TERMINAL access charges imposed by stevedores are undermining the benefits of waterfront competition, the Australian Competition and Consumer Commission says.

The competition regulator has just released its Container Stevedoring Monitoring Report for 2019-20, with figures showing TACs on aggregate had increased by $87.6m, or 51.9%, since 2018–19.

At the same time, stevedores’ total revenues at monitored ports rose by $38.9 million, or 2.8%, despite “a significant drop in container volumes”.

“The ACCC is concerned that the benefits of greater competition between stevedores to provide services to shipping lines will be eroded by increasing TACs,” the ACCC stated, before noting that any regulation of these charges was a matter for state and territory governments.

“Because importers and exporters contract with shipping lines to send cargo and the shipping lines then choose the stevedore, TACs are to some extent a ‘take it or leave it’ proposition,” the ACCC stated.

“Since landside port users cannot directly choose their stevedore there is little effective constraint on these rising charges.”

Container volumes for the full financial year fell 4.4% on a total lifts basis and by 4% on a TEU basis compared with 2018–19.

On both measures, this represented the largest annual fall in container volumes since the ACCC began monitoring in 1998–99 in the wake of the Patrick dispute.

Costs were reported to have fallen 1.7%, operating profit margins for the industry increased for the first time in a decade, from 5.8% in 2018–19 to 9.9% in 2019–20, largely due to revenue growth from landside charges.

Overall return on tangible assets also grew.

Some investments were noted, with infrastructure upgrades across all of Patrick’s terminals valued at $150m, and the start of the Port of Melbourne port rail transformation project in June 2020.

Productivity measures showed capital and multifactor productivity remained unchanged, while labour productivity fell 4%.

“With the constraints on employees in the COVID-19 environment, this does not seem unexpected,” the ACCC stated.

The ACCC reported other issues since the reporting period, notably industrial action and congestion at Port Botany and the imposition of a congestion charge on senders and receivers of up to US$350 per standard container in Sydney.

“The ACCC is watching developments around congestion charges closely, noting that we consider these should be temporary and not become embedded fees borne by importers and exporters<’ the regulator stated.

The full container stevedoring monitoring report can be viewed here.