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Infrastructure charges critic takes ACCC view to task

CTAA and RFNSW glad government body is taking the issue seriously


The Australian Competition and Consumer Commission’s (ACCC) new focus on stevedores’ ‘infrastructure charges’ on container haulage firms has been welcomed by their critics.

But part of their response to the ACCC’s 2016-17 Container Stevedore Monitoring Report sounds a note of frustration that the competition and corporate behaviour watchdog’s comprehension of supply chain concerns.

With the ACCC admitting such charges are beyond the remit of its founding legislation, there appears to be a disconnect in its appreciation of the issues.  

Stevedore critic Container Transport Alliance Australia (CTAA) is one to point out that the ACCC analysis fails to accurately reflect the concerns.

“The ACCC Report notes that Container Transport Alliance Australia (CTAA) together with Freight & Trade Alliance (FTA), the Australian Peak Shippers Association (APSA) and other organisations, opposed the implementation of the new and increased Infrastructure Charges by Patrick and DP World,” it says.

“We disagree with the ACCC conclusion that ‘most of the concerns [expressed] were that the price increases were excessive.’

A main thrust of CTAA’s concerns is that the stevedores were forcing payment of the infrastructure charges by transport operators via “take it or leave it” contracts governing terminal access.

“Transport operators have no say in the payment of the infrastructure charges, no say in the quantum of the charges, and no say in the expenditure of the revenue.  If they were to refuse to pay the charges, their access to terminals may be denied,” it says.

“In layman’s terms, CTAA maintains that this constitutes ‘unfair contract terms’.

“Despite claims to the contrary, transport operators have experienced difficulty in passing on the infrastructure charges to customers (freight forwarders, and/or importers & exporters) in full or in part.”

“Additionally, despite Patrick listening to the views of transport operators regarding the cash-flow implications of the Charges impost and extending their payment terms to 30 days, DP World has flatly refused to do so.”

The CTAA says that if the ACCC estimates are accurate, the transport industry will be ‘underwriting’ the collection of $70 million per annum, and suffering the cost of cash involved in the payment of the charges ahead of being able to recoup the revenue from customers.

“Transport operators rarely enjoy a profit margin above 17 per cent, and aren’t in a position to impose a general market price rise that increases revenue by 5 per cent to 6 per cent in one go,” Chambers says. 

“The landside container logistics market is vastly more competitive than the stevedoring market.

“CTAA Alliance companies welcome the ACCC intention to closely monitor the collection and expenditure of the stevedore Infrastructure Charges.”

CTAA also reiterates its call on the federal government, through the National Freight Strategy, and individual state governments through their own freight improvement planning processes, to implement independent monitoring of key stevedore performance indicators, including:

  • accurate and independent truck turnaround time (TTT) and container turn time (CTT) measurement in all ports
  • vehicle booking system slot capacities per time zone
  • truck utilisation rates, and stevedore practices that limit ‘two-way running’ opportunities
  • stevedore infrastructure expenditure that improves landside logistics interface performance. 

For its part, Road Freight NSW (RFNSW) welcomed the ACCC’s acknowledgment that the charges “raise a number of issues for the port supply chain”, leaving transport carriers with higher operating charges and the inability to switch to other stevedores.

It notes the stevedores announced the new taxes earlier this year without consulting RFNSW or other industry groups.

The stevedores tried to justify the charges by claiming increases in rent, land tax and rates were a “cost burden” they could not absorb and that the new surcharges would be used to fund new infrastructure.

But the ACCC highlighted: “However, overall unit costs for both stevedores remain stable. The ACCC will be interested to see whether these infrastructure charges are used to improve landside facilities beyond business as usual levels.”

RFNSW GM Simon O’Hara welcomed the ACCC’s acknowledgment that the “port taxes” were any issue for transport carriers.

“We are pleased that the ACCC has listened to concerns raised by RFNSW about the effect port taxes are having on our RFNSW members,” O’Hara says.

“It’s encouraging that the ACCC has acknowledged the taxes are an issue for the port supply chain and that it will fully examine the impact of the charges in its 2017-18 stevedore report.”


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