Prime Mover Magazine

VTA Strategy aims to protect wharf carriers from exploitative Port of Melbourne

Access surcharges and inflated ancillary costs used by the Port of Melbourne to exploit road freight operators has compelled the Victorian Transport Association to release a fairness strategy.

Rampant increases to stevedore infrastructure charges since the Victorian Government leased the port in 2016 have increased to 40 times higher than what they were to make it the most expensive port in the southern hemisphere.

It spells bad news for the Victorian economy as a pricing regime without any meaningful productivity improvements for operators will be shifted to the consumer to the detriment of the landside supply chain and the road freight operators moving goods to and from the wharf.

The Landside Improvement Strategy produced by the VTA aims to address fees, penalties, local access and vessel "bunching" with common-sense recommendations and solutions.

"After three years, and average infrastructure surcharge increases by the three stevedores servicing the Port of 4189% it is abundantly clear that this new environment has been to the overall detriment of the landside supply chain, and the road freight operators moving goods to and from the wharf," he said in a statement.

"With little legal protection, and operating from within a largely monopolistic environment, these freight carriers have been forced to bear the brunt of opportunities that other wharf-related stakeholders have now exploited," said Anderson.

The $9.7 billion windfall from the lease of the Port was offset by anticipation that it would help secure Melbourne as the freight powerhouse of Australia and was spurred on by promises it would be further enhanced by ongoing developments according to VTA CEO Peter Anderson.

Low inflation in a stagnant economy has kept costs down for moving a container by road over the past four years even as the ancillary costs imposed and increased exponentially by the stevedores has skyrocketed well beyond any reasonable pub test’s level of acceptance according to Anderson.

"Can you think of any other industry where regular doubling and even tripling of charges in such a short period of time are the norm? I can’t either," he said.

In 2016 the average Timeslot Booking Fees per container was $5.90.

By next year it will have increased to $15.76.

Average annual Vehicle Booking System registration fees charged by Port of Melbourne stevedores have risen four-fold from an average of $44.13 in 2016 to $183.00 in 2020.

Anderson also pointed to Vehicle no-show, time-slot and cancellation fees which have had similar increases, however, cited the terminal access charge as a real source of angst for road freight carriers servicing ports around Australia.

"It was barely on the radar in 2016 when the average surcharge by stevedores servicing the Port of Melbourne was just $3.57," he said.

Serial increases since then, justified by higher rent, energy and other costs, has subsequently resulted in infrastructure charges as much as 40 times higher to generate millions of dollars for stevedores who are at the mercy of global market forces.

"Higher rent, energy and other costs was the main argument they used to justify what can only be classified as serial increases since then – the average infrastructure surcharge at the Port of Melbourne, per container, will be between $98.76 - $121.80 in 2020 – more than 40 times higher."

"There is no avenue for appeal and no means of offsetting the cost, with the wharf carrier being left with passing these costs onto their customer and ultimately the consumer," said Anderson.

An ACCC Container Monitoring Report released last month showed truck turnaround times at Australian ports nationally worsened to an average of 29.3 minutes.

At present, the average truck turnaround time at the port of Melbourne is 51.5 Minutes per load according to monthly carrier data.

"Managing cash flow, being squeezed off the road by curfews and road access limitations and the unpredictability of the next huge price increase, are a perfect storm for wharf carriers who face an uncertain future," said Anderson.

"Productivity and efficiency are the last priorities by those that impose the additional costs. There are no controls or predictability of the consistent grab by these stakeholders to continue to use wharf carriers as their margin collectors," he continued.

The VTA hopes that the common-sense recommendations and solutions it has put in front of the Government will help to ensure growth in productivity and efficiency at the Port of Melbourne.

"The strategy has been developed to ensure that all landside port-related stakeholders are dealt with fairly and openly and that the wharf carrier sector is not taken advantage of in the future."

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