DCN December Edition 2019

More documents

Recommendations

Info

INDUSTRY OPINION Exporters worst hit by stevedore charging regime Paul Zalai provides a response to the recent DPWA announcements of increased infrastructure surcharges and ancillary fees effective 1 January 2020 THE INFRASTRUCTURE SURCHARGE AN EXPORTER’S PERSPECTIVE to another 265% increase in just over a (now more appropriately renamed by In recent correspondence we received from year, surprising for a system that uses an DPWA as a Terminal Access Charge) will Fletcher International Exports in Dubbo “electronic” user interface. increase at Fremantle, Melbourne, Sydney NSW, the impact of the Infrastructure Again, we ask that stevedores recover all and Brisbane and will apply to all full Surcharges/Terminal Access Charges costs from commercial clients rather than containers received or delivered to/from highlighted a significant reduction in imposing unregulated and increasing costs landside operators to the terminal. Full margins that are passed down the supply on transport operators who have no option containers received or delivered via road chain to the farmer through lower paddock but to pay for terminal access. will be charged to the road carrier through prices for their grain. the 1-Stop Vehicle Booking System. Full “For FIE’s NSW business alone the WHO BENEFITS? containers received or delivered to rail will infrastructure levy equates to a whopping It also needs to be questioned ‘who is be charged to the rail terminal operator as $1,775,600.00 paid annually, ultimately benefiting by increased VBS fees’? The a separate item on the invoices produced. creating the equivalent void back with DPWA Fremantle Notice justified an As outlined in the table, DPWA has the regional farming communities,” FIE says. increase in fees by stating initiatives have highest Infrastructure Surcharge/Terminal The correspondence also highlights there delivered a 20% improvement in road Access Charge of all Australian stevedores. has been no commensurate performance efficiency for carriers and contributed The rate of increase is particularly alarming improvement from stevedores since to an increase in rail utilisation. This with no signs of abating. To put this in the introduction of the Infrastructure statement is at variance to the recently context, the rate at DPWA in Melbourne Surcharges/Terminal Access Charges and released ACCC Container Stevedoring has gone up from $3.45 to now being $98. expressed serious concerns that there are Monitoring Report 2018-19 report that This equates to a staggering 2850% increase no regulated controls to cap existing costs. clearly shows truck turnaround times in in just three years. The impacts are forcing FIE to consider Fremantle worsened by 1.6% to an average We continue to ask regulators to look a move away from containerised trade of 22.4 minutes and truck utilisation went at this model adopted by all Australian movements to bulk vessel alternatives. down 1% to 2.41 TEU per truck. container stevedores of collecting revenue from third party transport operators. Our ROAD (VBS) ANCILLARY CHARGES LEAD TIME FOR FEE INCREASES argument remains that all charges should The “sleeper” in the debate is the DPWA say they recognise the importance go back to the stevedore’s commercial client administration fee for the electronic of working closely with transport being the shipping line. It is then up to Vehicle Booking System that will also operators as part of implementing new or the shipping line to either absorb this cost increase at all four of our terminals, increased charges which is why they are or pass it on in a negotiated commercial effective from 1 January 2020. While we providing extended notice, of 60 days, to relationship with freight forwarders, are focused on the main Infrastructure assist with this transition. The reality is importers or exporters. Low margin commodity exporters are particularly hardest hit by Infrastructure Surcharges/Terminal Access Charges at a time also when drought and other supply chain pressures are impacting exports. Surcharges/Terminal Access Charges, ancillary charges are also rapidly increasing with a VBS administration fee (electronic) being charged $18.45 per slot from 1 January 2020, when in December 2018 they were only $6.95 per slot. This equates there is no transparency in the process and furthermore, DPWA’s definition of consultation is to give us, as the peak shipper industry body, a courtesy call 15 minutes before making the formal announcement. Aerovista Luchtfotografie 32 December 2019 thedcn.com.au
Sixty days lead time is insufficient and is in fact a reduction to similar announcements DPWA made the previous year that offered a 90-day lead time. We received an example of the impact to a major WA exporter that these charges will cause significant losses on existing forward supply commitments and threaten the future viability of much of their business. “These fee increases equate to more than $1.50 per tonne on every container that we ship through DP World Fremantle from 1st January 2020. This fee has also been without consultation or sufficient pre-warning, extending the losses to our existing businesses caused by the abovementioned Low Sulphur Fuel Surcharge.” SUPPLY CHAIN IMPACT Furthermore, transport operators are understandably passing Infrastructure Surcharges/Terminal Access Charges down the supply chain, usually with an additional administrative fee causing a further cascading effect of costs onto exporters and importers. Again, this