Sydney Ports Corporation Scraps Peak Pricing Plan – N.S.W. Government To Introduce New Regulations To Force Participants To Meet Performance Benchmarks

In May, 2010, the Sydney Ports Corporation presented industry with an overview of its plan for improving the throughput of containers at Port Botany.  A copy of the overview document can be found on our “Resources & Documents” page.

Sydney Ports Corporation has scrapped their earlier announced plan to introduce a Peak Pricing charge, and instead the ongoing costs of the Port Botany Landside Improvement Strategy (“PBLIS”) solution will be funded by a AU$10.00 per container increase in the wharfage charge levied on FULL import and export containers.

The NSW Government intends to introduce new regulations to force the stevedores and transport operators to cooperate with the introduction of the planned reforms.  Sydney Ports Corporation had hoped the major players and stakeholders would be able to sort out there problems without the need for regulation, however, they have conceded that regulation seems to be the only way there will be any reform.

The regulations are planned for introduction during the third quarter of 2010, and it is anticipated the PBLIS reform process will be in full swing by the fourth quarter of 2010.  One of the major points of the new system will involve a new Operational Performance Management (“OPM”) between stevedores and transport carriers that will include performance benchmarks for BOTH stevedores and truck carriers.  There will be a penalty system in place for both the stevedores and the truck carriers where they do not meet the specified benchmarks.

While this is a good thing overall, as the stevedores are finally on notice that lack of performance will cost them financially, the regulations will create issues in other areas.  For example, at the moment the stevedores have the option of not penalising a truck carrier where a truck doesn’t arrive for its scheduled time slot (such as delays caused by Sydney’s notoriously bad peak hour traffic which gets worse as each year passes – look at what happened when the M5 tunnel was suddenly closed to morning peak hour traffic recently by an accident, which is an all too common scenario), the stevedores will not have that same ability under the regulations currently proposed.  It is to be hoped the NSW Government will build in some sort of flexibility to allow for late arrivals due to circumstances beyond the control of the truck operators, and similarly for circumstances beyond the control of the stevedores if they are found to have fallen short of a specified benchmark.

As one reporter has said “The current PBLIS strategy has already made a major concession to transporters, by putting the peak period pricing regime on the back burner.  With clear, measurable and enforceable operational performance management standards, the current plan gives as much certainty to both parties as is humanly possible under the circumstances.

As for the M5 tunnel, allow an extra three hours and take a good book – something of “War and Peace” proportions.”

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