DP World adds Fremantle to access charge mix

By: Rob McKay


Stevedore details rising costs but CTAA reiterates that this is a customer issue

DP World adds Fremantle to access charge mix
Fremantle, which faces a DP World infrastructure surcharge

 

Western Australia’s port of Fremantle will soon have a DP World Australia (DPWA) terminal access charge of its own.

After a delay, DPWA will now charge landside operators, including rail firms, an ‘infrastructure surcharge’ of $8.22 a container excluding GST, from October 30.

This will be charged to landside operators through the 1-Stop vehicle booking system and as a separate invoice item for rail firms.

"Property costs at Fremantle Terminal have risen considerably in the last five years," DP World Fremantle general manager operations Luke Westlake explains in a notice.

"DPWA has incurred material increases in the costs of occupancy of more than 25 per cent, covering the cost of council rates, land tax and rent.

"Additionally, Terminal Infrastructure maintenance continues to add a high cost to the business.

"DPWA avoided passing these costs onto the supply chain over this period, attempting to offset them through efficiency improvements.

"Despite DPWA’s continued efforts, these material step changes in costs cannot be offset."

Westlake adds that the investment also includes increases in costs of terminal upkeep driven by the use of the site by landside operators.

Another of the reasons for the surcharge is increased rent arising out of a recent rent review, the stevedore explains.

"DP World Australia’s annual rents in Fremantle will increase by 22 per cent from $2.3m to $2.9m between 2015 and 2018," a spokesperson tells ATN.

"The last increase was finalised in February 2017, with rent being backdated to 2016.

"We finalised our lease extension in May 2017, which delayed the implementation of the Fremantle surcharge.

A range of other costs have increased above the level of CPI and are not being recovered through current charges, including increases in council rates, land tax, water and maintenance.

"These costs increased by $3.5m in 2017. This reflects the need for maintenance of quay cranes; RTGs [rubber tyred gantry cranes]; IT; pavements; forklifts and reachstackers and other equipment; and leasehold costs. 

"The charges also reflect the need to fund investment in new RTGs, and potentially larger equipment that can deal with larger vessels and support an increase in stevedoring productivity."

The move spurred a sharp response from a Container Transport Alliance Australia (CTAA) that is critical of the stevedores but also of governments and regulators.

CTAA sees the move as "yet another example of stevedore monopolistic behaviour, and again highlights the lack of an adequate response from Australia’s competition watchdog and Australia’s federal and state governments".

"Having seemingly got away with it on the east coast by imposing new and significant increased Infrastructure Surcharges in Melbourne, Sydney and Brisbane earlier this year, DP World has again got its hand in the pockets of container transporters and their import & export clients, this time on the west coast." CTAA director Neil Chambers says in a statement.

"These Infrastructure Surcharges are almost double those imposed by Patrick Terminals in Fremantle in July (i.e. $4.76 per full container) and are being imposed on a unilateral basis with no consultation with those expected to pay."

"Mid this year, the ACCC chairman, Rod Sims, offered a view publicly seemingly linking the east coast fee hikes with the negative aspects of port privatisation. What then is the ACCC chairman’s view about it happening (again) in a publicly owned major capital city port?

"As observed by our freight forwarder and shipper representative colleagues, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA), it’s now clear that we’ve descended into a commercial container logistics chain pricing model where the end-payer doesn’t get to decide or have any influence over the outcome.

"Just pay up otherwise your ongoing access to the terminal will be threatened.

"The position of CTAA Alliance companies remains the same (again) – the stevedores should either absorb increased operating costs, improve their productivity or negotiate their collection through their commercial clients, the shipping lines.

"As we said when Patrick Terminals made its Fremantle Infrastructure Surcharges public in June, it is very disturbing that the stevedores can simply offset their rising costs by unilaterally implementing levies on parties in the supply chain who have no strong contractual relationship with the stevedores, with no consultation and at short notice."

Chambers questions how is the money to be collected by DP World is to be spent in Fremantle.

"DP World is consistently the worst performing container terminal in Fremantle in terms of truck turnaround times.

"How is this ‘keep(ing) pace with industry expectations’? You’d hope that DP World’s landside performance in Fremantle will improve if the landside infrastructure is being improved, but we aren’t holding our breath."

 

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