State does effectively admit policy analysis was out of date
The Victorian government still finds itself unable to discuss why financial and support for mostly multinational stevedoring firms must be given by consumers, exporters and container haulage firms.
The outcome occurred despite the most detailed response to any questions on stevedore policy by any state – ports being a state responsibility – in the years since ATN began seeking an explanation of them
This time around, the Victorian government was asked three questions:
- Does the state government accept that the review report’s analysis of stevedores’ power was out of date by the time the review findings were published?
- Why did the state government allow stevedores to establish an unregulated landside revenue stream?
- Given the reasoning for not regulating stevedores’ landside-revenue actions is not in itself commercial in confidence, will it reveal what that is?
In response, a spokesperson instead settled on amplifying the government’s Voluntary Pricing Policy (VPP), which seeks to have stevedores flag and explain their various and increasing but otherwise unrestrained charges on those that are not its customers.
“Our Voluntary Pricing Protocol was established following a comprehensive, independent review into port pricing and works to increase pricing transparency across the sector,” the spokesperson said.
“This has been in place since 1 July 2020, with all Port of Melbourne container stevedores now operating under the model.”
“We’re closely monitoring the impacts of the pricing model across the supply chain. Should the voluntary protocol be ineffective, economic regulation may be taken into consideration.”
The government explains that while infrastructure charge revenue has increased, there has also been relatively significant increases to fixed port rents, equipment costs, labour and other items.
Critics point out that these costs should be carried by the stevedores’ customers, the container shipping lines who have a direct link with exporters and importers, rather than a new costs burdening the land-side container logistics chain.
The government views factors leading to increased costs across the Victorian port supply chain as national challenges impacting all ports.
Read about the Voluntary Performance Monitoring Framework, here
All Port of Melbourne container stevedores are operating under the Voluntary Pricing Protocol (VPP).
The implementation of price notices and adherence to the protocol will be monitored over time to ensure effectiveness.
The VPP was recommended as the first step to ensure fair and transparent pricing following the privatisation of the Port of Melbourne.
It has provided the basis for work on national port pricing guidelines in development by the National Transport Commission (NTC).
The government does tacitly acknowledge the first question, noting that the independent Port Pricing and Access Review conducted by Deloitte Access Economics was completed in early 2020 and cited the Australian Competition and Consumer Commission (ACCC) 2018-19 Container Monitoring Report.
It asserts that the review was the first state-based review motivated by the need to ensure ports are efficient and fair pricing to assure that exports remain cost-competitive but admits the ACCC 2019-20 report was published following the finalisation of the review.
Container line protection
A subsequent ATN question related to the ACCC review into Part X of the Competition and Consumer Act 2010, a Commonwealth process examining the current exemptions for competition under international cargo shipping services law. The review began in late 2019.
The state government signalled it will continue to cooperate with the ACCC process and provide input when needed.
It notws that Victorian Minister for Ports and Freight Melissa Horne and NSW Minister for Transport and Roads Andrew Constance have both been strong, ongoing advocates for a national approach to port pricing – coming together prior to the ACCC review to call for an Australia-wide strategy.
It states that the development of this approach is already underway, and once complete, will establish a set of voluntary national guidelines for stevedore infrastructure and access charges at Australia’s ports.
It asserts that his approach will ensure more transparency and consistency at our ports to give exporters and producers more certainty around costs, and clear communication around any price increases, no matter where they are doing business across Australia.
CTAA response
A central interested observer of landside containerchain costs has been road haulage body Container Transport Alliance Australia (CTAA).
CTAA told ATN that is “certainly appreciates the support” of Horne, as well as Constance and other state transport ministers for referring the development of national stevedore landside pricing guidelines to the NTC.
“CTAA has engaged extensively with the NTC, and we are eagerly awaiting draft guidelines to be circulated for industry comment,” a spokesperson said.
“It is hoped that the national process can be finalised to put to a meeting of transport ministers towards the end of 2021.”
CTAA notes that while the national process may harmonise the notice periods for stevedore price increases, and commit stevedores to longer consultations with governments and industry before implementation, it is less likely to safeguard industry from excessive landside access fee price increases unilaterally imposed by the stevedore companies
“As flagged by Minister Horne, if the voluntary approach proves to be ineffective in curbing pricing excesses, then economic regulation may be a consideration,” the spokesperson continues.
“We thank the Victorian Minister for keeping this option on the table for future consideration.
“Importantly though, CTAA is encouraging all state governments to pay greater attention to indicators of productivity and efficiency in the stevedore / landside interfaces.
“Landside stakeholders rightly want to see continuous improvements in these indicators.
“How are the funds generated by the stevedore companies through landside terminal access fees being invested in terminal interface improvements?
“What productivity and efficiency offsets are landside stakeholders going to enjoy?
“If the answer is none or next to none into the future, then naturally landside stakeholders will seek further government regulation of not just access pricing but over the landside interfaces themselves to regulate positive change.”