ACCC prevails on stevedore trio to remove likely unfair contract terms
After years of battling ever-increasing stevedore infrastructure surcharge hikes, container trucking interests have gained some traction on issue with the Australian Competition and Consumer Commission (ACCC).
With federal options limited and state governments offering slow or no action, surcharge opponents have found power in one of their arguments – unfair contract terms.
“DP World Australia, Hutchison Ports Australia and Victoria International Container Terminal (VICT) agreed, after the ACCC’s intervention, to remove or amend terms in their standard form contracts that the ACCC considered were likely to be considered ‘unfair’ within the meaning of the Australian Consumer Law,” the ACCC says.
“DP World and Hutchison had contract terms that allowed a stevedore to unilaterally vary terms in the agreements without notice, including fees paid by the land transport operators.
“DP World and Hutchison also had terms that limited their liability for loss or damage suffered by the transport businesses, while not offering the transport businesses the same protections.
“VICT’s contract had a term requiring transport businesses to indemnify VICT for loss or damage, with no reciprocal obligation on VICT.
“DP World’s standard agreement also required the transport businesses to pay the stevedore’s legal costs and expenses, in circumstances where such payments would normally be determined by court order.”
While elated at notching up some sort of shift, long-term surcharge opponent Container Transport Alliance Australia (CTAA) acknowledges its partial nature.
“CTAA is the only organisation that pursued these issues on behalf of container transport logistics companies Australia-wide,” director Neil Chambers says.
“We have been in touch constantly with the ACCC about this.
“While the ACCC hasn’t stopped the behaviour of the stevedores hiking their infrastructure charges without consultation, they will now need to give at least 30 days’ notice in the future.
“CTAA, along with other bodies such as FTA [Freight and Trade Alliance] and APSA [Australian Peak Shippers’ Association] will continue to pursue state governments to inquire into the whole situation with unregulated cost imposts on the landside container logistics sector.”
Read how the CTAA explained the unfair contract angle to the charges, here
The ACCC states that Hutchison has made its commitments in a court enforceable undertaking and will also place a corrective notice on its website and put in place a compliance program.
Those contract terms which previously allowed the stevedore to amend the contract without notice have either been removed, or now require the stevedore to give 30 days’ notice of any changes, including for any price rises.
“Thousands of transport businesses, which have standard form agreements with DP World, Hutchison and VICT, stand to benefit from these changes,” ACCC commissioner Sarah Court says.
“The handling of containers has a direct bearing on the cost of goods in Australia and the competitiveness of Australian exports, so it is crucial for businesses and consumers that the supply chain operates fairly and efficiently.”
The ACCC examined the impact of rising surcharges in its Container stevedoring report 2017-2018.
The analysis reinforced that operations around ports were a state matters, leading federal infrastructure and transport minister Michael McCormack to withdraw from the issue.
While the Victorian government is moving towards an inquiry into port-related charges, New South Wales has refused to engage in it, though some observers believe it and other states are waiting on the outcome in Victoria.
Given the surcharges ultimately affect the competitiveness of exporters and the raise the cost of imported goods to consumers, the lack of political attention has puzzled trade-related interests but the ACCC’s move is welcomed amongst them.
“This is an important decision by the ACCC and acknowledgement must be made to FTA affiliate the CTAA for their work in this area.
“The decision shows that the stevedores cannot act with impunity and that the regulator is not only monitoring the commercial arrangements at the wharf but they also have the powers and willingness to intervene when necessary,” FTA director Travis Brooks-Garrett says.
“These wins are not just symbolic either. Addressing the liability for loss or damage suffered by transport businesses is a big step forward, particularly when cases of damaged equipment inside the terminal gates are not infrequent.
“Unfortunately for Australia’s shippers, shipping contracts, notoriously one-sided and unfair, are specifically excluded from the unfair contract terms protections.
“While this is a small but important step forward, all of industry is still appealing to state governments to deal with the much bigger crisis, rising and unregulated terminal access fees.”
Also welcoming the move was another long-term opponent, Road Freight NSW.
RFNSW CEO Simon O’Hara says: “RFNSW has previously raised our concerns with the stevedores about their unfair contracts.
“Landside operators have been forced to ‘take it or leave it’ when it comes to stevedores’ contract terms.
“We’re pleased that the ACCC has intervened and forced the stevedores to amend their contracts.”
Stevedore responses have been sought.