Furious container haulage response to terminal imposts

By: Rob McKay

Calls for ACCC action against surcharges said to unfairly fall on trucking

Furious container haulage response to terminal imposts
The container haulage industry is up in arms


The Australian Competition and Consumer Commission (ACCC) is about to be hit with port-user calls for action on DP World Australia’s (DPWA’s) ‘infrastructure surcharges’.

Road Freight NSW (RFNSW) and a grouping of the Container Transport Association of Australia (CTAA), the Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) will approach the competition watchdog with their concerns, ATN has been told.

The moves loom as part of a furious reaction to DP World Australia’s (DPWA’s) ‘infrastructure surcharge’ on container transport to and from its Sydney and Melbourne terminals.

RFNSW described a new levy slugged on trucks entering the Port Botany terminal by stevedore DP World as a "cash grab" which should be examined by the ACCC.

From April 3, DP World will unilaterally impose the charge of $21.16 per container, received or delivered at the terminal, which RFNSW general manager Simon O’Hara says was announced without any consultation with industry or oversight by regulators.

"There’s been no discussion or input from carriers, just a one-page letter warning carriers that their ongoing access to the Sydney terminal is contingent on them paying up – it’s nothing more than a quick cash grab," O’Hara says.

"DP World has failed to justify why it’s imposing the extra levy on carriers, spinning it as an ‘infrastructure surcharge’.

"But we believe the charges will most likely be used to offset the costs of DP World’s new quay cranes and other automation of the terminal.

"What’s of real concern to RFNSW and our members is that this new charge won’t be subject to any oversight by regulators.

"This levy has been unilaterally forced upon carriers without any consultation which is why the ACCC needs to step-in and investigate."

Carriers will be charged through the 1-Stop Vehicle Booking System and RFNSW is calling on DP World to outline specific billing and payment procedures for carriers and how they compare with rail operators at the port.

"We are concerned that carriers, yet again, will be disadvantaged," O’Hara says.

"The extra costs will be passed across the supply chain and ultimately it will be carriers and their customers who will unfairly bear the brunt of it."

The anger was also palpable in Melbourne, where the surcharge is one-third higher than in Sydney and where trucking is already being hit by toll road hikes.

"The increase to the infrastructure surcharge announced by DP World Australia is yet another example of how transport operators are under massive pressure to maintain and protect margins that are already razor-thin," Victorian Transport Association (VTA) CEO Peter Anderson says.

"Coming off the back of the up to 125 per cent increase to tolls announced by CityLink operator Transurban, this increase will put additional pressure on operators to remain competitive.

"Operators will have no choice but to pass on the increase to their customers, and it is important that they take the necessary steps to ensure their 1-Stop Vehicle Booking System accounts contain the necessary reserves to accommodate the increase."

Ship charge question

The most trenchant responses came from national container-chain body CTAA.

DPWA has announced an increase of more than 900 per cent in its infrastructure surcharge levied on full containers received and delivered by road and rail to its Melbourne West Swanson Terminal, and the introduction of a charge of $21.16 per full container at its Port Botany Terminal in Sydney, the group states.

"What’s highly disturbing about this is that DP World obviously believes that it can act in such a monopolistic way by announcing these surcharges with little consultation with the landside logistics sector, and with less than a month’s notice," CTAA director Neil Chambers says.

"Phone calls to affected transport companies and others over the weekend prior and on the day of announcement doesn’t constitute consultation."

"These surcharges are rejected by the landside logistics sector, and CTAA companies want the issue taken up with the ACCC, and the Victorian and NSW governments."

In notices to industry, DPWA has claimed that it has "incurred material increases in the costs of occupancy … including the cost of council rates, land tax, rent and terminal infrastructure maintenance" as justification for passing on these costs to commercial parties who suffer from a weak bargaining and contractual position with the national stevedore.

"The major customers of DPWA are the shipping lines they service contractually," Chambers notes.

"In those contracts, shipping lines pay DPWA to load and discharge vessels, and deliver the containers to and from the landside interface.

"All businesses face operational and infrastructure cost increases.  

"Companies resolve to deal with these cost pressures through efficiency improvements and/or renegotiating prices with their customers. 

"DPWA should be negotiating cost increases with their direct customers, the shipping lines, not unilaterally deciding to foist these charges onto the landside sector."

DPWA also says the need to implement these surcharges because of investment "in critical infrastructure to keep pace with expected growth, and greater peaks and troughs in cargo arrival patterns". 

"Surely that is a cost to build into their rates charged to shipping lines to service larger ships adequately?" Chambers says. 

"DPWA holds the majority share of shipping line contracts in Melbourne and Sydney, and a significant contract was won in September last year to stevedore vessels in the A3 Consortium servicing trade routes to and from Asia.

"It has to be presumed then that DPWA didn’t factor its increased terminal operating costs into its prices that won this tender."

ATN is awaiting rail industry responses to the issue.

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