ACCC warns shipping lines over port costs in wake of industrial action
The competition watchdog has warned shipping lines not to “embed” congestion charges introduced in the wake of industrial action at container terminals.
The competition watchdog has warned shipping lines not to “embed” congestion charges introduced in the wake of industrial action and congestion at container terminals, with ACCC chairman Rod Sims saying the charges should only be imposed if “justified and reasonable”.
The Australian Competition & Consumer Commission released its latest annual report on stevedoring and port charges on Wednesday, saying revenue and profits at stevedoring companies — dominated by Patrick and DP World — grew over the last financial year despite the impact of the coronavirus crisis.
Mr Sims again warned that access charges levied by stevedores posed a significant risk to importers, but said there was little the ACCC could do to intervene given the charges were regulated by state governments.
The report says port handling revenue grew at ports last financial year, despite a drop-off in container volumes, with revenue from terminal access charges — previously called infrastructure charges — up 51.9 per cent in the year to $256.4m. Mr Sims said the rising use of access charges to lift revenue by stevedores could undercut cost savings for importers from increased competition between service providers.
“Shipping lines contract with a single stevedore for cargo and that means there is no direct competition in the provision of landside services,” he said. “This makes these fees to some extent a ‘take it or leave it’ proposition for importers or exporters that have no direct choice of stevedore.”
The report shows stevedores’ total operating profit margins increased for the first time in a decade, from 5.8 per cent in 2018-19 to 9.9 per cent in 2019-20.
And Mr Sims warned shipping lines they should not look at so-called congestion charges as a long-term source of revenue.
Delays at ports were caused by industrial disputes and the fact that terminals used to store shipping containers at Melbourne and Sydney filled up amid coronavirus lockdowns that prevented merchants from taking possession of imported goods.
In face of the delays, some shipping lines have imposed $US350 congestions charges on containers moving into Sydney.
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