adds weight to our argument fees should be negotiated and paid via contracted parties and not imposed on transport operators. RE-BALANCING REVENUE RECOVERY DPWA provide a general rationale of increased Infrastructure Surcharges/ Terminal Access Charges at each of their four container terminals that they are experiencing rising costs in the most dynamic and competitive market conditions in decades. DPWA claim a need to rebalance revenue recovery from waterside to landside to adequately account for landside costs and being fundamental to a sustainable future in this challenging market. If the stevedores are in fact “rebalancing” revenue recovery, then the obvious beneficiary are shipping lines who are paying them less. The latest ACCC Container Stevedoring Monitoring Report 2018-19 shows revenue from quayside falling from $266.10 per lift in 2009/10 to just $190.40 per lift in 2018/19, almost a 40% reduction. The report also says since the last reporting period (between 2017/18 and 2018/19), the quayside revenue per lift has reduced by 8.1%. Remarkably, in a depressed economic environment, stevedores have still managed to increase average revenue per container lift for the first time in seven years. According to the ACCC report, this is attributable to the continuing cycle of increases in stevedore Infrastructure Surcharges. Something does not stack up as shipping lines are certainly not passing on savings to exporters and importers via lower terminal handling charges. The result being that exporters and importers are copping a double whammy of increasing charges without any offset or reduction in shipping line administered terminal handling charges. FINAL THOUGHTS While Infrastructure Surcharges/Terminal Access Charges provide stevedores with a healthy profit, they have significantly increased the commercial strain on logistics service providers who must carry the impost of the charges in the first instance and ultimately pass costs onto exporters and importers. Paul Zalai, director and co-founder of the Freight and Trade Alliance and secretariat to the Australian Peak Shippers Association According to the World Bank Group report Doing Business 2019, Australia ranks 103rd for “trading across borders” which measures a variety of costs including domestic transport. These spiralling increases in unregulated fees administered by Australian stevedores will only further negatively impact on our international standing. While we continue to benefit from Free Trade Agreements, Mutual Recognition Arrangements and the like, our respective state and federal governments now need to look at market access barriers at our ports and introduce regulation to support our trade sector. More must be done to ensure a level-playing field for shippers and transport operators. INFRASTRUCTURE SURCHARGES - AS AT NOVEMBER 2019 Image supplied STEVEDORE PORT INFRASTRUCTURE SURCHARGE/ TERMINAL ACCESS CHARGE DATE COMMENCED TERMINAL ACCESS CHARGE INCREASE COMMENCING 1 JAN 2020 Flinders Adelaide Container Terminal Adelaide $28.50 per full container + GST 1 Jul 18 Australian Amalgamated Terminals Brisbane $38. 70 per full container + GST 8 Nov 18 DP World Australia Brisbane $65.15 per container + GST 1 Jan 19 $89 per container + GST Hutchison Ports Brisbane $50 per full container + GST 19 Aug 19 Patrick Brisbane $71.50 per laden container + GST 4 Mar 19 DP World Australia Fremantle $8.22 per container + GST 18 Sep 17 $45 per container + GST Patrick Fremantle $7.50 per laden container + GST 12 Mar 18 DP World Australia Melbourne $85.30 per container + GST 1 Jan 19 $98 per container + GST Patrick Melbourne $82.50 per laden container + GST 4 Mar 19 Victoria International Container Terminal Melbourne $85.00 per full container + GST 1 Mar 19 DP World Australia Sydney $63.80 per container + GST 1 Jan 19 $91 per container + GST Hutchison Ports Sydney $63.11 per full container + GST 18 Nov 19 Data collated courtesy of the Australian Peak Shippers Association, Freight & Trade Alliance and the Container Transport Alliance Australia thedcn.com.au December 2019 33
Page 1 and 2: First published in 1891 December 20
Page 3 and 4: Port Botany is Australia’s premie
Page 5 and 6: INSTANT PRICING AT YOUR FINGERTIPS
Page 7 and 8: Up close and personal. Whatever you
Page 10 and 11: News in brief Full details at thedc
Page 12 and 13: NEWS IN BRIEF Gangway injury prompt
Page 14 and 15: NEWS IN BRIEF LODESTAR AND SWIRE TO
Page 16 and 17: 2019 DCN AUSTRALIAN SHIPPING & MARI
Page 28 and 29: WOMEN IN MARITIME Navigating treach
Page 30 and 31: 40 YEARS OF PORT BOTANY NSW Ports i
Page 34 and 35: NORTHERN TERRITORY FUELLING CHANGE
Page 36: NORTHERN TERRITORY An artist’s im
Page 39 and 40: “Some of the minerals have come b
Page 41 and 42: Picked one day and on plates in Asi
Page 43 and 44: See further and manage shipments fa
Page 45 and 46: Initial design concepts have been u
Page 47 and 48: Women will understandably pursue al
Page 49 and 50: Marine Cargo Specialists Marine Car
Page 51 and 52: a just as problematic as being into
Page 53 and 54: Keeping the ports of NSW safe, secu
Page 55 and 56: Ian Ackerman Andrew Hudson, partner
Page 57 and 58: Helping economies grow and customer
Page 59 and 60: Devinder Grewal, consultant, AISTL
Page 61 and 62: Patrick Terminal, Port Botany, Sydn
Page 63 and 64: Paul Deacon and Carolyn Brush at CB
Page 65 and 66: Australia’s best connected gatewa
Page 68: Sourcing the most important link in

DCN December Edition 2019

Create successful ePaper yourself

Delete template?

Save as template?