Patrick rail hike defence fails to sway critics

Patrick hits back after being criticised over rail price rise, but transport industry isn't buying it

Patrick rail hike defence fails to sway critics
Patrick rail hike defence fails to sway critics
By Rob McKay | August 10, 2010

Patrick Stevedores bit back at Sydney Ports Corporation (SPC) after being accused of double-dipping on rail loadings and a lack of consultation on proposed rail window charges.

The SPC says the increases will force containers on to roads, thereby increasing road congestion around the ports - a point the NSW Australian Trucking Association highlighted today.

The Patrick response also raised the ire of P&O Trans Australia (POTA), which operates both road and rail services to and from Port Botany.

Patrick says that after starting consultation with Australian Rail Track Corporation, Railcorp, rail operators, SPC and the Australian Competition and Consumer Commission (ACCC) in May, it advised it would increase rail-handling charges "to cover its costs and introduce reciprocal rail performance rules for operators and Patrick".

The stevedore claims charges will improve efficiency and productivity at the terminal, saying rail has become so inefficient that 92 percent of trains do not arrive on time due to factors outside of Patrick’s control.

The inefficiency is immensely costly notwithstanding that Patrick maintains a rail team 24/7 to man its rail operation whether trains arrive on time, late or not at all.

While labour and other rail costs have continued to rise, Patrick had only a nominal $5 per lift increase in its rail service charge to rail operators in the past nine years.

"With no improvement in rail mode share or rail efficiency expected in the foreseeable future, and Patrick costs continuing to rise, it is unreasonable for anyone to expect Patrick to provide services without recovering its costs, no commercial entity including Sydney Ports would accept this situation. Patrick has no choice but to increase charges," Divisional General Manager Paul Garaty says.

"Sydney Ports’ assertion that shipping lines currently pay for rail handling is incorrect. Shipping line charges are based on providing national stevedoring services and do not include rail handling charges at Port Botany.

"It is disappointing to see that Sydney Ports has once again sought the threat of stevedore regulation to solve the problem of rail underperformance and the failure to move towards their stated 40 percent rail mode share target."

Patrick says the 2008 Independent Pricing and Regulatory Tribunal (IPART) states that the current rail charge is not reflective of the costs of providing a rail windows and associated services also identified the inadequacy of current charges.

The stevedore says the quantum of the rail window booking fee was originally determined on an ad hoc basis and has not been adjusted to reflect changed circumstances.

"Freight mode is the decision of the freight owner or forwarder and is often prejudiced against rail as it requires an additional lift which is not required by road," Patrick says.

But its position earned a rebuke from POTA, which says that, as a monopoly provider, Patrick’s behaviour could earn it attention from the ACCC.

"To blame rail for their problems is a nonsense," a spokesman says, adding that Patrick itself had said in its IPART submission that it would be more efficient to load containers directly on rail cars.

"If they choose to put [a rail container] into a general stack before putting it into a rail stack for their own operational reasons, that is one thing. But there is absolutely no reason why it shouldn’t go direct into the rail stack and vice versa for export containers.

"We would prefer it was put into the rail stack because [otherwise] it slows everything down."

He also took issue on the designation of the fee.

"The window fee was never a lift fee. It was bought in as a window fee to cover the cost of administering and managing the rail-window interfaces with ARTC, the Botany yard etc, etc."

He claims the $5 charge more than covered the window cost and that this remained so today.

ATA NSW also stood up for the rail operators, with ATA NSW manager Jill Lewis saying her members wanted an efficient rail service from the port rather than see the roads grind to a halt due to congestion.

"Nobody wants that," Lewis says.

Container Group Chairman Mike Moylan adds: "We want to see rail compete equitably; we don’t want to see anything that will dramatically reduce their volumes."

The Customs Brokers and Forwarders Council of Australia also took a dim view of proceedings.

"From a CBFCA perspective, the commencement of a third operator at Port Botany cannot come soon enough in anticipation that genuine competition will keep stevedore charges at reasonable levels and increase operational efficiency without the need for ongoing government intervention," Freight and Business Operations Manager Paul Zalai says.

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