Victorian ports minister and VTA find timing particularly egregious
Victorian ports minister Melissa Horne has reacted with irritation to stevedore DP World Australia’s (DPWA) decision to make adjustments and hikes to container access charges and penalties in the midst of the coronavirus Covid-19 crisis.
This is Horne’s second intervention on the subject since the release of its contentious Deloitte draft report on port charges and the third by a state ports minister, with New South Wales’ David Constance and Western Australia’s Alannah MacTiernan having vented frustration at actions surrounding container access charging.
“This decision is unacceptable – especially at a time when everyone should be pulling together to keep freight moving,” Horne says.
“We’re working hard to boost landside efficiency at the Port of Melbourne to get goods on and off ships quicker to help drive down costs – but stevedores also need to play their part in driving efficiencies to bring down prices.
“We’re continuing to work closely with industry to deliver a more cost-effective and efficient port supply chain.”
Read how DP World’s latest access move was initially greeted, here
The comments follow similar ones from the Victorian Transport Association (VTA), which described DPWA’s increase to ancillary charges at its Port of Melbourne terminals and around Australia as “insensitive” and coming at a time when the transport industry was already facing economic headwinds because of the coronavirus.
In a strongly worded communication to members, VTA CEO Peter Anderson said the charges fall under non-prescribed services within the port supply chain and therefore have no regulation attached to their application.
“Now is not the time for rate increases,” Anderson says.
“It is disappointing that at a time when the transport industry is working together as never before to overcome the catastrophe Covid-19 has unleased on Australians and the economy, DP World has opted to increase its ancillary charge on wharf carriers servicing its terminals at ports around Australia.”
Anderson said the 40 per cent increase in charges for ‘no-shows’ by DPWA shows a “flagrant disregard and insensitivity to the environment every supply chain participant is facing.
“There are many businesses that are not only trying to survive with reduced revenues but are having to readjust their whole business model to try and keep their staff, at least on part pay, and to ensure that they can remain sustainable until the crisis has finished.”
Anderson calls on DP World to give wharf carriers more time to prepare for the increase, which is set to take effect from May 1.
“Four weeks is not enough time to prepare customers for passing on the increase, which is what wharf carriers must do for their businesses to remain sustainable,” he says.
“Wharf carriers are already doing it tough and don’t have the capacity to absorb another raid on their cash flow, which is effectively what this latest increase will create.
“It would at least show some balance if DP World Australia was to extend trading terms to 60 days and remove the late arrival fee for at least six months.”
The DPWA moves come as container volumes from China, begin a steady climb after being all but stopped in their tracks by that country’s Covid-19 lockdown.
But port observers are concerned volumes from Europe are slowing to a trickle.
Critics of stevedore access charges continue to call for either a new container logistics system agreed by all parties in the containerchain or regulation to combat what is seen as the worst impacts of access charging and misuse of systems aimed at instilling discipline around container use and return.
The Victorian government argues that the review advised that there is currently no compelling case for regulation of stevedore’s charges – though it fails so far, despite ATN’s request, to release the full draught report or divulge where the recommendation comes from and how it was arrived at.
However, Horne acknowledges difficulties in the system, having told the VTA conference earlier this month that the “current model is not working particularly well”, and the government says it is finalising a new Voluntary Port Performance Model for the Port of Melbourne.
This includes implementing voluntary pricing transparency arrangements for stevedore access charges which would include requesting that stevedores commit to providing greater clarity and certainty on the timing, notice period and rationale for changes in access prices.