CTAA - ACCC 2019-20 Container Stevedoring Monitoring Report

ACCC 2019-20 Container Stevedoring Monitoring Report The ACCC has released its much anticipated 2019-20 Container Stevedore Monitoring Report, and there are no surprises: Stevedore revenues are up significantly from Terminal Access Charges (TACs) levied on road & rail transport operators.   Stevedores' total revenues at monitored ports increased by $38.9 million, or 2.8 per cent, despite a significant drop in container volumes.   Terminal Access Charges (TACs) on aggregate have increased by $87.6 million, or 51.9 per cent, since 2018–19. ACCC Can't Be Any Clearer: It's hardly possible for the ACCC to be any clearer that they are "concerned that the benefits of greater competition between stevedores to provide services to shipping lines will be eroded by increasing TACs", but that "any regulation of these charges is a matter for state and territory governments." These ACCC comments fly in the face of commentary from some industry organisations who are focusing their advocacy efforts on trying to get the Federal Government to intervene ... that is highly unlikely to occur, and perhaps such commentary gives false hope to many. The issue of whether rampant stevedore TACs should be regulated in some way or otherwise controlled is squarely a matter for State Governments.  Yet, to date, no State Government has taken definitive action. Foreign Shipping Lines Benefit - Exporters & Importers Pay Twice: The graphs above extracted from the ACCC Report are telling. The average "per lift revenue" collected by stevedores from shipping lines for contracted vessel loading and unloading services (quayside revenue) has reduced by almost 28% in the decade between 2010-11 and 2019-20 (from an average of $262 per container lift to $189.10 per lift). In turn these charges, and other port related fees, are recovered by shipping lines from exporters and importers including through Terminal Handling Charges (THCs). Terminal Handling Charges (THCs) are effectively charges collected by shipping lines to recover from the shippers the cost of paying the container terminals for the loading or unloading of the containers and other related costs borne by the shipping lines at the port of shipment or destination. The question has to be asked, have importers or exporters witnessed any of these savings being enjoyed by foreign container shipping lines being passed through in the form of lower THCs in Australia?  The answer is no. THCs in Australia charged by shipping lines to importers and exporters can range from over $400 for a 20' dry container to over $800 for a 40' reefer container.  And, they have been going up, not down. In contrast, average revenue collected by the stevedores from transport operators for landside services has risen by 266% in the decade from 2010-11 to 2019-20.  The ACCC Report notes that in the last year, "TACs on aggregate have increased by $87.6 million, or 51.9 per cent, since 2018–19."  So, exporters and importers and effectively paying twice for the same stevedore terminal services: Once through high (and increasing) THCs paid directly to shipping lines (who have not passed on any of their cost savings); and   Again when the Terminal Access Charges (TACs) are passed through to exporters and importers by their transport providers. The ACCC Report shows that on average the stevedores' return on tangible assets has increased from 3.8% to 7.6%, while their profit margin (on average) has increased from 5.8% to 9.9%, largely off the back of significant increases in revenue collected through their TACs.  While increasing their profit margins, the ACCC reports that the stevedores' average labour productivity fell by 4% and average truck turnaround times deteriorated. Higher charges - worse average service levels.  Not a desirable trend.     Download the ACCC 2019-20 Container Stevedore Monitoring Report - Click Here Servicing a Strong Alliance