:

14 April 2017

$3.60

$32.50

900%

1 January 2018

$32.50

$49.20

51%

1 January 2019

$49.20

$85.30

73%

Total                                                                                         1,024%

 

Sydney:

14 April 2017

Zero

$21.16

100%

1 January 2018

$21.16

$37.65

78%

1 January 2019

$37.65

$63.80

69%

Total                                                                                         247%          

 

Brisbane:

1 January 2018

$32.74

$38.75

18%

1 January 2019

$38.75

$65.15

68%

Total                                                                                         86%

 

 

Previous ArticleNext Article
  1. Australian Truck Radio Listen Live
Send this to a friend