Victorian Government response
It was encouraging to note The Hon. Melissa Horne Minister for Ports and Freight (Victoria) shares our concerns as reported in The Age on 30 March 2020 titled 'Unacceptable': Minister slams DP World's plan to hike import fees saying "This decision is unacceptable," and "Especially at a time when everyone should be pulling together to keep freight moving."
Last week, FTA / APSA received advice from Praveen Reddy, Chief Executive Officer Freight Victoria, that we will receive a formal correspondence outlining the Victorian government's formal response.
NSW Government response
FTA/APSA received correspondence from Hon Andrew Constance MP Minister for Transport and Roads (NSW) on Friday 17 April 2020 highlighting the following: - the Minister is aware that the landside transport and import/export industries will face difficulties maintaining ongoing financial sustainability during the COVID-19 pandemic and that associated risks exist for supply chain bottlenecks;
- given the unprecedented situation posed by the COVID-19 pandemic and the crucial role of all parties involved in the supply chain in moving freight during this pandemic, it is the NSW Government's strong view that now is not the time to increase stevedore-imposed Terminal Access Charges;
- the Minister has written Port Botany stevedores, regarding concerns raised by FTA/APSA and others in the road freight industry calling for restraint in not increasing infrastructure access surcharge charges for at least the duration of the COVID-19 response; and
- in recognition that cash flow is a pain point raised by the road freight industry, the Minister has requested that Port Botany stevedores engage with Transport for NSW (TfNSW) and the road transport sector to find a solution to payment terms.
The full correspondence from Minister Constance is available HERE.
DPWA "test case"
Members will recall that Minister Constance launched a media release on 12 December 2019 headed Stevedores told to think twice about price hike in response to a 43% price increase at that time stating that stevedores must act responsibly and warned against "slapping higher port surcharges".
In a responding public statement, this warning was disregarded "DP World Australia is aware of comments made by the NSW Minister for Transport & Roads on Thursday 12 December. The circumstances requiring DPWA to announce the increase from 1 January 2020 have not changed. Consequently the announced increases will proceed as planned from 1 January 2020."
Precedent would suggest that DPWA will proceed as planned with their announcement from 27 March 2020 to vary its Terminal Access Charge at Port Botany effective 8 May 2020.
FTA / APSA ongoing advocacy
Assuming that DPWA proceed as planned, this may be the catalyst required to fast-track the long awaited implementation of regulation.
As outlined in our commentary published in the Australian Financial Review on 16 December 2019 DP World says port fee increases 'reasonable' in tough market, FTA / APSA will continue to put forward a position for use of state-based regulation in an aim to eradicate this stevedore charge to return to an arrangement of recovering costs from their commercial shipping line clients.
Since 5 November 2019, FTA / APSA has consistently put forward this position to Peter Achterstraat AM (NSW Productivity Commissioner) and his senior advisors. FTA/ APSA will again meet this week with TfNSW and the NSW Productivity Commission team and will be advocating for use of the below regulation to put a cap on any Terminal Access Charge increases and importantly, to wind back this unfair stevedore cost recovery practice.
Unlike other states that would require new legislative provisions for intervention, NSW has the regulation at their disposal via the Ports and Maritime Administration Act Schedule 4 that provides a broad sweeping power to allow the Minister to regulate these charges without limitation (extract below).
Supply chain charges
Regulating (or authorising the Minister to regulate) the charges (supply chain charges) that may be imposed for or in connection with the operation or provision of facilities or services of the port-related supply chain at a port or supply chain facility, including (without limitation):
(a) setting maximum supply chain charges, and
(b) regulating the manner in which supply chain charges are to be set or determined (for example, by providing for charges to be set by means of an auction or other market-based pricing mechanism), and
(c) specifying or otherwise determining the persons by whom supply chain charges are payable, and
(d) regulating the collection and recovery of supply chain charges, and
(e) prohibiting the imposition, collection or recovery of supply chain charges contrary to the regulations.
Our message to state governments is simple in what is shaping up to be an extended period of economic uncertainty "please no more reports, the issues are obvious and we now need decisive action".
FTA / APSA will continue the lead in advocating for reforms and will keep members informed of developments. |
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