FORMAL submissions calling for the scrapping of stevedore infrastructure surcharges have been lodged with federal authorities by the Freight and Trade Alliance and affiliated Australian Peak Shippers Association.
The FTA recently lodged a submission to the Standing Committee on Foreign Affairs, Defence and Trade Inquiry into the COVID-19 pandemic, noting an estimated $300m in costs imposed by stevedores at container ports were compounding the effects of drought, bushfires and pandemic.
“The current economic crisis has not slowed this trend with DP World adjusting their east coast fees,” FTA director and spokesman Paul Zalai said.
Mr Zalai noted that during May 2020; Hutchison (Brisbane) increasing fees by a staggering amount ($50 to $94.78 per container effective 27 July); and Victoria International Container Terminal extending their lead with the most expensive national charge ($131.03 per container effective 1 August 2020).
“In contrast, transport operators (road and rail) are held at ransom, forced to pay an infrastructure surcharge to collect and deliver containers with no ability to negotiate price or service,” he said.
Mr Zalai said many transport operators included administration fees to manage cash flow associated with these charges resulting in cascading costs flowing through the supply chain, with Australian exporters and importers pay further inflated prices.
He said warnings by state governments were being ignored, particularly during the pandemic, with the Voluntary Port of Melbourne Performance Model proposed by the Victorian government risking being “a futile and flawed concept”.
“If the VICT response is any indication, stevedores will continue forging ahead by using Infrastructure surcharges as their ‘money tap’, a convenient means of recovering operating costs and returning profits,” he said.
Mr Zalai said regulators needed to protect shippers by forcing stevedores to end this practice, while also allowing market forces to bring about change between shipping lines and stevedores.
“Stevedores should be given appropriate notice to allow negotiations of charges with shipping lines,” he said.
“This outcome would allow market forces to take effect. An open and competitive environment will determine appropriate price for services without the need for further government monitoring or intervention.”