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Container surcharges to hit transporters

June 16, 2017

By now, most freight companies would be aware of Patrick Terminals’ impending new container movement surcharges, set to take effect on 10 July 2017. This latest price hike follows rival stevedore DP World Australia, which also imposed an “infrastructure surcharge” of $21.16 per container, back in April.

In this instance, Patrick blames upwards shifts in rent, land tax and council rates, some of which is says have increased 140% and have been backdated to 1 July 2015, as being the reasons for the surcharge.

The company also says its terminal infrastructure maintenance costs – now over $285 million spread across its portfolio – have resulted in material improvements in the efficiency of the landside operations including reduced truck turn-around times and congestion.

“To date, none of these investment costs have been passed on to our customers,” the company’s letter to its customers stated.

Patrick will introduce the infrastructure surcharge at the Sydney and Fremantle Terminals and increase the existing infrastructure surcharge at Fisherman Islands and East Swanson Dock Terminals as part of the basis on which access to the terminals is grant.

The new surcharge at Sydney and Fremantle brings these terminals into line with Patrick’s other terminals. It applies to road and rail transport operators for all full container movements – import and export.

The surcharges (per box) are:

  • Sydney $25.45
  • Fremantle $4.76
  • Fisherman Islands $32.55
  • East Swanson Dock $32.

All Patrick’s ancillary charges have also been increased.

Industry critical of charges

Many transport organisations have been critical of the move.
Container Transport Alliance Australia Director, Neil Chambers said: “The implementation of these surcharges by Patrick, coming off the back of the surcharges applied by DP World recently, mean that the cost and revenue collection structure in the container logistics industry has changed fundamentally and puts enormous cost pressures on container transport operators and their freight forwarder and shipper customers.

“The position of CTAA companies remains the same – the stevedores should either absorb increased operating costs or negotiate their collection through their commercial clients, the shipping lines. Should the shipping line then opt to pass on this cost, it can be negotiated on a commercial basis between themselves and their client importers, exporters or freight forwarders.”

Victorian Transport Association CEO Peter Anderson said operators had no choice but to pass on the higher surcharge.
“At a time when operators are facing unprecedented increases to infrastructure and road user charges in and around the Port of Melbourne, it is important to ensure the increases are passed on through the supply chain for freight businesses to remain sustainable and viable in a competitive trading environment,” he said.

Road Freight NSW General Manager Simon O’Hara described Patrick’s new levy as blatant cost-shifting.

“In an already tight industry with low margins, we believe that Patrick’s needs to listen to our members about this surcharge.”

Cost-cutting temptations

As with any increase in operating costs, heavy vehicle transport companies may look to cut corners to help recoup the surcharges if they find they are unable to pass on the new charges to customers.

Breaking speed limits, overloading, ignoring scheduled rest periods and fatigue mitigation programs to meet tight schedules may be tempting to some operators. But the financial penalties for Chain of Responsibility breaches – under which speed, mass and fatigue reside – can outweigh any gains. Plus, the added safety risks involved in these breaches can end in massive fines and even jail time.

Read CoR Adviser each month to find out exactly what your obligations are – regardless of where you fit in the supply chain – to obey the heavy vehicle national law and what you need to do to encourage others in the chain to do likewise in order to fulfil your responsibilities.

Written in plain English by the transport lawyers at Holding Redlich, CoR Adviser is the best place to find all your CoR-related material. Remember, most of the information you need to know about CoR isn’t published in the mass media.

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