Lifting productivity at our container ports could save business and consumers $605 million each year. Reform could achieve consistent, high performance, according to a draft report released by the Productivity Commission today.
Importers, exporters and trucking companies are having to pay unfair charges because container terminal operators do not compete for trucking companies’ business.
The report finds that workplace arrangements in our container ports lower productivity. Earlier intervention by the umpire – the Fair Work Commission – could help resolve protracted disputes about workplace arrangements.
“Australia’s major container ports underperform their ‘best practice’ peers overseas”, said Commissioner Stephen King. “Underperformance on Australia’s ports directly costs business and consumers. Any sustained disruptions to imports or exports magnify these costs across the economy because of the critical role of ports to trade and commerce”.
According to the draft report, poor container port performance is reflected in a number of factors. “For example, terminal operators’ performance in handling containers is highly variable”, said Commissioner King. “Simply achieving world average ship turnaround times would deliver significant benefits”.
“Use of market power is a problem”, noted Commissioner King. “Truck drivers have to pay whatever price the terminal operator demands to pick up or drop off a container. The shipping lines choose the terminals so they should pay these charges”.
“Transport operators and cargo owners have to pay fees to shipping lines when they return containers late because empty container parks, which they are directed to, are full. This doesn’t seem like fair conduct”, said Commissioner Julie Abramson. “Australian consumer law exempts these contracts and this should be remedied”.
“Workplace arrangements at container terminals are holding back productivity”, said Commissioner Abramson. “Highly restrictive clauses in terminal operators’ enterprise agreements limit the ways that workers and equipment can be deployed”.
“Changes to the Fair Work Act and operation of the Fair Work Commission are recommended to tackle protracted enterprise bargaining in container ports and the disruptive industrial action that comes with it”, said Commissioner Abramson.
Commissioner King noted that “planning to make sure that Australia’s ports can handle bigger ships and growing container freight volumes in coming decades is well underway. And Australia’s container ports are broadly in line with international practice when it comes to technology adoption”.
The draft report, Lifting productivity at Australia’s container ports: between water, wharf and warehouse, is being released for comments and further submissions from interested stakeholders. The report can be found at www.pc.gov.au
