Shipping delays growing in Sydney, Perth, as dockers seek pay rise

Container costs have almost tripled and delays are growing at two of Australia’s key ports as overseas demand runs up against an industrial fight.

Patrick Terminals said delays at its terminals were coming as a result of industrial action from the Maritime Union of Australia. Picture: AFP

Container costs have almost tripled and delays are growing at two of Australia’s key ports as overseas demand runs up against an industrial fight between union and business.

Key ports operator Patrick Terminals said delays in its Sydney port had now blown out to 3½ days, while Fremantle in Western Australia was also experiencing a two-day delay.

Freight watchers are pointing to the delays as just the start and expect them to worsen in a move that will pinch already struggling supply chains.

Patrick Terminals said delays at its terminals were coming as a result of industrial action from the Maritime Union of Australia.

The port operator has been locked in formal pay rise negotiations with the union since February last year.

Patrick Terminals CEO Michael Jovicic said the union’s action had caused the delays.

“The follow-on effect of any delays, in an already tight shipping market, will ultimately be seen at the supermarket shelf and retail store level,” he said.

“At this stage, industrial action is expected to continue across the month of June.

“We call on the MUA officials to stop disrupting the supply chain and come back to the negotiating table to reach a sensible agreement.”

However, the union knocked back Mr Jovicic’s suggestion, with MUA national assistant secretary Jamie Newlyn saying the freight operator was engaged in a “hostile and clumsy attempt at blame shifting”.

“The Patrick’s workforce are currently undertaking legally protected industrial action to get their employer back to the negotiating table.

“Patrick’s crocodile tears about shortages and disruptions are pathetic, given the company will not settle with their workforce despite asserting the parties are close,” Mr Newlyn said.

Workers prepare to load containers on a cargo ship at the Port Botany in Sydney. Picture: AFP

Global shipping has been hammered by delays in recent months as the Covid-19 pandemic has played havoc with ship work­forces and shopper appetites.

Australia is also grappling with a long-term imbalance to its ­shipping, which sees more full containers come into the country than empty containers leave.

International Forwarders & Customs Brokers Association of Australia said delays in shipping were coming from all fronts, with work stoppages coming on top of rising demand.

IFCBAA CEO Paul Damkjaer said both sides were blaming each other for shipping delays.

“The only people who are paying for this at the end of the day are the Australian consumers,” he said.

“Because of the supply and demand, the freight rates have tripled.”

Mr Damkjaer said the delays were proving problematic for Australian exports, with costs blowing out alongside delays.

“I was speaking to a member last week. He was paying $6000 for a container, now he’s paying $14,000,” he said.

“He can’t get containers because they’re shipping all the empty ones out.”

Mr Damkjaer said Sydney was the worst port for delays in shipping, but noted timelines were now starting to worsen in Melbourne.

“It comes in waves, it gets a bit better, you have some hope, and then, bang, it starts up again,” he said.

But Mr Damkjaer said the long-term consequences of delays in the major ports would be a flow of traffic to smaller regional ports.

“The Port of Newcastle, they’re fighting to attract containers and this could well attract it up there,” he said

“There are no delays up there,” Mr Damkjaer added.