Monday, June 28, 2021
Port Botany faces gridlock with exporters being the sacrificial pawns in calamitous negotiations between Patrick and unions.

During the last quarter of 2020, escalated industrial action faced by all three stevedores responsible for loading and unloading container vessels had crippling effects on the international trade sector resulting in many vessels by-passing Port Botany. 

As well as resulting in additional time and cost to move imported goods back across state borders, the events left commerce scrambling for supplies and our regional producers with the dilemma on how to reach overseas markets with limited shipping services.

Rather than seeking compensation on contracted stevedores for failing to meet service requirements, salt was rubbed into the wounds of exporters and importers who paid an estimated $330 million in congestion surcharges to recover vessel operational costs. This resulted in significantly diminished returns for manufacturers, farmers and regional communities whilst contributing to record high, multi-billion dollar profits by several foreign owned shipping lines. 

The impasse between stevedores and workers was broken with separate 11th hour deliberations before the full Fair Work Commission (FWC) hearings resulting in both Patrick and DP World agreeing to continue out of court negotiations with the Maritime Union of Australia (MUA).

DP World subsequently successfully implemented an Enterprise Agreement with their employees. While Hutchison has experienced periods of ongoing industrial action, they have more recently reported that they too are close to resolution.  

Unfortunately, unlike their competitors, Patrick and the MUA still have unresolved matters causing major disruption, noting their critically important operation handles more than 40% of overall containerised trade volume via Port Botany. 

Over recent weeks the MUA re-instigated a series Protected Industrial Action (PIA) restrictions in what appears to have been designed to cause enough pain to Patrick to force their position in negotiations without taking extreme industrial action measures that would see the parties straight back to the FWC.  

In a formal notice to rail operators accessing Port Botany, Patrick executive stated that they written to the MUA seeking an exception of certain roles from the industrial action within the rail operations to enable trains to access/ingress the terminal during the period of disruption.

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) note that Patrick has made the unilateral decision to cancel a significant proportion of rail windows from 24 June to 15 July 2021This action, conducted without any consultation with exporters, will have devastating economic impacts on the New South Wales economy. We remain uncertain how much suffering is required before this action can be the pre-requisite trigger required to again take proceedings before the commission.

The immediate result will mean that regional exporters reliant on rail to move goods to the port will again face additional logistics costs. Rail operators will be forced to terminate their journey at Sydney intermodal terminals with secondary road movements to be made to the port.  
Thadditional cost is one factor, however a critical concern for the entire import and export supply-chain is that with a bumper season for the agriculture sector, container volumes will quickly mount at these transition points with the intermodals and empty container parks likely to very quickly become heavily congested.

Despite constructive engagement with NSW government and port representatives there are no obvious, workable contingency measures in an environment whereby Patrick are maintaining their position of cancelled rail windows. We are now seeking an urgent meeting with Patrick executives, but we do not expect that they will deviate away from their position, nor are we confident that that they and the MUA are likely to settle their differences after what has been an extensive and prolonged negotiation.  

In line with key recommendations in our formal submission to the Productivity Commission's Inquiry into Vulnerable Supply Chains, FTA and APSA are escalating advocacy to the Attorney General for immediate FWC intervention and for the Federal Government to initiate a broader review on waterfront industrial relations.

Paul Zalai - Director FTA | Secretariat APSA | Director GSF