Logistics News

Shipowners object to ESC on Melbourne port cost hike

SAL argues port operating company stands to gain from expansion anyway


Shipowners’ body Shipping Australia Ltd (SAL) says it has lodged a submission with the Victorian Essential Services Commission (ESC) objecting to a price hike plan by the private operators of the Port of Melbourne (POM).

In its 2021-22 ‘rebalancing application’ to the Victorian ESC, the port operators propose upping prices for visiting vessels to fund an infrastructure upgrade to allow it to handle bigger ships.

With the February 1 ESC deadline for submissions now past, SAL reveals it argued that the need for an upgrade was known and understood by all involved in the privatisation process and should have been factored in at the time.

Read how the Melbourne port tariff change issue emerge, here

It states that, as with any other business, such an upgrade should be paid through borrowings or its own resources, given that the POM stands to gain more profits from the extra business this will provide.

Should its objections be set aside in the ESC’s determination, SAL is calling for the following moves:

  • A prohibition on any price increase, tariff, surcharge or other price increase of any shape, form, or kind being introduced to fund infrastructure until such time as the extra infrastructure is actually ready for use
  • Any funding mechanism should take the form of a clearly-labelled, discrete and differentiated surcharge that is invoiced on a line-item basis and is provided together with a statement explaining what the charge is, who introduced it and why it is being charged
  • Any price increase, surcharge etc should be specifically and publicly limited in amount, scope and duration. There should be a specific prohibition on that mechanism being rolled over, absorbed into other charges, continued or extended in any shape, form, or in any way whatsoever
  • Any surcharge should be given a specific name, with specific spelling, which cannot in future be changed or amended. There should be a clear and unambiguous explanation in plain English prominently displayed on the Port of Melbourne’s website of what the charge is, how it is calculated and applied, how much it costs and when it will end.


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