New Victorian ports plan in the offing


CTAA critiques state government review response on access charges

New Victorian ports plan in the offing
Part of the review response cover

 

Victoria is on course for a new state ports policy, the state government’s Independent Review of the Victorian Ports System initial response reveals.

While the review’s headline action is to create Ports Victoria as a single entity merging the three state-owned port authorities, the initial response touches on matters, some that affect trucking directly.

Ports Victoria is to begin operation in July, with stakeholder engagement on the Victorian Ports Strategy and a final response to the review due around the same time, and implementation of the response at some stage late in the year.

On the fraught issues of ongoing, unregulated and unconstrained rises of stevedore charges on haulage, the state government’s initial response states: "The review found that while stevedores exercise market power by levying terminal access charges (TACs) on transport operators, the evidence does not suggest they are using this market power to inflate profits.

"Despite recent price increases, the review noted analysis from the Australian Competition and Consumer Commission showing stevedore rates of return have declined over the last decade. T

"This was supported by analysis that indicated the end-to-end supply chain cost of importing a container has not increased in real terms. The review supports the implementation of the Voluntary Port Performance Model.

"The review leaves open the option to restore formal price regulation should TACs emerge as a key driver of increased stevedore profitability."

But Container Transport Alliance Australia (CTAA) regards the statement as telling less than the full story.

"It is correct to state that container stevedore rates of return have declined over the last decade as shipping line contracts have enjoyed lower pricing per container ‘lift’," CTAA states.

"However, the Victorian Government's response does not acknowledge the most recent ACCC Container Monitoring Report (2019-2020), published in October 2020, which noted that ‘operating profit margins for the industry (stevedores) increased for the first time in a decade, from 5.8 per cent in 2018–19 to 9.9 per cent in 2019–20, largely due to revenue growth from landside charges’." 


Read about the how formation of Port Victoria first emerged, here


On the positive side, the state governments pledges to with the Commonwealth and the Australian Competition and Consumer Commission’s (ACCC’s) review of Part X of the Competition and Consumer Act 2010, which governs competition flexibility for containership lines.

This section is viewed by critics as out of date and allowing  the now highly consolidated lines to have overbearing power in negotiations with stevedores, thereby leading to the push for landside revenue streams to the detriment of haulage interests.

Worryingly, given protection of adjacent land and freight corridors have been highlighted as crucial for more than a decade, the review response notes the review finds that "buffer controls for incompatible uses in the land surrounding the state’s commercial ports require strengthening".

This includes for the proposed port at Bay West, between Melbourne and Geelong, with action regarded as "a matter of urgency".

"The Victorian Government is progressing this important work through planning mechanisms and its update to the Principle Freight Network," the initial response states.

The most recent ACCC Container Monitoring Report can be found here.

 

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