Patrick Terminals has advised its landside customers that the company will raised its infrastructure surcharges effective 12 March 2018.
Until recently, terminal operators Patrick and DP World collected their revenues from shipping lines, who had the (limited) opportunity to negotiate and take their business across the port to the other provider. Exporters and importers, however, must pick up their containers from the terminal where they are offloaded from the ship, effectively being held to ransom by the stevedores.
Patrick says it has completed a review of its Terminal Infrastructure Surcharges, which are said to be designed to recover a portion of the costs that relate to:
- The capital investments already made on dedicated infrastructure that services our landside interface operations.
- Excess charges over CPI that relate to our property and property related costs (including rent, land tax and council rates). These costs continue to increase considerably across Patrick’s terminals.
- Maintenance and operational costs associated with providing our landside interface operations.
“The surcharges recover a portion of the full costs associated with providing these essential landside operations, to continue to provide our customers with superior and efficient landside service levels,” Patrick’s advice states.
From 12 March 2018 the following infrastructure surcharges on full containers that enter and leave the terminals will apply:
- Sydney $41.10 per full container.
- Fremantle $7.50 per full container.
- Fisherman Islands $38.25 per full container.
- East Swanson Dock $47.50 per full container.
The infrastructure surcharge will be applied to both road and rail transport operators for all full container movements, both import and export, made at the terminals. Road operators will be invoiced electronically via 1-Stop, while rail operators will have the surcharge separately itemised on their rail invoice.
Patrick took the opportunity to “remind customers that ongoing access to the terminals is conditional upon prompt payment in accordance with Patrick’s standard terms and conditions” – i.e. no containers will be accepted or allowed to leave without payment. Patrick also advised other ancillary charges will be subject to an annual review with any price change to apply from 1 July 2018.
The shippers’ response
Director of the Freight & Trade Alliance (FTA) Paul Zalai said: “Effective 12 March, Patrick will increase its ‘Infrastructure Surcharge’ adding enormous costs to Australia’s international trade sector. If this is not bad enough, of much greater concern is that there appears to be no commercial mechanism or desire from any regulator to control pricing administered by our stevedores.
“Following the 2017 introduction of the Infrastructure Surcharge and a second increase by DP World earlier this year, it comes as no surprise that Patrick has again replicated the approach of its main competitor. While there is no suggestion of collusion between the stevedores, it appears to be another case of ‘follow the leader’ and an easy way to attract a significant quantum of income without affecting contracted shipping line customers.
“What a wonderful world to live in to be able to turn on the money tap whenever required.
“The Australian Peak Shippers Association (APSA) and Freight & Trade Alliance (FTA) have led the case to the Australian Competition and Consumer Commission (ACCC) requesting a formal investigation of the DP World and Patrick charging regime. We will now supply further evidence of our concerns and remain hopeful that our engagement next week with the ACCC chairman, Rod Sims, will give us clarity on a way forward to protect our sector from a spate of uncontrolled surcharges and unregulated price increases.”
The Container Transport Alliance (CTAA) is equally unimpressed:
“CTAA reiterates that the real reason for these increases is the stevedore ‘rates war’, and the ability of the stevedores in an unregulated market to shift their cost recovery to the landside stakeholders.
“The foreign shipping lines are laughing all the way to the bank because there has been no corresponding reduction in the charges they levy on shippers (importers / exporters / freight forwarders) for terminal handling.
“Foreign-owned shipping lines are financially benefiting from lower stevedoring rates charged by the stevedores, while maintaining high Terminal Handling Charges (THC), at the expense of Australia’s containerised supply chain competitiveness.
The CTAA has written to Commonwealth and state ministers expressing this concern and calling on them to investigate the relationship between:
- Stevedore and terminal rates to shipping lines.
- Terminal Handling Charges (THCs) applied by shipping lines to shippers.
- The implementation and quantum of the infrastructure surcharges levied by the stevedores on transport operators, which are consequently passed onto shippers.
“Meanwhile, CTAA believes that shippers (importers / exporters) need to take up the commercial fight to the shipping lines and seek reductions in THCs to account for the cost shifting that is occurring,” the CTAA statement said.
We will keep you posted.