The recent release of the Productivity Commission’s final report into the Maritime Logistics System has once again highlighted the need for the industry to implement changes to improve efficiency and productivity, and both business and consumers stand to benefit.
I, among others within the industry, have been calling for meaningful change to occur for some time now, and I believe this final report presents an opportunity for that to occur.
The various problems within our industry have been well documented over the past few years, thanks largely to the pandemic shining a very public spotlight onto the supply chain.
The Productivity Commission notes that higher productivity at Australia’s container ports is achievable and would deliver significant benefits and delivers various recommendations, including that a mandatory container terminal operator code be enforced by the Australian Competition and Consumer Commission.
While this would be an improvement on current arrangements, I personally believe it’s a waste of ACCC resources and taxpayer dollars to implement a new code to monitor and regular Terminal Access Charges when it could simply be left to the two commercial clients – the terminals & the shipping lines.
However, if such a recommendation is implemented by the Federal Government, then we echo the sentiments of the Freight & Trade Alliance, in that it should not be watered down in any way, or else we will continue to be exposed to ongoing and uncontrolled spiralling costs.
The ACCC also released its container monitoring report in December, the results of which weren’t a surprise, particularly commentary around the impact on consumers and the need for greater protection against unreasonable detention fees.
We’ve been highlighting detention costs for months now, with turnaround times for containers simply unrealistic, because of continued congestion and delays within the supply chain. It’s unreasonable to charge detention fees when cargo owners simply cannot access their cargo, through no fault of their own.
That’s another charge that ultimately gets passed down the line, and onto consumers.
While wholesale change takes time, I believe there are some immediate measures that can be implemented, that will make a difference;
- Greater transparency and accountability for fees charged: Whether it be a fuel levy, or infrastructure fee, there should be greater transparency around what cargo owners are paying for, where the money is being spent, and what improvements/efficiencies are achieved as a result.
- Be Proactive, Not Reactive: With declining consumer demand easing the pressure in some parts of the supply chain, now is the time to implement efficient practices, upgrade equipment and infrastructure, and upskill staff where possible, to ensure the same problems don’t arise during the next period of peak demand.
- Early Container Return Incentive: While detention fees are charged for containers returned late, there is currently no incentive for the return of containers early. Cargo owners who can turn around containers within 24-48 hours should be given a credit, as returning containers early not only improves the flow of containers throughout the supply chain, but it also offers shipping lines with an opportunity to earn more money on that container.
- Improved Industry Awareness: We should be talking up the essential roles played by workers throughout the supply chain, and the career opportunities that exist for young people in terms of training, up-skilling and career longevity.
After years of doom and gloom, I believe the industry is on the cusp of being able to implement a range of measures that will improve the supply chain and make it more efficient.