ACCC CONTAINER STEVEDORING REPORT 2021 -22
Terminal Access Charges (TACs) are one of several charges administered by stevedores on the 'landside' in parallel to stevedores charging their commercial client (international shipping lines) on 'quayside'.
Page 36 of the Australian Competition and Consumer Commission (ACCC) Container Stevedoring Report 2021 -22 (December 2022) highlights that the balance of quayside and landside revenues has changed over time with shipping lines being the clear beneficiaries.
"In the first 10 years of the ACCC's monitoring, stevedores recovered an average of 87% of their revenue through quayside charges to shipping lines. By 2021-22, this had fallen to 59%, with the incumbent stevedores recovering 41% of their revenue through landside charges to transport operators."
Whilst it is true TACs are published rates, there is no absolute transparency in terms of the stevedore costs being recovered with transport operators having no ability to influence price. In effect transport operators are 'price takers'. Furthermore, page 37 of the most recent ACCC stevedoring report highlights the effects of this current charging regime.
"Increasing landside charges, in addition to steady quayside charges appears to have been a key factor in stevedores profits increasing significantly over the past few years".
As highlight in the above referenced Patrick correspondence to FTA and in their supplementary submissions to the Productivity Commission, it is true that most transport operators recover TACs from their customers. By the time the exporter or importer receives these already high cost TACs, it is generally further inflated with cascading charges administered by supply chain entities to recover administration and cash flow requirements.
As members will recall, our formal submission to the Productivity Commission (refer Section 4) summarises a consistent position that we have advocated to both state and federal governments over many years.
"All businesses face a dilemma of how to deal with unavoidable costs such as rent, infrastructure, labour and power. Those same businesses are then forced to either absorb these costs or pass them on to their commercial clients. Similarly, stevedores and empty container parks should be forced to either absorb operating costs or pass these on to their commercial client (shipping lines). Shipping lines then have the choice to absorb or pass those costs onto exporters, importers and freight forwarders through negotiated freight rates and associated charges."
We have also commended the Productivity Commission in supporting our position in their September 2022 draft report Lifting productivity at Australia's container ports: between water, wharf and warehouse (refer Draft recommendation 6.2):
"Terminal access charges and other fixed fees for delivering or collecting a container from a terminal should be regulated so that they can only be charged to shipping lines and not to transport operators".
FTA will continue its close liaison with the Productivity Commission in the coming weeks and will be escalating its engagement with key stakeholders in Canberra during the first quarter 2023 focussing on necessary legislative change to deliver fairer operational conditions for the international trade sector and to assist in Australia's broader economic recovery.
Paul Zalai - Director FTA | Secretariat APSA | Director GSF
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