Waterfront industrial turmoil raises construction costs

Qube chief Paul Digney. Illustration: Sturt Krygsman

Key sections of the building industry face higher costs and shipping delays due to a prolonged dispute between Qube and the MUA that is causing long delays for shippers on the east coast.

The dispute centres on break-bulk carriers that carry goods such as steel coils and cars loosely rather than in containers.

Delays in Brisbane have caused shippers to offload cargo in Newcastle then demand customers pay for the cost of getting the steel up to Brisbane, which works out at about $100 a tonne.

Ships waiting to dock cost about $US15,000 ($23,000) a day, and shippers report having to wait 10 days to unload cargo compared to normal operations, when they are in and out in three days.

The ports affected so far since August are from Adelaide through to Brisbane, but MUA members in five West Australian sites on Thursday voted overwhelmingly to join the protected industrial action, which will hit ports from Bunbury up to Port Hedland, the centre for Pilbara iron ore exports, and Dampier.

The MUA complains that Qube chief Paul Digney has refused to negotiate and instead is running the dispute up to the nine-month trigger when it automatically goes to the Fair Work Commission.

Under the rules on intractable bargaining, if the two sides are at loggerheads for nine months it triggers FWC arbitration.

Ironically, neither side on past performance has reason to welcome an FWC appearance.

The dispute comes as Digney is also facing an uphill battle to get ACCC approval for his proposed takeover of Wallenius Wilhelmsen’s Melbourne roll-on, roll-off car import operation, MIRRAT.

A final decision is due on ­December 12, with the ACCC poised to block the deal.

The MUA is seeking changes to work arrangements in which workers doing the same job in Newcastle earn more 13 per cent less than workers in Fremantle.

They also want more notice on shift changes, with workers having to wait until late the day before to learn what hours they are required and when, along with other requests such as increased superannuation.

The union says wages were originally based on “historic shipping patterns” and based on seven-hour shifts in the original salary calculations. For the most part, these were implemented in or around 1999, after the Patrick dispute.

“The historic work patterns no longer exist, with everyone working as they are allocated and we are now working many 12-hour shifts which were not calculated into the ‘historic’ wage calculations,” the union says.

The company says: “Far from trying to drag negotiations out, Qube has had a generous wage offer on the table as far back as July. It would see stevedores, who are already paid 143 per cent above the award, lock in pay rises of 5 per cent in each of the first two years of new agreements and 4 per cent for each of the two years after that.

“The union unilaterally rejected that offer and negotiations have gone nowhere because the CFMEU refuses to negotiate on their long list of claims that would more than double Qube Ports’ ­operating costs.”

The deadlock is getting more worrying by the day for downstream users such as the steel ­industry. Increased costs for steel means increased building costs and by definition inflation.

The shipping dispute has stayed below the radar and there was nary a mention of it at Qube’s recent annual meeting, at which it celebrated a 13 per cent lift in earnings to $271.2m on a 17 per cent rise in revenues to $3.5bn and near unanimous shareholder backing on all resolutions.

ACCC’s merger rush

The federal government managed to get changes to the merger regime and, separately, the food industry code through the Senate this week. The latter is largely window dressing.

Now the fun starts for Tom Leuner’s merger team at the ACCC that from the middle of next year will be deluged with ­applications under the mandatory notification rule.

The ACCC figures there are about 1500 mergers a year, of which it looks at 330, most of which are cleared without question. To cope with the new regime, the regulator will add another 81 people to the 65-strong division, more than doubling its size, but opinion among the merger mafia (lawyers and economists) is divided on whether the commission will handle the workload.

There will be a six-month trial from mid-year before the law comes into place in January 2026 and the ACCC figures it will now be looking at anywhere between 300 and 500 mergers a year.

At least in the early stages the number will be at the top end of that range, and then you get to questions of definition – if property acquired in the normal course of business is technically a merger.

Lawyers won’t want to run risks so will err on the side of putting everything to the ACCC, even if it doesn’t quite meet the threshold.

The ACCC will have waiver powers, so can adjust the rules to meet demands.

ACCC staff by birth tend to be suspicious, believe everyone outside is trying to game the system and above all questioning, and this mindset may have to change to clear the backlog.

Question then whether the ACCC may drop the ball and let some dodgy deals through.

The original plan was to ensure the ACCC would see the mergers that matter, but the thresholds set are too low, which means at least initially too many deals will go before the commission.

The mafia also will be run off its feet, but then lawyers always do well with change.

Takeoff for Qatar deal

The ACCC has decided to grant Qatar interim authorisation for its Virgin Australia wet lease and ­equity deals on Wednesday but left it until Friday, after parliament rose, to unveil the move.

This minimises the political fallout from the fact the ACCC is effectively overturning the government’s rejection last year of Qatar’s request for increased flights.

The ACCC thinks the deal will increase competition by giving Qatar more access. Prime Minister Anthony Albanese presumably didn’t think competition and potentially lower prices mattered.

Votes in grocery code

The grocery code changes fall into the category of unnecessary regulation inspired by politicians wanting to show they are doing something about supermarkets.

The code governs relations between big supermarkets and little suppliers who were bullied by the behemoths.

The idea was to settle disputes on the run, so the little supplier received a fair deal without jeopardising its commercial relationship with the retailer and without long legal disputes.

It was voluntary to join, but once in the code you were bound by the rules so the big guys joined, and with a $5bn turnover threshold Costco will be next to be mandated.

The suppliers did not clamour for changes and the supermarkets clearly didn’t, so it seems the only people who wanted it were grandstanding politicians and the regulator, the ACCC.

It gets more powers and better unit pricing rules, but will consumers win from a more legalistic code governing dealings between suppliers and the behemoths?