Trucking charges at Australian container ports are surging and consumers may foot the bill.
Arthur Tzaneros and his father set up their trucking firm back in 2005, but he has never seen stevedore charges so high.
Based at one of Australia’s biggest container ports, Port Botany in Sydney, ACFS Port Logistics has become the biggest privately-owned container logistics firm in Australia.
But the ACFS chief executive is worried about the future of his business.
Mr Tzaneros said fees charged to load and unload cargo by port operators, known as stevedores, have increased by nearly five fold since 2017.
Figures from the transport industry group, the Container Transport Alliance Australia, show the average fee for unloading an import container off a ship has surged from an average of $24.52 in mid-2017 to $121.87 in March 2021 in New South Wales.
In Queensland the fee has jumped from $34.63 to $118.59, and in Victoria it has surged from $27.07 to $128.51 in less than four years.
Peter Anderson from the Victorian Transport Association said the problem for truckers is that shipping lines contract with a single stevedore for cargo, so they are forced to accept the charges to gain access to a port.
There is a range of new and increased fees imposed by port operators like Patrick Terminals and DP World on transport firms to access the now privatised ports.
Mr Tzaneros said a vehicle booking fee to reserve a spot for a truck to pick up or offload containers at Port Botany had jumped by nearly half over the past year alone.
Patrick introduces long vehicle charge
Maritime giant Patrick Terminals has now introduced a new fee for longer vehicles, known as high productivity vehicles, in Sydney and Brisbane.
The charge of $50 per long vehicle has been slammed by the CTAA as a “productivity tax” and the transport group is calling for it to be abandoned.
“This is clearly unacceptable to transport operators and their import and export customers as it simply adds significant additional costs into the use of highly productive and efficient road freight vehicle combinations that have kept the costs of transport down for the end consumer,” said CTAA director, Neil Chambers.
Patrick Terminals chief executive Michael Jovicic said the new charge is needed because it takes more time for long vehicles, which have two or three trailers, to be loaded or unloaded, and he needs to employ at least one extra worker per shift.
He said Patrick is following government moves to reduce road congestion and encourage the use of rail by charging a long vehicle fee.
Mr Tzaneros disputes Mr Jovicic’s arguments about the time it takes for long vehicles to be serviced by stevedores.
He added that there is not enough cargo capacity at Patrick’s new automated rail terminal at the port, which is set to start full operations in a few weeks.
Mr Tzaneros said the new charge is another heavy toll on truckers.
The Australian Competition and Consumer Commission said port operators saw revenue and profit margins rise for 2019-20, despite the global pandemic causing the largest contraction in container volumes in a decade, mainly because of the stevedores increasing their terminal access charges.
Revenue from the fees charged to transport firms rose by nearly 52 per cent compared to 2018-19.
ACCC chairman Rod Sims said the charges imposed by the port operators were “unconstrained”.
“Stevedores have managed to increase their profits, that’s got a fair bit to do with the transport charges they’re imposing, which have gone from not being there at all to mostly down the east coast being well over $100 a container,” he said.
Mr Sims thinks the rising costs are being passed on to consumers in the form of higher prices, although the ACCC has not done an inquiry.
Mr Tzarenos backed up this view, saying ACFS has been forced to pass on the higher charges to its customers, which include major importers and exporters.
Mr Sims said the ACCC has the power to monitor prices at the ports, but the industry is regulated by the states and territories.
“If action is going to be taken, it has to be by state governments,” he pointed out.
“We are in discussion with state governments on how to react to these ever increasing charges.”
Mr Jovicic would not be drawn on the possibility of greater regulation of port charges.
“In terms of any fee changes that we have, we engage with the relevant state departments and we’re transparent and we continue to co-operate,” he said.
Calls for Senate inquiry into ‘supply chain bullying’
The transport industry is calling for a Senate inquiry into the higher charges imposed by port operators.
The Transport Workers Union wants an independent inquiry set up to assess higher prices, and importers and exporters have also called on regulators to intervene.
Paul Zalai from the Freight and Trade Alliance said importers and exporters were feeling the heat because of an estimated $300 million in supply chain costs imposed by stevedores at all major sea freight container ports.
“We estimate that $1.2 billion is being paid by importers and exporters just on these new congestion surcharges charged by shipping lines, terminal access fees by the stevedores, and extra staging and booking fees at empty container parks,” he said.
The Patrick terminals boss said the port charges are needed for investment in infrastructure and maintenance.
But Michael Kaine, national secretary of the Transport Workers Union, said the rising costs have forced trucking companies to cut wages and lay off staff, putting safety on the roads at risk.
“This is really supply chain bullying,” he argued.
Mr Jovicic disputes that.
“That’s simply not true,” he responded.
“Our returns today are at historical lows,” he said.
The ACCC Container Stevedoring Monitoring Report for 2019-20 found that overall revenue for the industry rose to $1.4 billion, the highest in ten years, with revenue from shipping companies falling, but earnings rising from transport and other industries.
Of the $1.4 billion, stevedores earned $256 million from the unregulated terminal access fees.
Deputy Prime Minister and Federal Transport Minister Michael McCormack is not intervening in the cargo dispute for now, but said the government understands how frustrated Australian shippers and transport operators feel.
“We welcome the announcement from Australia’s state and territory infrastructure and transport ministers, which have endorsed a plan to develop voluntary national guidelines for applying stevedore infrastructure and access charges at Australia’s container ports,”
Mr McCormack told the ABC in a statement.
“The National Transport Commission, as the national land transport reform agency, will lead this work and will engage with industry and jurisdictions on developing the guideline.”