Stevedore VBS fee increases from 1 January 2025 - FTA & APSA escalate advocacy for reform

Australian exporters and importers are facing increased international supply chain costs including a spate of surcharges and high freight rates imposed by foreign owned shipping.

Rubbing salt into the wounds, contracted parties to shipping lines controlling containers on Australian shores continue to ramp up their 'ransom' charges forcing transport operators to pay spiralling Vehicle Booking System (VBS) charges with no ability to influence service or price.

CHARGES EFFECTIVE 1 JANUARY 2025

Under the changes announced last month by Victorian ports minister Melissa Horne container stevedores responsible for loading and unloading vessels within the Port of Melbourne agreed to confine infrastructure/access price and other changes to a single date and adopt a single submission template to provide a greater granular level of data.

Last week Patrick, DP World and VICT complied with this requirement giving 60 days' notice for their increased charges commencing 1 January 2025. Furthermore, Patrick and DP World who operate stevedore operations nationally, also announced their increases in Brisbane, Port Botany and Fremantle.

Patrick - increases see Terminal Access Charges (TACs) up 9.5% (Imports SYD/MEL), 3.5% (Exports SYD/MEL), 21.01% (Imports BNE), 7.02% (Exports SYD/MEL), 5% (Imports FRE), 5% (Exports FRE), and the VBS and related ancillary fees up anywhere from 0% to 7.77%.
 
DP World Australia - Terminal Access Charges (TACs) up 5% in Fremantle, and just below 10% elsewhere.   All other VBS and ancillary charges up approx. 10% to 25%.
 
VICT - Terminal Access Charge (TAC - known in the VICT tariff as an Infrastructure Charge) up 4.18%, and the VBS-related and other ancillaries up anywhere from 0% to 20%.

VOLUNTARY CODE

Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) note consecutive Australian Competition and Consumer Commission (ACCC) stevedore monitoring reports that show stevedore quayside revenue is declining while landside revenue is significantly increasing. This model allows stevedores to recover costs and make healthy profits without having to negotiate price increases with their commercial client (shipping lines). Instead, they can simply impose charges on transport operators that have zero ability to influence service or price.
   
While there is no evidence of collusion amongst the stevedores, history has shown that they conveniently take turns to ramp up prices in a 'follow the leader' model. The new Victorian protocols at least force the stevedores to play their cards at the same time for a 1 January annual increase.

MANDATORY CODE

FTA and APSA are of the view that the Victorian government should have gone one step further in line with the Productivity Commission's review of Australia's Maritime Logistics System released in December 2022 that includes a recommendation for a Mandatory Protocol – under this regime, if stevedores fail to justify an increase after opening their books, they are declined an opportunity to increase VBS fees until the following year.

It is therefore no wonder the stevedores are embracing the Victorian government proposal in order to avoid the additional scrutiny recommended by the Productivity Commission and to be under tighter control from our national competition regulator.

STEVEDORES

In a formal submission to the recent Rural and Regional Affairs and Transport Legislation Committee, the FTA and APSA joint submission revealed that exporters and importers paid 1.36 billion in Terminal Access Charges (TACs) over the last three years; in the last calendar year alone, $505 million.

EMPTY CONTAINER PARKS

As members are well aware, the cost impost does not end there noting the other key contracted party to shipping lines are empty container parks that receive containers after being unpacked by importers and makes these available to exporters to reach overseas markets.   

Empty container parks play a vital role in the supply chain but appear to be charging negligible fees to retain and win shipping line contracts. FTA and APSA have been privy to a rate card whereby they charge as little as 30 cents a day to store containers on prime land. No wonder they too have followed the stevedore model and now charge an incontestable fee to transport operators to remain commercially viable.

SHIPPING LINES ARE THE WINNERS

Australian exporters and importers end up paying twice for the same landside service; once by stevedore and empty container park VBS charges, and again via shipping line-imposed Terminal Handling Charges. Yet another financial windfall adding to shipping line revenue while their key supplier costs plummet leaving Australian traders, regional communities and the general public picking up the bill of rapidly increasing supply chain costs.    

NEED FOR REFORM

In anticipation of last week's announcement, FTA and APSA understand that the ACCC has delayed the release of their next stevedore monitoring report, now due next month. The findings from this report, combined with evidence collated by FTA and APSA, will be important in our advocacy for reform in the lead up to a 2025 federal election.

Paul Zalai - Director FTA / Secretariat APSA