DP World defends infrastructure surcharge


Landside transport operators must share in infrastructure improvement costs

DP World defends infrastructure surcharge
DP World says the charges fall on those who gain from improvements

 

DP World Australia (DPWA) is sticking to its guns as criticism from those who will pay its surcharge swirls.

With road haulage groups accusing it of gouging them for its own ends and calling for Australian Competition and Consumer Commission (ACCC) scrutiny, the stevedore  insists infrastructure improvement costs must be shared with those who also benefit from them.

"This has nothing to do with raising revenue and it is all about the rise in maintenance costs from increasingly complex infrastructure," a DPW spokesperson explains to ATN.

"This will help underwrite a significant investment in critical infrastructure investment across Sydney and Melbourne over the next 10 years, to ensure we can meet the ever rising service expectation from our customers with the inevitable larger vessels and the changes in arrival patterns that will bring.

"The average charge of $26 perunit per full import / export container is a necessary cost recovery for DPWA – $21.16 per unit, Sydney and $32.50 per unit, Melbourne – as we believe we have gone as far as we can to absorb costs and improve the productivity and efficiency of landside rail productivity and road efficiency ahead of the structural changes taking place in shipping patterns.

"As the ACCC has acknowledged in its monitoring reports, unit revenues for Stevedores have been falling over recent years to record lows. In some respects, the current expenditure is part of a cyclical rebalancing of expenditure, particularly to ensure equipment can handle larger vessels – which is a key driver of future productivity."

DPWA insists the key drivers for the charges are:

  • a material increase in occupancy as the industry adapts to an unprecedented amount of change including the introduction of competition, privatisation and the consolidation of the shipping industry more than 30 per cent in Sydney and more than 60 per cent in Melbourne
  • increasing maintenance
  • providing for critical infrastructure investment across Sydney and Melbourne in the next 10 years to service larger vessels and consequent changes in arrival patterns (more peaks and troughs).

"We’re expecting our fixed costs to double in the next three years across both Sydney and Melbourne terminals, considering increases in rates, taxes and property costs and rent," the spokesperson says.

"This also reflects the need for maintenance of RTGs, ASCs, IT, pavements, forklifts/reach stackers and other equipment, in addition to investment in new assets.

"Had we not reached agreement with the Port of Melbourne on a fair cost for rent in Melbourne, the industry would have been forced to pass on an infrastructure levy last year to the tune of $120 per unit, escalating to $250 by 2018."

It is noted that the existing levy at Melbourne of $3.45 is to become $32.50.

In the face of accusations that shipping line customers are escaping the pain, DPWA underlies that the charges fall on those who have the most to gain.    

"Landside operators have benefited from expansion, efficiency and infrastructure improvements in Sydney and Melbourne, through investment which has until now been absorbed by DPWA," the spokesperson says.

"DPWA has gone as far as it can go in making efficiency gains without further cost recovery. The charge is unavoidable.

"Road and rail carriers will be the primary beneficiaries of future investment in terminal infrastructure and expansion of terminal capacity, particularly the road and rail interface in Sydney and Melbourne.

"For this reason, the levy will be recovered from the users of the landside infrastructure i.e. importers/exporters and their carriers."

The stevedore adds that the surcharge is consistent with the principles of the infrastructure levy that is already in place in Brisbane and Melbourne – in Brisbane at $32.74 per unit and Melbourne at $3.45 per unit.

"It’s worth reminding everyone that this arrangement has been in place in Brisbane for six years — and that all trucking companies and lobby groups have cooperated with this arrangement for those past six years," the spokesperson says of industry talk about involving the ACCC. 

You can also follow our updates by joining our LinkedIn group or liking us on Facebook