It’s no secret freight operators in Victoria and elsewhere around Australia have been hit hard by persistent and indiscriminate infrastructure charge increases by stevedores servicing the ports.
Massive price hikes by one stevedore early last year quickly cascaded through to the others, setting off a trend that has continued this year.
Indeed, the stevedores have indicated further increases can be expected as a ploy by them to recover higher utility, rent and other business costs.
The transport industry has had a varied response to these exponential increases. Some groups have called for intervention by the Australian Competition and Consumer Commission (ACCC) and other regulatory bodies to end the hikes, or at least moderate and curtail their excessiveness.
The annual ACCC container stevedore monitoring report issued in late October confirmed what the VTA and others in the industry have long felt, which is that it has no jurisdiction to regulate these increases.
The VTA’s approach since stevedores began their indiscriminate infrastructure charge increases has been to encourage operators to pass higher costs on to their customers through the supply chain, and to press for state government intervention so that we can at least generate genuine landside improvements at the ports.
While no one likes paying more for services, it is unsustainable for operators to absorb such massive increases. Ultimately, consumers at the end of the supply chain need to pay for higher business costs, and we are encouraged that operators for the most part are resisting the urge to wear them.
As for state government intervention, we have had very positive interactions with the Victorian Government, which has led to them bringing forward a review into regulating pricing and charges at Victorian ports, with an emphasis on the Port of Melbourne – the nation’s largest in terms of volume. A key objective of any review must be to end the indiscriminate way stevedores raise infrastructure charges so that operators at least have a fair go at planning for them. We look forward to playing a leading role in the review.
Equally pleasing is that the Victorian Government has accepted a VTA recommendation for a Victorian Landside Improvement Strategy.
If regular price hikes are to be the new normal for freight operators servicing the port, stevedores must provide a tangible return in the form of genuine improvements that provide productivity and efficiency gains to help offset higher costs.
Many of the issues set out in the VTA strategy are expected to feature prominently in the upcoming review, particularly ways to offset limitations on operators from achieving greater productivity and efficiency, including financial penalties, vessel bunching, poor asset utilisation and prolonged waiting times for trucks.
The scope of the strategy is to create an industry-driven set of benchmarks and actions to improve landside port operations, initiate a stakeholder shared discussion on supply chain systems to drive effective solutions, and ultimately implement specific changes to improve freight throughput.
As important as the review is for transport operators and providing them greater certainty about prices and charges, even more important is that it leads to outcomes that will preserve Victoria’s status as the freight capital of Australia.
Every stakeholder at the Port of Melbourne including operators, stevedores, shipping lines, and container park operators, as well as the departments and agencies that have oversight over their operations, have an obligation to the people of Victoria to achieve conditions at the port that keeps Melbourne and Victoria an attractive entry and exit place for freight.
Ending indiscriminate infrastructure cost increases and making genuine landside and quayside improvements at our ports would be good for all Victorians, and we look forward to playing a leading role in a review that will hopefully give all port operators a better deal at the port.
As we approach the holiday season I would like to thank you for your support this year and wish you all a very merry Christmas and best wishes for the New Year.
Please take every precaution to keep your workers, your family and yourself safe on the roads and elsewhere, and I look forward to continuing to advocate for our great industry on these pages in 2019.