Price Increases For 2020 Warn National Watchdog
An increase to the cost of entering container terminals by 43% has the National Watchdog concerned prices may increase for consumers’ depending on the degree to which the cost can be passed on’.
As reported by the Australian Financial Review, DP World Australia will increase the cost of entrance to its Sydney container terminal from 1 January, charging truckers entering the Port Botany terminal an ‘access charge’ of $91 per container, an increase of $27.20.
DPWA’s general manager commercial, Sean Barrett has told customers the price increase is in continuation of its’ rebalancing of revenue recovery from waterside to landside’.
It comes following the Australian Competition and Consumer Commission’s annual review of the national stevedore industry, released on 6 November, which revealed the rapid growth of terminal infrastructure fees.
Since 2006 there had been a 36 per cent increase in the average capacity of container vessels calling at Australian ports.
While many would see this as a benefit of efficiency to Australian container ports, it has instead resulted in a ‘more equals less’ scenario where despite more cargo arriving on fewer ships, there is now less need for cranes to unload them.
This, in turn, reduces the landside revenue for Australian container ports, leading them to increase container charges.
While the ACCC is supportive of transparent cost recovery, it does consider the growing landside revenue base ‘worthy of consideration by policymakers’ with many sitting within state governments capable of regulating port infrastructure.
‘The impact of the infrastructure charges will be felt by either transport operators, cargo owners or consumers, depending on the degree to which the cost can be passed on’.
Unfortunately, ‘many of the key issues are beyond the scope of the ACCC’s monitoring mandate’, leaving regulation of ports and their stevedores to state governments.
An alliance between the Road Freight NSW, the Australian Trucking Association, Western Roads Federation and the Customs Brokers and Forwarders Council of Australia has complained about the increases in terminal infrastructure, warning of ‘unavoidable costs into national supply chains’.
While Australian consumers should be thankful the proposed price increase will not affect Christmas shopping; there is concern over the expectation of price increases rippling throughout the nation’s economy.