Risks to ongoing port efficiency rise: ACCC

Lax port privatisation regimes and labour agreements flagged along with road pricing gains

Risks to ongoing port efficiency rise: ACCC
This year’s container stevedoring monitoring report


The Australian Competition and Consumer Commission (ACCC) has backed two major stevedoring firms over post-privatisation pricing.

It has also sought to highlight road user charging for port approaches as an infrastructure revenue stream and peak pricing to handle congestion.

While its 16th annual Container stevedoring monitoring report praises the continuing price and efficiency gains competition reform has provided on the waterfront, the ACCC does identify risks to them in possible regulatory gaps and labour issues related to Maritime Union of Australia militancy.

"The ACCC’s concerns around port privatisations are shared by key port users Asciano and Qube, who have publicly raised concerns about the impact on port costs," ACCC chairman Rod Sims said.

"Business will generally operate more efficiently in private hands, however if a State Government’s privatisation goal is to maximise the sale price, which would come at the expense of poor industry structures or inadequate regulation, this quickly becomes an effective ‘tax’ on future generations."

"The risk remains that labour outcomes or port privatisations could lead to greater costs for container stevedores, other port users, businesses, and ultimately for consumers."

The ACCC identifies three opportunities to improve productivity in container port links in order to handle the expected growth in container volumes.

"Landside connections to container ports have generally not been subject to the level of reform that has taken place in the stevedoring industry," the report concludes.

"Australia has the opportunity to realise considerable efficiencies from reform to the way roads are funded and invested in.

"As container volumes grow, initiatives to improve connections to ports will become all the more important – some of these may involve the adoption by industry of peak pricing models; others may involve industry working together to solve particular problems by aligning the incentives of supply chain participants."

Meanwhile, despite dockside efficiency indicators continuing to rise, truck turnaround times have plateaued over the past seven years and still prove difficult to shift.

Falls over the past 18 months have started to reverse with Sydney in particular experiencing a strong spike since March, according to forthcoming Federal statistics.

"Landside productivity remains an ongoing challenge for all Australian container ports, particularly as container volumes are expected to more than double between now and 2030," the report states.

"Pressures of increasing volumes as well as continued reliance on major road networks to complete Australia’s freight task will require all stakeholders in the landside supply chain – not just the stevedores – to play their part and develop more innovative solutions."

On the labour issue, the ACCC notes that enterprise bargaining agreements (EBAs) are being renegotiated.

"It is important that the gains from enhanced competition and increased capacity in Australian stevedoring are not limited by such agreements," it says.

It sees them as providing "appropriate incentives for further productivity gains in Australian container stevedoring by setting meaningful performance benchmarks as part of the package of rewards and incentives given to employees".

The report can be found here.

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