CE & Appliance Industry Backed By ACCC Over Rising Port Costs
CE distributors, retailers and major brands who have spent the last six months battling issues on the Australian waterfront have won support from the Australian Competition & Consumer Commission (ACCC) after it warned shipping lines not to “embed” congestion charges introduced in the wake of industrial action and congestion at Sydney container terminals.
The move by to try a gouge money out of CE and appliance shippers was introduced due to maritime working initiating a go slow and threatening strikes at Sydney terminals.
Controversial terminal access charges have seen Australia’s stevedores increase revenue and profit margins, off the back of the COVID-19 outbreak despite the largest volume drop in a decade, the category that delivered the most growth was consumer electronics and appliances resulting in revenue at JB Hi Fi, The Good Guys and Big W soaring.
The country’s four major terminal operators handled 7.57m ton during the financial year ending 30 June, down 4%, according to the Container stevedoring monitoring report 2019-20, published by the Australian Competition and Consumer Commission (ACCC).
ACCC chairman Rod Sims saying the charges should only be imposed if “justified and reasonable”.
It was also revealed that 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.The ACCC noted the stevedores at the three largest ports of Melbourne, Sydney and Brisbane now charged in excess of A$100 per full container and $300 for empty containers.
“Not only have charges increased each year, but higher landside revenues are now more than offsetting any fall in quayside revenues from shipping lines,” ACCC said, noting the greater competition from the introduction of third terminals in Brisbane, Sydney and Melbourne, had resulted in falling revenues from shipping lines for each lift.
Neil Chambers, director of the Container Transport Alliance Australia, said the ACCC “couldn’t be any clearer” in its concerns over the increasing terminal access charges.
“The issue of whether rampant stevedore charges should be regulated is a matter for state governments, yet to date, no state government has taken definitive action,” Mr Chambers said.
The ACCC report also said stevedores’ average labour productivity fell by 4%, with average truck turnaround times also deteriorating. Mr Chambers said higher charges with deteriorating service levels was “not a desirable trend.”
Analysts claim that the increase in port costs is pushing up cost of goods in store.