AOF - Australian Oilseeds Federation
AOF - Australian Oilseeds Federation
11/26/2021 | Press release | Distributed by Public on 11/25/2021 23:52
ACCC Reports on Container and Stevedoring Issues
"The margins of Australian importers and exporters are being squeezed, as they are all around the world, and the current situation is very challenging for businesses that rely on container freight," said Mr Rod Sims, Chair of the ACCC.
Grain exports were specifically identified in the report as being 'bumped' from shipping schedules in favour of higher value goods. It noted that increased uncertainty coupled with rising freight rates makes Australian grain less competitive where producers are facing a competitive international market serviced by multiple countries. It also leads to a reluctance by shipping lines to service Australia, further impacting on exporters.
The report noted that Australia risks becoming a less attractive destination for shipping lines unless productivity, workplace relations, and supply chain inefficiencies are addressed.
The report identified the uncompetitive nature of Australian stevedoring function, noting productivity at Sydney and Melbourne ports were in the lowest 15% of 351 ports. Adelaide was also in the bottom 15% in terms of productivity.
Download the Global Container Port Performance Index 2020 Report
The report identifies a number of other longer-term trends that have transformed Australia's container industry over the past decade. For example, the entry of Hutchison and VICT has changed competitive dynamics between stevedores and, as a result, stevedores are now earning less and investing more. They have also had to rely more on revenue from charges levied on landside transport operators than they have in the past.
"At the current level of landside charges, stevedores do not appear to be earning excessive returns, but we will continue to keep a close eye on these charges," Mr Sims said.
While the report offers no solutions, it does at least ensure the Government is fully aware of the issues facing the grain and broader export industries and notes that operation of the global supply chain will be restored, and freight rates will fall once the shocks caused by the pandemic stop.