PATRICK FORGE AHEAD WITH TERMINAL ACCESS CHARGE INCREASES

NATIONAL VOLUNTARY ARRANGEMENTS

As determined by State Ministers at the Infrastructure and Transport Ministers meeting held on 20 November 2020, the National Transport Commission (NTC) was tasked to lead reform on 'voluntary national guidelines' to apply to stevedore infrastructure and Terminal Access Charges (both their introduction and increase) at Australia's container ports.

Fourteen (14) months later and we are still awaiting outcomes from the NTC, with ongoing events fuelling our scepticism as to whether a 'voluntary' arrangement will adequately protect the interest of the international trade sector, adding resolve to our advocacy that regulation is required to wind back and eradicate TACs, leaving market forces to determine price and service between commercially contracted entities.

VICTORIAN VPPM

During the last twelve (12) months, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have written to each container stevedore operating at the Port of Melbourne in line with the Voluntary Port Performance Model (VPPM).

On each occasion when DP World, Victorian International Container Terminal (VICT) and Patrick have announced TAC increases, prescriptive detail has been sought as to whether increases are a measure to offset a further a reduction in quayside rates to the stevedore's commercial client shipping lines and / or necessitated by other specific operational factors.

In the absence of any commercial ability to influence the quantum of the TAC (being a 'take it or leave it' proposition as referenced by the ACCC) and in line with the intent of the VPPM, FTA / APSA also requested a further detailed explanation for the increases including disclosure, supporting information and data justifying the full cost structure of the total fees.  

While constructive meetings were subsequently held with stevedore executives, follow up correspondence did not provide the specific data requested, instead provided a general commentary with a broad reference to activities and capital expenses.

Response from Patrick (28 January 2022) is available HERE

SEEKING MINISTERIAL INTERVENTION

Yesterday (1 February 2022), FTA / APSA again wrote to The Hon. Melissa Horne (Victorian Minister for Ports and Freight) expressing serious concerns that the VPPM or any similar voluntary monitoring process will mean that stevedores will continue to receive revenue from the transport sector with the minor inconvenience in the form of another level of bureaucracy before implementing each increase.

FTA/ APSA also specifically referenced formal correspondence received from the minister on 23 April 2020, at a time when the VPPM concept was in its infancy, stating:
 
"In January 2020, when I released the summary of our Port Pricing and Access Review to stakeholders, I advised stakeholders that the Victorian Government was not intending to move towards heavy-handed regulation, but would instead work towards establishing a new Voluntary Port Performance Model for the Port of Melbourne in partnership with all port users. I also said that if voluntary standards didn't improve pricing transparency, it was open to the Victorian Government to consider mandatory standards."

Continuation of such voluntary performance arrangements poses the significant risk of giving tacit approval to this unwarranted cost recovery method on third parties. Furthermore, this matter is not confined to stevedores. Empty container parks, also contracted by shipping lines, and now LCL Depots are also continuing to significantly increase their charges on transport operators.

Aligned to our ongoing discussions, we have tested and proven the futile nature of a voluntary approach. FTA / APSA has again urged the minister, ideally in partnership with other state ministers, to move towards regulation to force stevedores to cost recover directly against their commercial client (shipping line).

FTA / APSA correspondence to Minister Horne (1 February 2022) is available HERE

A consolidated list of national stevedore TAC's is available HERE 
(FTA/APSA LOGIN REQUIRED).

ONGOING ADVOCACY

In parallel to our ongoing advocacy with the Victorian government, FTA/ APSA will feature this matter in our upcoming submission to the Productivity Commission's review into Australia's maritime logistics system, reinforcing now more than ever, it is time for those in government to act to protect our vulnerable supply chains.

Paul Zalai - Director FTA | Secretariat APSA | Director GSF