Patrick Terminals – Infrastructure Surcharges Announcement, July 2017

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Less than three months after the announcement of an Infrastructure Surcharges imposed on container transport operators by DP World, rival stevedore, Patrick Terminals, has announced increased Infrastructure Surcharges in Melbourne, Sydney, Brisbane and Fremantle from 10th July 2017.
The Patrick Surcharges will be as follows:
Sydney: $25.45 per container
Fremantle: $4.76 per container
Brisbane: $32.55 per container
Melbourne: $32 per container

The Infrastructure Surcharges will be applied to both road and rail transport operators for all full container movements, both import and export.

Patrick’s announcement is as per link:
In relation to these Infrastructure Surcharges, The Forwarding Industry is of the opinion that:
•    The relevant Infrastructure Surcharge will not result in a net public benefit
•    The VBS, being a mandatory and monopolistic arrangement for terminal vehicle access, is not the appropriate manner for any Infrastructure Surcharge cost recovery and its implementation
      through the VBS. Noting access to the VBS is by way of a commercial arrangement between transport operators and 1-Stop, and these contracts have individual and cumulative downstream
      effects on third party users
•    There is a lack of transparency as to the determination of cost and the rationale for the Infrastructure Surcharge

Take it or Leave it
The Various Transport Alliances believe additional stevedoring competition on the east coast of Australia has naturally led to highly competitive market negotiations for stevedoring contracts, and a commercial reluctance by the stevedores to negotiate higher prices with Shipping Lines to cover their rising costs of doing business.
Perversely though, it seems that this doesn’t faze Patrick or DP World, because they can offset these costs with impunity by imposing Surcharges on other parties in the chain who can’t push back.
Seemingly too, regulators such as the ACCC and governments have abandoned the container logistics sector and are allowing the market to bear, even though it is clear that the stevedores have unfettered power to impose these charges on a “take it or leave it” basis.
The latest announcements by Patrick has been brought to the further attention of the ACCC and asked them again to intervene.  Will the ACCC do so?  That is a matter for the Competition Watchdog, but if it doesn’t, it’s a clear sign that the system of cost recovery and revenue generation in the container logistics chain in Australia is broken.

What Needs to Change?
Service Level Agreements / Performance Measures:
The existing Carrier Access Arrangements have again been exposed during these last months as being wholly inadequate to underpin the relationship between the stevedores and transport operators into the future.
Transport Alliance companies will pursue dialogue with each stevedore to establish proper Service Level Agreements (SLAs), including agreed performance measures, and appropriate mechanisms to have a say in how the millions of dollars collected through these “taxes” are spent to improve landside container logistics efficiencies and productivity.

We will monitor any progress regarding these charges, but expect these will be implemented irrespective of any opposition raised.

Should there be any further information required, please do not hesitate to contact us.

1300 814 743


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