Logistics News

ESC invites feedback on Melbourne port tariff change

Wharfage fees move comes as Port Hedland looks to soak ships to pay for houses


Victoria’s Essential Services Commission (ESC) is currently reviewing the Port of Melbourne (POM) proposal to vary its prescribed service tariffs for wharfage from July 1. 

The ‘rebalancing application’ to vary POM’s wharfage service tariffs was submitted in December, with the ESC now seeking feedback on the port’s application until February 1 to inform its interim decision.

It will be followed by final decision following consultation with port users and other stakeholders on the port’s application.

The move involves rebalancing three prescribed service tariffs:

  • The current wharfage fee for full – inward containers will be discontinued and replaced with:
  • A wharfage tariff for full – inward containers that is $10/TEU higher than the current wharfage fee, which applies to vessels that exceed the port design vessel;
  • A wharfage tariff at the same rate as the current wharfage fee for full – inward containers (adjusted for CPI), which applies to vessels that do not exceed the port design vessel. This is effectively a continuation of the discontinued tariff for these port users because the inflation adjustment is the default tariff increase that would have applied in 2021-22 absent this tariff rebalancing application.

The wharfage fee for full outward containers will be decreased by an estimated A$3.77/TEU from the current export wharfage tariff.

The proposed tariff rebalancing relates only to wharfage fees for overseas full containers.

All other prescribed service tariffs will be adjusted by inflation in 2021-22 in accordance with the Tariff Adjustment Limit.

POM’s estimate for forecast inflation for 2021-22 tariff adjustments is 0.66 per cent, which will be updated when actual inflation is known after March 2021.

The Port of Melbourne argues that the tariff change for containerised trade will:

  • better align its tariff signals with marginal investment costs for larger vessels that some port users are increasingly driving; and
  • support improved port utilisation by port users who are not driving these marginal investment costs, through complementary tariff rebalancing measures to lower the price for containerised exports by reducing tariffs, and keep tariffs for smaller vessels constant (in real terms).

The move comes following POM’s stakeholder engagement over the last two years on its plans and approach for developing the capacity and efficiency of the port via the 2050 Port Development Strategy (PDS) and the Tariff Compliance Statement (TCS) consultations.

“In summary, larger vessels are a growing issue for the port and there is demand from port users to provide services to larger vessels,” the POM proposal states.

“Although larger vessels can create efficiencies in shipping costs, they drive additional costs for ports by reducing the effective number of berths utilised, require berth upgrades and channel deepening, etc.

“PoM has commenced and needs to undertake considerable near-term investment to accommodate this larger vessel trend.”

Read about the upshot of the ESC’s review of POM port leases, here 

If approved by the ESC, the rebalanced tariffs will apply from July 1 and be included in the 2021-22 tariff compliance statement.

Separately, shipowner body Shipping Australia Limited (SAL) has highlighted what it describes as a Pilbara Ports Authority (PPA) “cash-grab” on ships at the Port of Port Hedland from March 1.

SAL views what is known as the Port Hedland Voluntary Buy-Back Scheme, aimed at raising funds to shift home owners away from the port due to their exposure to iron ore dust,  as cynical and outrageous, not least because it negates the ‘polluter pays principle’.

SAL charges that shipowners gain nothing in return and there is no information on when the charge will end.

The cost on the way in and again on departure is A$1,250 for a 40,000 gross registered tonne (GRT) ship and rises to A$6,725 for ships over 80,000 GRT, with almost all ships affected attracting the higher rate.

It calculates that the charges will raise A$85.4 million a year.

Last June, the WA government announced the A$200 million industry-funded buyback for 400 properties near the port.


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