Industry backlash over Patrick surcharges increase

CTAA, RFNSW and FTA up in arms against infrastructure charges increase across four terminals

Industry backlash over Patrick surcharges increase
Patrick terminals in Sydney, Fremantle, Brisbane and Melbourne will be subject to new charges from March 12.


Industry representative bodies have criticised Patrick Stevedore’s decision to increase infrastructure surcharges from March 12.

The decision applies to full containers entering and exiting Patrick terminals in Sydney, Fremantle, Brisbane and Melbourne.

The new charges will be:

  • Sydney $41.10 per full container
  • Fremantle $7.50 per full container
  • Fisherman Islands $38.25 per full container
  • East Swanson Dock $47.50 per full container.

The stevedore says the decision is based on a review of its terminal infrastructure surcharges that recover a portion of the full costs associated with providing essential landside operations and services to its customers.

"We regret this change to our tariff but we have been left with no alternative in the current challenging economic environment, without sacrificing infrastructure investment and further performance improvements," Patrick chief commercial officer Ashley Dinning notes in a statement.

However, Container Transport Alliance Australia (CTAA), Freight & Trade Alliance (FTA), Road Freight NSW (RFNSW) have blamed the move on the lack of regulation in the market that allows stevedores to shift their cost recovery to landside stakeholders.

CTAA refers to a potential "rates war" between the two major stevedores – Patrick and DP World.

The latter raised its infrastructrure charges in two eastern states late last year – a move criticised by all three industry bodies.

"Governments told us the introduction of increased stevedoring competition would drop rates and that’s exactly what is happening," CTAA director Gerard Langes argues.

"What governments didn’t project was that the reduction in rates would feed the bottom line of foreign shipping lines at the expense of Australian importers and exporters.

"That’s exactly what’s happening, through the constant ramping up of these landside surcharges.

"It’s becoming increasingly clear that stevedores are restructuring their revenues away from the Shipping Lines towards the transport sector."

FTA director Paul Zalai says infrastructure charges increase seems to be an "easy way to attract a significant quantum of income without affecting their contracted shipping line customers".

"The Australian Peak Shippers Association (APSA) and Freight & Trade Alliance (FTA) have led the case to the Australian Competition and Consumer Commission (ACCC) requesting a formal investigation of the DP World and Patrick charging regime," Zalai says.

"We will now supply further evidence of our concerns and remain hopeful that our engagement next week with the ACCC chairman, Rod Sims, will give us clarity on a way forward to protect our sector from a spate of uncontrolled surcharges and unregulated price increases."

RFNSW says no proper regulation, accountability or transparency is allowing

Patrick to get away with its massive, ongoing port tax increases for truck operators.

"It’s open season on truckies," RFNSW GM Simon O’Hara says.

"Patrick’s infrastructure surcharge has gone from zero to $25.45 to $41.10 in less than a year.

"That’s a massive increase with little justification. No wonder our members are so angry.

"With no regulatory oversight, accountability or transparency, the stevedore can keep cynically shifting costs on to carriers whenever they like.

"And it’s laughable that yet again, they blame increased operating costs at Port Botany for the price hike. It’s all spin and no substance.

"Last year, when it first imposed the $25.45 tax on truckies, Patrick blamed the new levy on increased operating costs at the port, notably rent. But that was quickly proven to be a blatant mistruth when NSW Ports set the record straight by stating that ‘in actual terms, Patrick’s total rent per square metre of occupied land area has dropped slightly between FY2017 and FY2013 (pre-privatisation)’.

"Rents haven’t increased, they’ve fallen, but even though they were caught out, Patrick still continues to spin the same old line today."

RFNSW has raised its concerns with the state government, the Opposition, the ACCC and the Small Business Commissioner.

Meanwhile, CTAA has written to governments expressing this concern and calling on them to investigate the relationship between: 

  1. stevedore and terminal rates to shipping lines
  2. terminal handling charges (THCs) applied by shipping lines to shippers
  3. the implementation and quantum of the infrastructure surcharges levied by the stevedores on transport operators, which are consequently passed onto shippers.

All shipping lines charge shippers (importers and exporters) a Terminal Handling Charge (THC), either identified separately or embedded in an overall port fees charge, which covers the cost of handling containers at the container terminal, including the stack and landside movements, CTAA states.

"It would be reasonable to expect that any cost reduction to the shipping line for stevedoring and terminal services should be reflected in a corresponding reduction in the THC to shippers. Alas, this is not the case," Langes says.

"The situation now exists where overseas owned and controlled Shipping Lines are profiting from this cost shifting, at the expense of Australia’s import & export competitiveness."

"Foreign-owned shipping lines are financially benefiting from lower stevedoring rates charged by the stevedores, while maintaining high THCs."

"Effectively, shippers are now paying twice for the same service."

"Even the ACCC has commented that shipping lines may now be receiving subsidised stevedoring services as a result of the Infrastructure Surcharges, noting that 'it is possible that the revenues being collected from the transport operators are simply replacing revenues that used to be collected from shipping lines'.

"CTAA believes this new and troubling trend should worry Governments as it particularly threatens the competitiveness of Australia’s containerised exports."

CTAA recommends shippers take the commercial fight to the shipping lines and seek reductions in THCs to account for the cost shifting that is occurring.

"For the container transport operators, it means more cash flow worries as they pay the Infrastructure Surcharges to the stevedores well ahead of being able to commercially recoup the costs from their customers."


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