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Surcharge opponents busy as stevedore report looms

Indication of attention as ACCC and politicians lobbied and Baird promise haunts

 

The sense of expectation surrounding container stevedore ‘infrastructure charges’ on haulage firms’ access is deepening in the lead-up to the Australian Competition and Consumer Commission’s (ACCC’s) eagerly awaited report on the ports sector.

Opponents in both freight transport and in trade services are continuing their lobbying efforts as ACCC’s 2017-18 Container Stevedoring Monitoring Report deadline, expected at the end of this month or early next, looms.

They have been buoyed by a recent intervention by “disappointed” Tasmanian premier Will Hodgman, which raised the subject’s profile in the mainstream media.


Read Tasmanian premier Will Hodgman’s views on the access charges, here


With the Victorian election just one month away, it is understood that the message from access charge opponents has made inroads with the state government there.

“I’m disappointed infrastructure surcharges at the Port of Melbourne have been increased,” Victorian roads and ports minister Luke Donnellan said in response to DP World Australia’s most recent hike.

“While these charges are a matter for the stevedores and their individual customers, it is reasonable for industry to expect an improved level of service in return.

“This is exactly why we’ve announced, as part of the Victorian Freight Plan, that we’ll investigate options for the future role of government in regulating pricing/charges, and access to and from the port.”

While observers may quibble about the some details of Donnellan’s take on the issues, a government source insists the state government is clear-eyed about them – telling ATN: “We get it” – and that it has been undertaking industry consultation on how best to proceed as part of Victorian Freight Plan development.

On the lobbying side, Container Transport Alliance Australia (CTAA) says it has raised concerns with the ACCC on whether  the stevedores impose “unfair contract terms” in their access contracts and conditions that may be in breach of the national Competition & Consumer Act 2010 (CCA).

“Australia’s Consumer Laws protect small businesses from unfair contract terms in standard form contracts,” CTAA says.

“A standard form contract is one that has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms – that is, it is offered on a ‘take it or leave it’ basis.

“CTAA characterises stevedore ‘carrier access agreement’ contracts as standard form contracts which transport operators are forced to accept if they want to gain access to the stevedores’ terminals.

“The Chairman of the ACCC, Rod Sims, has confirmed in writing to CTAA that the ACCC is continuing to assess whether contracts offered by the container stevedores to transport operators may contain potentially unfair contract terms.”

CTAA is allied with Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) in resistance to the charges.

“These efforts have included letters to and/or meetings with Federal and State Ministers, advisers and government officials, including in the Federal Department of Infrastructure, Transport, Regional Development & Cities, Freight Victoria and Transport for NSW,” CTAA says.

“In every instance, CTAA is urging an investigation into the relationship between stevedore rates to shipping lines, the level of Terminal Handling Charges (THCs) applied by shipping lines directly to importers / exporters (shippers), and the implementation and quantum of the Infrastructure Charges levied by the stevedores on transport operators.

“Anecdotally, THCs are not reducing following the renegotiation of stevedore contracts between shipping lines and stevedores, and the shippers are also ultimately paying the increased infrastructure charges. The question that must be asked is ‘are shippers now paying twice for the same landside stevedoring services?’”

In New South Wales, Road Freight NSW (RFNSW) has backed Hodgman’s call for an investigation into ongoing increases in port access charges, saying other state governments and the federal government needed to follow his calls for an investigation.

Cost foretold

RFNSW chief executive Simon O’Hara also says the NSW government must honour a commitment to ensure there is ‘robust Government oversight’ of infrastructure charges at Port Botany and support vulnerable trucking operators.

He notes that in 2012, RFNSW predecessor ATA NSW raised serious concerns about the privatisation of port operations, warning: “The potential for a new owner of the ports to impose crippling fees on our industry is of significant concern, and one that appears to have been overlooked in the drafting of this legislation.

“The potential for major impacts on trucking operators is a serious threat. Our industry operates on tight margins, and additional fees and charges are impossible to pass on to customers while maintaining competitiveness.

“The introduction of additional fees and charges will cause some operators to cease trading, causing increased unemployment and reducing productivity on the port.”

O’Hara notes that, in response to ATA NSW’s predictions that the legislation would leave carriers vulnerable, the then state treasurer, Mike Baird, made a number of assurances that the government would retain regulatory oversight of pricing at the port, stating: “… the Bill provides for a transparent pricing regime consistent with the principles adopted by the Council of Australian Governments.

“This includes regular reporting obligations to the Minister and the opportunity to refer any price issues to the Independent Pricing and Regulatory Tribunal for review.

“Third, the infrastructure charge, which the member for Maroubra raised, is subject to robust government oversight, including the price monitoring regime.

“The bill provides that the new port operator must provide details to the Government regarding the details of the infrastructure project, the basis of the charge, the persons required to pay and the time frame.”

O’Hara points to a shortfall between the state government’s promises and a reality the haulage industry had feared.

“Unfortunately, ATA NSW’s earlier warnings that trucking operators would be vulnerable to these spiralling infrastructure charges, have proven to be true,” he says.

“As we’ve seen, there are insufficient constraints on rising port access charges.

“There is no competitive constraint (as increases flow through to other port operators) and the price monitoring regulatory approach is also insufficient and ineffective.

“We are calling on the State Government to honour the commitment it made in 2012 to provide regulatory oversight of port charges and ensure that stevedores do not use their market power to continue gouging transport carriers.”

 

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