Sydney Wharf Stevedores – Guilty of Gouging?

Early September has always been the “traditional” start of the peak import season for Australia. Normally, import cargo volumes start to increase slowly from the beginning of September until they reach their full peak around early to mid-October, then they tail away back to more normal levels.

This year, however, things are different – at least in Sydney, anyway. Cargo volumes through Sydney’s major working port area for containerised cargo, Port Botany, have been steadily increasing for some years. This is a reflection of the strength of the Australian economy as it pertains to international trade. However, it seems the two main wharf stevedores, DP World and Patricks (now owned by Toll Holdings), have been a bit caught out. We are already seeing major delays for trucks trying to access the port to move containers, and the stevedores are bleating about how hard done by they are as they struggle to cope with the demand. I don’t have any sympathy for the stevedores as they’ve brought this situation on themselves through their own greed, but more of that later.

Following are extracts from some press releases by various participants on the waterfront. Hopefully these will give readers a better picture of the problems on the Sydney waterfront at the moment.

1. From the general manager of the Patrick Ports operations:

“There has been major congestion at Patricks Terminal over the past few weeks that has resulted in average times of 4-6 hours to conduct receivals and exports of containers. The problems are causing a “domino” effect with difficulty obtaining slot bookings and turn around times to the wharf increased dramatically. Along with all transport companies we are doing our utmost to keep all charges to a minimum but there will obviously be detentions that are above normal and possibly overtime charges incurred to try and prevent containers going into storage.

Below is a media release that helps explain the situation.

If you would like to discuss this further please call me anytime.
Bruce Gunter
General Manager

Patrick throwing everything at Port Botany congestion

Patrick’s Port Botany terminal manager David Phillips said the stevedore was “throwing everything” it could at relieving congestion caused by an unprecedented build up of import containers this week.

Patrick is training 60 new staff to drive straddles at the terminal, many having been transferred from Darling Harbour, which is due to close soon.

Mr Phillips said this morning (Friday, August 31) that volumes at the Port Botany terminal had not decreased since the Christmas peak.

“There is an unforeseen increase in volume that has not dropped off since September last year,” Mr Phillips said.

“This week and its problems are a direct result of a very busy shipping schedule, but primarily the build up of imports through lack of deliveries over the weekend.”

Mr Phillips said there had been very few take-ups of weekend slots, causing high stack densities at the terminal which was slowing the time it took to retrieve the boxes for each truck pick-up.

“We’re throwing everything at it, we really are,” Mr Phillips said.

“To handle that sort of volume, without stopping, you cannot predict that kind of increase.

“We’re seeing a peak in operation that’s extreme.”

Mr Phillips said Patrick had also temporarily extended the amount of time import containers would remain at the terminal before importers were charged storage fees.

Patrick is adding two new straddles next week and another three in the first few weeks of September.

The stevedore has closed its shipping operations three times so far this week in order to divert resources toward clearing containers from the docks.

Patrick and the Customs Brokers and Forwarders Council of Australia are encouraging the use of extra slots this weekend and particularly over the APEC long weekend starting September 7.

Mr Phillips said Patrick was not counting the Friday public holiday in Sydney as a free day.”

2. From DP World:

“Due to the low number of time slots booked for Friday 07/09 (170 imports) and Saturday 08/09 (60 imports) and the high number of import containers due in over the next few days and already on the ground at the terminal, an estimated 5000+ import containers will be on the ground come Monday morning.

We will be making available additional slots next week to help move these containers, however this will test the terminal’s roadside operational capacity. We are therefore anticipating higher than normal truck turn times from Monday 10/09 and continuing the rest of the week.

We encourage all transport operators to make use of the available timeslots on Friday and Saturday to reduce the number of containers in the terminal early next week and the demand for import timeslots.”

3. From a transport company:

“I think the crazy Christmas rush has come early. As most of you know we have experienced extensive delays at Patricks for the past three weeks due to the high volumes of containers. Looking at next week it is going to be even worse. Both terminals are going to be extremely busy and we are expecting slow turnaround times as well as a shortage of timeslots.

We have been forced to work Friday due to the number of containers available and with our clients not accepting deliveries on Friday, there will be a backlog of containers to deliver from our yard next week. Our main aim next week will be collecting containers from the terminal within the free storage time. We will do our best to meet your delivery dates and times but we will need people to be understanding and flexible by extending their hours of delivery.

With the shortage of timeslots we are expecting any late pre-alerts may incur storage.”

To add the difficulties of the transport companies, police are not allowing trucks to sit in the long queues outside the wharves as they have done in the past (perhaps due to the APEC summit?). Police are forcing the trucks to move on meaning the trucks then lose their position in the queue.

Ultimately, this means additional costs for importers and exporters by way of additional charges from the transport companies for truck waiting time, plus the possibility of storage charges being incurred on import containers due to the lack of available time slots.

There is one recurring theme coming from both stevedores. They both think that because they work 24/7 then so should all the other people involved in the import and export chain. The stevedores are quite happy to arrogantly try to impose their rule onto anyone else that has to use their services in some way. They care not that most importers are not major companies that have facilities that do or could work in such a way that meets the stevedores myopic views. Instead of trying to beat the community into submission and then crying because they can’t have it all their own way, perhaps they should do themselves a favour and work with the community rather than against it. Perhaps they should also make more staff & equipment available during normal working hours on normal working days? Now there’s a novel idea!

The stevedores used to allow 4 working days to collect containers before storage charges started. This meant that Saturdays and Sundays were not taken into account as part of the “free” period, and storage was never charged for those days. These days they only allow 3 days from the first day the containers are declared “available” for collection, and Saturdays and most public holidays are considered “working days” for the purposes of the stevedores “free” period calculations. This means long weekends are quite often a boon for the stevedores in terms of additional revenue from storage charges – kind of like “money for nothing” really.

For example, lets look at the long weekend created by the APEC summit in Sydney, over the period Friday 7 September, 2007 to Sunday 9 September, 2007. Suppose a container was declared first day available on Thursday 6 September, 2007. As businesses would not be working on Friday 7 and Saturday 8 September that leaves just that one day for ALL import containers to be collected from the wharf to avoid storage – a logistic nightmare impossible to achieve.

This sort of arrogance is why the Container Logistics Action Group (“CLAG”) was formed and has taken these issues to IPART (the Independent Pricing and Remuneration Tribunal) under the auspices of the Australian Competition and Consumer Commission who believe the stevedores have a case to answer in regard to probable collusion on pricing, and predatory practices using their duopoly to unfairly seek additional revenue.

The ACCC have provided CLAG with the authority to undertake collective bargaining with the stevedores on behalf of the landside parties that have to use the stevedores facilities (transport companies, freight forwarders, Customs brokers, importers, exporters).

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