No go slow on ancillary charges, which rise more than 50 per cent
DP World Australia (DPWA) is deferring the review of terminal access charges (TACs) at all its Australian container terminals to 2021.
The stevedore says this is with a view to ease burdens as the national economy recovers from the Covid-19 economic shock.
However, ancillary charges will increase from January 1 and its unilateral and unregulated TACs will rise again as soon as it deems other costs have risen.
Ancillary charges will be amended at its Brisbane Terminal, and new and amended ancillary charges will come into effect at the Sydney, Melbourne, and Fremantle Terminals.
“DP World is proud of its response to meet the challenges of 2020, alleviating supply chain disruptions, and ensuring the steady flow of goods around the country to businesses and consumers,” DPWA chief operating officer Andrew Adam says.
“As with most regulated sectors, these charges are being adjusted to further align costs more equitably across the supply chain.
“We placed our terminal access charges on hold as the country went through the worst of the economic downturn due to the Covid-19 pandemic. But as we start to see early signs of a recovery, we must continue to assess our business operations, as you would expect in a competitive market.”
“Australia’s stevedores have made considerable investments in new and innovative infrastructure and technology over the past eight to 10 years, delivering tangible benefits for business owners, transport operators, and Australian households.
“As a result of these ongoing investments, landside operations at DP World Australia’s terminal continue to be some of the most efficient in the global stevedoring market.
“Rebalancing of terminal charges ensures DP World Australia can continue improving port infrastructure to safeguard the competitiveness and sustainability of Australian ports.”
DPWA says it is also making changes to how it notifies stakeholders of these changes.
“We are working across jurisdictions to align where we can with the recommendations of the Victorian Government’s new Voluntary Port Performance Model (VPPM), our Carrier Access Agreement, and New South Wales Government Regulations, although this transition will take time,” it says.
Read about the ACCC’s container stevedore monitoring findings, here
The call is met with caution from Container Transport Alliance Australia (CTAA).
“It is pleasing in the current economic and operating climate that DPWA has decided not to increase its terminal access charges in 2021,” CTAA director Neil Chambers says.
“As the last ACCC Container Stevedoring Monitoring Report shows, terminal access fees now make up a significant percentage of stevedore revenues, and CTAA believes there is no justification for any stevedore to increase these fees as the Australian economy faces a long road to economic recovery.
We are wary, however, that such a respite from access fee increases might not last past 2021.
“DPWA has mentioned that its long-awaited new Enterprise Agreement with its workforce will come at a cost, including annual wage increases over the next three years.
“There will be an overwhelming temptation to recover these rising labour costs from the landside sector through increased access fees, rather than increasing rates on the stevedores’ traditional customers, the shipping lines.
“The increase in the Vehicle Booking System (VBS) fee by $10 per slot – a 54 per cent increase – adds further cash-flow strain to transport operators who must pay these transaction fees well before they are able to be recovered from customers.
“CTAA understands that DPWA continues to invest in interface technologies … that investment is welcomed.
“However, transport operators rightly want to see productivity and landside interface performance improvements to offset the rising costs of accessing the terminals”.
CTAA is urging DPWA to double its efforts to work with road and rail transport providers to improve turnaround performances and to allow transport operators to maximise vehicle utilisation rates.
“We need to offset the higher cost of access with productivity improvements,” Chambers says.
“This can only be achieved through mutual efforts at the terminal level.”