Logistics News

Victoria and Tasmania react to latest stevedore hike

VICT move exposes political talk but no torque as APSA goes federal


The Victorian and Tasmanian governments have reacted with varying levels of concern to Victoria International Container Terminal’s (VICT’s) recent container access charges rise.

With the Victorian Department of Transport is in the process of finalising the new voluntary port pricing model (VPPM) and protocols for the way in which any changes in infrastructure charges should be justified, communicated and implemented by stevedores, ATN understands ports and freight minister Melissa Horne has written to VICT to confirm there will be no further changes in charges before July 1, 2021.

“This decision is completely unacceptable – especially at a time when everyone should be pulling together to keep businesses open, Victorians in jobs and goods moving across our supply chain,” a government spokesperson tells ATN.

“We’re working hard to boost landside efficiency at the Port of Melbourne to get goods on and off ships quicker to help drive down costs, but stevedores also need to play their part in driving efficiencies to bring down prices.

“We want to work closely with exporters, importers, land transport operators, stevedores and other port businesses to deliver a more cost-effective and efficient port supply chain.

“It’s in the interests of all Victorians, particularly at a time when the economy is being challenged by the impact of the coronavirus.”

It is the second time during the Covid-19 pandemic that developments at the country’s largest container ports has exposed Horne’s lack of control due to how it was privatised.

The exposure exists for the Tasmanian government, given the state relies heavily on container transhipment to and  from Melbourne’s port.

“The Tasmanian government has previously raised its concerns regarding increases to infrastructure access charges at the Port of Melbourne, including with the Victorian Government, the ACCC and DP World directly,” a government spokesperson tells ATN.

“The Port of Melbourne is a crucial transhipment hub for Tasmanian import and export freight and a focal point for international container movements.

“The Tasmanian Government will continue to monitor developments at the Port of Melbourne and seek to work with all parties to ensure supply chains remain cost effective.”

The mention of the Australian Competition and Consumer Commission (ACCC) is a reminder that it is examining possible action on Part X of the Competition and Consumer Act, which protects container shipping lines, whose consolidation the ACCC  recognises as giving them preponderant market power over stevedores, pushing them to forge land-side  sources of income.

Read how Horne reacted to DP World’s access charge hike during Covid-19, here

Though the states’ relevant departments seem to have allowed the probe to take its course, the federal infrastructure and transport department’s submission addressed the issue in part, saying:

“One observation the Department does make is the emergence of ‘Infrastructure Surcharges’ charged by stevedores directly to shippers for landside access to container terminals.

“These charges are levied in addition to the charges applied to shipping lines for quayside services, which are typically passed through to shippers by shipping lines as a Terminal Handling Charge.

“Shippers have raised concerns the imposition of two charges for stevedoring services has significantly increased the overall cost of importing or exporting a container of goods.

“Whilst these charges and their regulation are not within the remit of Part X, they should be considered in terms of a possible class exemption and the broader ability of Australian exporters and importers to access liner shipping services at competitive rates.

“This consideration is important as they impact directly on the international competitiveness of Australian exporters and the cost of goods charged to Australian consumers.”

With the pandemic and the China threat undermining traditional federal government inertia, access charges opponents are bringing container issues to a wider audience in a society rife with ignorance on transport matters.

For the Freight & Trade Alliance (FTA) and the Australian Peaks Shippers Association (APSA), this includes a formal submission to the Standing Committee on Foreign Affairs, Defence and Trade Inquiry into the implications of the Covid-19 pandemic for Australia’s foreign affairs, defence and trade.

On VICT, FTA director Paul Zalai notes that, VICT justified as a mechanism to provide income to cover a lease increase imposed by the privatised Port of Melbourne.

Zalai argues that all businesses face a dilemma of how to deal with unavoidable costs such as rent, infrastructure, labour and power. Those same businesses are then forced to either absorb costs or pass them on to their commercial clients.

“Similarly, stevedores should be forced to either absorb operating costs or pass these on to their commercial client (shipping lines). Shipping lines then have the choice to absorb or pass this onto shippers (exporters, importers and freight forwarders) through negotiated freight rates and associated charges,” he says in a statement

“In contrast, transport operators (road and rail) are held at ransom, forced to pay an Infrastructure Surcharge to collect and deliver containers with no ability to negotiate price or service.”

Zalai also notes that many transport operators have included administration fees to manage cash-flow associated with these charges resulting in cascading costs flowing through the supply chain. Ultimately, Australian exporters and importers pay further inflated prices.”


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