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INDUSTRY MARKET NEWS - LANDSIDE CONTAINER TRANSPORT COSTS TO INCREASE

Posted by Kathy Skapetis on 6 November 2023
INDUSTRY MARKET NEWS - LANDSIDE CONTAINER TRANSPORT COSTS TO INCREASE

 

INDUSTRY MARKET NEWS - LANDSIDE CONTAINER TRANSPORT COSTS TO INCREASE 

 

The ongoing complexity of unregulated maritime costs over the last few years continue to generate industry headlines. In what seems like a distant memory, skyrocketing container shipping costs saw consumers paying higher prices heightened by a global pandemic. A surge and soaring demand for physical goods, witnessed pandemic induced disruptions, congestion and international shipping rates at an all-time high. Whilst container shipping rates took a while to normalise, there is now persistent and wavering inflationary and economic pressures currently making headlines.

Landside container transport costs are now dominating industry headlines, as fees levied on transport companies continue to rise. Port users, namely freight forwarders, importers, exporters and consumers alike indirectly linked within the supply chain have responded angrily to recently announced planned increases to terminal fees, increases of up to more than 50% at Brisbane, Melbourne and Sydney[1].

What is estimated at more than $1 billion in annual fees levied on transport companies and port use[2], the Freight & Trade Alliance which represents importers and exporters describing revised fee increases as ‘exorbitant’, wrote to Treasury earlier this year suggesting continued price rises and higher scheduled fees will not only bolster stevedores’ profits, but at the same time warns that such high increases will contribute towards inflationary pressure across the economy. Speaking to the Australian Financial Review, the country’s former competition watchdog chair Graeme Samuel, stated the federal government of having light touch in regulating stevedores, and urged better control of the privatised model that had led to “rampant high prices”. By comparison, on the west coast, state government owned Fremantle Ports will attract a rise of only 5%[3].

Earlier this year, the Australian Productivity Commission published recommendations for Treasury to regulate fees with a call on enforcement by the Australian Competition and Consumer Commission[4]. Ports and terminals stated forecasting expenditure of more than A$600m across all terminals was necessary for investment in infrastructure, namely IT, new equipment and civil expansion works to cater for greater demand[5].

Should you have any further questions or require more information in the meantime, please do not hesitate to contact a member of the team for guidance

 

[1]  Whiteman, A. (2023, November 02). 'Daylight robbery' – Fury at huge hike in terminal fees by DP World Australia
   https://theloadstar.com/daylight-robbery-fury-at-huge-hike-in-terminal-fees-by-dp-world-australia/
 
[2]  Wiggins, J. (2023a, May 21). Importers warn of $1b fee hit from stevedores, ports.  
   https://www.afr.com/companies/transport/importers-warn-of-1b-fee-hit-from-stevedores-ports
 
[3]  Wiggins, J. (2023b, November 02). DP World’s 52pc fee rise at Port of Melbourne labelled ‘exorbitant’.    
   https://www.afr.com/companies/infrastructure/dp-world-s-52pc-fee-hike-at-port-of-melbourne-labelled-exorbitant
 
[4]  Productivity Commission. (2023). Australia's maritime logistics system
   https://www.pc.gov.au/inquiries/completed/maritime-logistics/report
 
[5]   Whiteman, A. (2023, November 02). 'Daylight robbery' – Fury at huge hike in terminal fees by DP World Australia
    https://theloadstar.com/daylight-robbery-fury-at-huge-hike-in-terminal-fees-by-dp-world-australia/
 
 
 
 
Author:Kathy Skapetis