New Terminal Lease Arrangements in Fremantle

As outlined in an earlier Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) notice, advice has been received confirming the signing of new terminal leases between Fremantle Ports and Patrick Terminals / DP World Australia.

Associated statements from all parties indicated they were pleased with the agreements that provided certainty to the stevedores on property costs that will allow them to invest in infrastructure upgrades and the like.
 
Unfortunately, the same degree of "certainty" has not been afforded to importers, exporters and freight forwarders on the matter of infrastructure charges / terminal access fees.
 
Whilst the statements indicate that an "agreed structure on infrastructure charges" has formed part of the new lease arrangements and that "This will provide much improved commercial certainty for shippers and the container industry", industry are still none the wiser as to the following:

• Timing of any increases – annually or at the stevedores discretion
• Amount of increases – either dollar or percentage terms
• Is there a cap on increases – eg; a percentage or limited to CPI
• Will increases be off the current base or will that be allowed to jump on the initial change

Exporters, in general, negotiate long term contacts for the supply of agricultural products and the like, so any change to pricing during the term of the contract can have a devastating impact on their bottom line.
 
FTA / APSA have reached out to the signatories to these arrangements and have been advised that the arrangements as to infrastructure charges are 'commercial in confidence" and that more granular details of the arrangements could not be released.
 
Members are again being left in the dark and will be subject to unknown increased costs at any time.
 
FTA / APSA had initially expressed to all parties that the development was a "good news" story given that Fremantle Ports (and the state government) have been the only port in Australia to seek to negotiate such arrangements.
 
The Victorian Port Pricing Model (VPPM) whilst alluding to be a model to oversee the timing and quantum of increases has to date provided little confidence to industry that it will control / temper the consistent jumps in charges and merely be another step parties need to negotiate to obtain a "rubber stamp".
 
In parallel to our ongoing advocacy with the National Transport Commission (our formal submission is available HERE), FTA / APSA will continue to ask the questions of the stevedores, Fremantle Ports and the state government to release the above requested details so that "certainty' can be provided to all.