More reactions to the draft report of the Productivity Commission
ANOTHER outpouring of responses to the Productivity Commission’s draft report follows a pattern of relief and frustration voiced on the day of its release.
The draft report, Increase the productivity of Australian container ports: between water, quay and warehouse, was released on Friday, September 9.
That’s the result of a survey of Australia’s maritime logistics system, which basically found that the underperformance of the country’s container ports costs the economy around $605 million a year.
The report covered the lack of competition in parts of the industry, the impact of workplace accommodations on productivity, investments in port infrastructure, technology adoption and the establishment of a strategic fleet.
Shipping logistics expert Peter van Duyn said RCD he agrees with the view of the Productivity Commission that industrial relations in Australian ports need an overhaul and are holding back port productivity.
“[But] I disagree with the recourse and interpretation based on the IHS Markit, as I have already commented in RCD items,” he said.
Mr van Duyn pointed to the draft report’s suggestion that Australia’s crane rate is comparable to international standards, but the crane intensity is below normal, resulting in a longer turnaround time. long.
“It’s for a number of reasons: Australian ports have a relatively short quay length for each stevedore, which hampers productivity,” he said.
“Cranes and container handling equipment are expensive, and stevedores are reluctant to invest in capital if they are unable to get a return on investment, which may not be the case in other ports because the stevedores belong to the State.
“Australian ports generally deal with older and smaller vessels, which limits the ability to assign more cranes to a vessel.”
However, Mr van Duyn agreed with the commission’s view that landside data should be included in the assessment of port performance, which he said was not the case with the IHS Markit study.
“Australia’s biosecurity requirements, which are among the strictest in the world, also impede the rapid turnaround of vessels and, more importantly, containers, resulting in demurrage payable to the shipping line by the transport operator. /importer when containers are not returned to an empty container yard quickly enough.
He said he also agreed with the commission’s argument that terminal access fees should not be charged to the shipping operator but incorporated into the handling rate charged to shipping lines.
“TAC fees also require more oversight than [what they currently have]. The commission also indicated that the current performance data undertaken by BITRE is insufficient and has too long a delay to be useful.
Responding to comments about the proposed development of a strategic fleet – that it is indeed unnecessary – Mr van Duyn said he disagreed with the Productivity Commission’s view.
“In my view, it is imperative that we increase the number of Australian-flagged ships both for strategic purposes, but also to provide training opportunities for Australian seafarers.
“It’s not all about economics. It will take a concerted effort by all stakeholders, including trade unions, to achieve this.
The Australian Industry Group also responded to the Productivity Commission’s draft report when it was released.
Ai Group, a national employers’ association, said it had called for immediate action to bring about reform for Australia’s container ports – a call it said had been confirmed by the draft report.
“The effects of [port inefficiency] are driven by consumers and businesses, increasing costs and reducing productivity,” said Innes Willox, Ai Group Chief Executive.
The Productivity Commission had attributed deficiencies in port productivity, in part, to recent outbursts of industrial action, a position rejected by the MUA.
“As the commission has pointed out, disruptions in recent company negotiations have imposed significant costs on businesses dependent on ocean freight,” Willox said.
“More effective remedies are needed to limit negotiations and industrial actions that are unreasonably prolonged.
“This further speaks to the need for changes to the Fair Work Act. The MUA has excessive power in corporate negotiations which must be curbed.
Mr Willox said he believed the creation of a Ports and Maritime Industry (PSI) code would address “extreme restrictions” in shoreline enterprise agreements that drive up costs.
“The code could be created through amendments to the Fair Work Act,” he said.
“Since it is proposed that the legislative source of the PSI code be the Fair Work Actthe logical regulator in charge of its application would be the fair work ombudsman. »
In terms of port perspectives, the Port of Melbourne also welcomed the release of the draft report, supporting the industry-wide survey on optimizing productivity in the maritime supply chain.
The Port of Melbourne is the owner-manager of the container port and is responsible for developing and administering port operations under a 50-year agreement that began in 2016.
“We have great respect for the regulatory framework that the Victorian Government put in place when the port was leased in 2016 and we strongly believe the framework is working as intended,” the Port of Melbourne said in a statement.
“Indeed, the Port of Melbourne believes that having both the right investment and the right public policy parameters is essential to ensure that Australia’s ports continue to be a vital commercial hub and node in the port cargo supply chain and contribute to the prosperity and well-being of our communities.
“As we have done since the federal government announced the inquiry, we will continue to participate openly in the process.
“To that end, we are reviewing the specific findings and recommendations of the draft report in detail and will respond accordingly.”
Neil Chambers, director of Container Trade Alliance Australia, said the CTAA is also engaging with the draft report following its submission to the Productivity Commission on inland container logistics issues.
The CTAA had also participated in online consultations focusing on landside productivity, container terminal access fees, and foreign shipping line container detention fee policies and practices.
Chambers said in a statement that he believes the Productivity Commission has heard the concerns and arguments of CTAA members.
“CTAA and its allied companies will review the draft report in detail and submit a new submission for investigation by the closing date of October 14, 2022,” it said.
And a spokesperson for NSW Ports confirmed RCD it also examines the draft report.