National feeding frenzy comes to Victoria as states watch on
Empty container parks (ECPs) in Melbourne have followed the interstate trend by advising significant increases in truck arrival notification fees to commence in January, Container Transport Alliance Australia (CTAA) warns.
The Melbourne fee increases range in size from 82 per cent to 344 per cent of current notification fees.
The present position comes as landside port-exposed businesses search frantically for ways to recoup revenues lost to privatised port operators, stevedores and container shipping lines
Despite stern words from New South Wales transport and ports minister Andrew Constance aimed particularly at the stevedores, counterparts in other states remain effectively mute as state governments appear to have lost control of the situation.
The Melbourne ECP fee increases come on top of the notices to industry from stevedores DP World Melbourne and Victoria International Container Terminal (VICT) about increases in their landside terminal infrastructure fees from January 1 to $98 (+GST) and $121.80 (+GST) per full container respectively.
ATN has sought comment from state ports minister Melissa Horne this month, both on Victoria scoring a national record terminal access fee at VICT earlier this month and now the injecting of more costs into the state’s economy through ECPs’ rising charges and is still awaiting a response.
“The ECPs have cited a range of reasons for the fee hikes, including increased operational and labour costs, infrastructure requirements, IT fee increases, maintaining extended operating hours (in some cases) and/or EPA compliance costs.
“There is certainly an element in the announcements of the ECPs now using the truck arrival notification fees to recover revenue lost from shipping lines.
“For example, the return of empty containers directly to stevedore terminals (DRE) is estimated to currently account for over 20 per cent of empty import container de-hires, leading to lost handling and storage revenue for traditional ECPs. No doubt, this trend will continue.
“These significant fee increases cannot be absorbed by container road transport operators in Melbourne, who are liaising with their customers before Christmas to advise them of their fee recovery arrangements.”
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CTAA underlines that, with the stevedore infrastructure fees, transport operators must pay the ECP truck arrival notification fees well in advance of being able to recover these costs from customers – from 30 to 60 days or more.
This time lag is seen as having a cash-flow burden and risk, along with added administration costs in reconciling fees.
“Any new costs in the container logistics chain can be difficult to manage and can impact on profitability and competitiveness,” CTAA says.
“These fee increases are no exception.
“CTAA looks forward to the Port of Melbourne Pricing and Access Review being completed by the Victorian government in early 2020, and we hope that the findings of the independent review will be made public for consultation.”
“In addition, CTAA continues to strive to voluntarily bring together transport operators, empty container park operators and others in the container logistics chain to address empty container management inefficiencies and productivity concerns.
“We believe that all parties in the chain need to work together to off-set these cost increases with further productivity and efficiency initiatives.
“This will also require the cooperation of shipping lines and the Port of Melbourne.”