Australian Consumer Watchdog said the current global supply chain crisis is putting “strong pressure” on Australian exporters and importers. This means that people planning to import Christmas gifts need to complete their purchase early.
The Australian Competition & Consumer Commission (ACCC) Container Handling Monitoring Report 2020-21 reveals that many Australian exporters are currently struggling to meet their contractual obligations.
Some major retailers have relied on purchasing their own shipping containers and chartering their vessels to ensure that their cargo arrives by Christmas.
A cargo handling worker told the ACCC that only 10% of vessels arrived at the designated berth window in 2020-21, the lowest rate ever.
However, the problem of Australian port inefficiencies began long before COVID-19 and only exacerbated the situation.
The ACCC cited a study by the World Bank and IHS Markit, which ranked Australia’s largest container ports, Melbourne and Sydney, in the bottom 15% and 10% of the 351 ports surveyed prior to COVID-19, respectively.
“It was said that some shipping companies had already withdrawn their services from Australia before the COVID occurred. Australia has taken decisive action to remain an attractive destination for shipping companies around the world. You have to take it, “Sims said.
Idle time in Sydney’s Port Botany almost doubled during the pandemic and became heavily crowded, with some shipping companies choosing to skip the port altogether.
Sims said the current regulations on Australian container ports have little or no purpose and need to be regulated to make up for the lack of competitive pressure.
The report said the privatization of four major Australian ports appears to have a positive impact on the timeliness of port investment. Ports are also more aggressive in responding to customer needs.
However, it also led to a significant increase in rent to the container terminal. For example, one of the privatized ports, the Port of Melbourne, currently pays the highest land tolls in the country of all container cargo handlers.
The report also noted the ongoing turmoil caused by industrial activities led by the Australian Maritime Union (MUA).
“Unfortunately, industrial activity in addition to existing congestion puts a heavy burden on international container ports during times when they are most unmanageable. In the case of Port Botany, some shipping companies have decided to delay their use. The port is commercially infeasible, “Sims said.
Massive strikes broke out across Australia in October as MUA promoted policies such as corporate agreements limiting its ability to make hiring decisions for cargo handling workers.
For example, the Hutchison Ports Australia agreement requires that 70% of new employees be “family and friends” of existing employees or people selected by the MUA.
MUA said it is pushing for a similar deal to Patrick Terminals, which applied for termination of its corporate deal with the union last week, limiting its ability to meet customer requirements in the current congestion.
“Sufficient,” said Patrick CEO Michael Jobic said “Negotiations have been going on for nearly two years, and frankly, especially in Sydney, there seems to be no agreement as the union demands employment from a selected list of family and friends.”
“We are at the end of the road and we need to reach an agreement with employees who work for our customers, which will help us stay competitive in future markets.”