ACCC powerless to act on container terminal access charges

By: Rob McKay


Little succour for container haulage or trade services firm in eagerly awaited report

ACCC powerless to act on container terminal access charges
The report’s cover

 

The Australian Competition and Consumer Commission (ACCC) is unable to discern any contravention of rules that it might act on in the face of fast-rising infrastructure access surcharges from container stevedores.

The national competition regulator instead puts the onus on state governments to act on the issue.

"The ACCC does not have the power to determine stevedores’ charges. In 2017, the ACCC considered that the infrastructure charges did not represent a breach of the Competition and Consumer Act 2010," the ACCC says in its Container stevedoring monitoring report 2017-18.

"The use of the charges did not appear to substantially lessen competition in a market, nor did it meet the high threshold to potentially be considered unconscionable conduct.

"Nor do the use of infrastructure charges in and of themselves raise concerns under provisions of the Australian Consumer Law, although some contractual terms relating to the stevedores’ interaction with land transport operators are currently under assessment."


 Read Rod Sims’ position on port privatisation concerns, here


The ACCC does, however, make observations on their impact and has advice to governments on that.

"While we consider that there may be some justification in the response by stevedores to falling quayside revenue and increasing costs, the likely adverse impact of infrastructure charges on supply chain costs for importers and exporters is worthy of close consideration by policy makers," the report states.

"The potential for infrastructure charges to rise both in absolute terms and as a proportion of total revenue is significant and of concern as cargo owners may end up effectively paying a high amount for stevedoring services if infrastructure charges were to rise in an unconstrained way."

While stevedores tend to do business on a national level, the ACCC notes that the power to act generally resides state ports ministers.

"Some states already have legislative powers in relation to prices for port-related services," it says.

"For example, the ACCC understands that the NSW Minister for Roads, Maritime and Freight already has the power to regulate the stevedores’ infrastructure charges under the Ports and Maritime Administration Regulation 2012 (NSW).

"The Victorian Government’s newly established body, Freight Victoria, has also recently been tasked to investigate options for the future role of government in regulating access and pricing to and from Victoria’s ports.

"The recent significant increases in infrastructure charges may require a more detailed examination by state governments and if warranted, a regulatory response.

"Such a review by state governments would be assisted by further information than that obtained by the ACCC under the stevedoring monitoring regime, such as whether cargo owners are benefitting (through lower ‘terminal handling charges’) from the reduction in quayside charges to shipping lines.

"If, after more fully understanding the flow-on effects of the infrastructure charges, the state governments consider that they are having a large detrimental effect on their state’s supply chains and the broader state economy, state governments might consider taking regulatory action.

"Government action could take the form of increased oversight of infrastructure charges by requiring stevedores to seek approval from regulators before implementation of price increases.

"Alternatively, governments could set limits on the rate at which the charges could be increased, or disallow the pricing strategy altogether. If it were to become clear that such action was necessary, then governments should signal this and/or act before stevedores become more reliant on the charges."

All eyes of those involved in the container logistics sphere will be on how state ports ministers and federal transport minister Michael McCormack respond to what appears an open invitation to act.

McCormack said in March that he would await the report’s recommendations before make any decision.

In an even-handed examination of the issues, the report notes that the stevedores face increased land rental, land tax and council rate rises, notably DP World Australia (DPWA) and Patrick have faced property cost increases of 38.2 per cent and 74 per cent respectively.

At the same time, quayside prices and revenues have fallen in that time, due to the entrance of Hutchison in Brisbane and Sydney and Victorian International Container Terminal (VICT) in Melbourne.

Responses have been sought from federal and state governments.

 

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