Throughout the past few months, wharf workers and their trade union have been engaged in several rounds of industrial action across Australian ports.
Within a week, we’ve seen industrial action at Port Botany (Sydney) having significant impacts on both importers and exporters. This has left businesses across Australia struggling against substantial unforeseen port congestion fees and last-minute omissions of Port Botany directing cargo instead to Melbourne or Brisbane and leaving importers to pay the price.
Below, we’ll take a look at what the industrial action dispute is about as well as its ongoing effects on importers and exporters.
What industrial action is occurring at DP World ports?
Industrial action at ports operated by major players such as DP World, Patricks and Hutchinson has been going on for some time. The trade union has been negotiating over the terms of new enterprise agreements, yet those discussions continue to break down. At Port Botany, DP World have been discussing terms for a new agreement over the past 18 months with no conclusion in sight.
In August, DP World said in a statement that the effect of action “varies across [terminals] and includes various bans on employees working in tasks above their normal grade, overtime, shift extensions, accepting late call-ins and ceasing advanced or delayed start times”. As a result of the most recent breakdown in Sydney, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) organised industrial action ay Port Botany consisting of work bans at major stevedores.
DP World made an application to the Fair Work Commission to stop the ongoing strikes at Port Botany. On Saturday 21 September 2020, hours before the dispute was scheduled to be heard, DP World and the Maritime branch of the CFMMEU reached an agreement whereby workers would their industrial action after DP World agreed to continue ongoing discussions.
This, however, does not mean that future strikes are off the table. Importers and exporters should continue to factor in further uncertainty in their planning.
How is industrial action impacting shipments?
A look over recent weeks will see how significant the impact has been.
It’s been reported in the Australian Financial Review that there’s a cargo backlog at Port Botany of up to 11 days directly because of the overtime and work bans at Patrick Terminals and at Hutchison Ports. This has caused several shipping companies to pass the costs over to importers and exporters with a “congestion charge”.
On Thursday 10 September, shipping line MSC announced they would be introducing a mandatory import and export Port Congestion Fee in Sydney effective Monday 14 September. The following day, on Friday 11 September, ANL CMA CGM followed suit and announced they too would be implementing a similar fee albeit slightly cheaper at 285 USD per TEU. PAE then joined in making a similar announcement on Friday. On Wednesday 16 September, Hapag Lloyd announced their Port Congestion Fee.
On Friday 18 September 2020, Maersk added fuel to the fire announcing they would cease all new bookings for destination cargo from Asia, Europe, Middle East, Africa and India Sub-Continent to Sydney.
As these announcements were released, similar announcements came out to reveal shipping lines had omitted Port Botany from their schedules, releasing cargo instead into Melbourne or Brisbane where importers would need to pay for on-carriage. Similarly, export cargo has been at Port Botany only to discover the vessels booked will no longer call at the port to avoid the industrial action and subsequent delays.
The delays are costing companies around $25,000 a day per ship. Many importers who have been forced to redirect to Melbourne are now facing additional charges of around $2,000 per container in order to return stock to Sydney.
How we’re coping – rerouting your cargo
In the midst of an industrial dispute coupled with ongoing COVID-19 uncertainty, we’ve been working hard to ensure importers’ and exporters’ cargo is protected and reaches its destination without significant delay.
Right now, we are:
- currently working hard to reroute cargo through shipping lines that are not applying a port congestion fee – we’re unsure how long this will be the case for; and
- continuing to put pressure to the Government to put an end for the industrial action through industry representatives Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA).
Federal Government Support for Importers and Exporters
The Federal Government is on our side, calling for a resolution to this dispute as quickly as possible.
Deputy Prime Minister Michael McCormack has expressed his support, saying that “our exporters are already having to grapple with significant pressures as a result of the pandemic and now is the worst possible time for such actions that only compound these pressures”.
He recognised that the “last thing [our farmers and businesses] need is further uncertainty and delays in getting their product out of Australia.”
Industrial Relations Minister and Attorney-General Christian Porter has also spoken out on our behalf to end the strikes. In a statement, he recognised that Port Botany alone handles virtually all container movements arriving and leaving New South Wales, contributing $3.7 billion each year to the State’s profit – not to mention its support of around 25,000 jobs.
“With so many businesses still struggling to get back on their feet, now is certainly not the time for damaging industrial action that threatens to put our wider recovery efforts in jeopardy, along with the health and safety of everyday Australians,” Mr Porter stated.
But even though the most recent industrial action planned at Port Botany has been suspended, the saga isn’t over yet.
Importers and Exporters – What It Means For You
We’re currently in one of the most challenging periods we have ever seen. Not only is the industry facing enormous waves of uncertainty because of a global pandemic, but the waves of industrial action have been crippling the industry for importers and exporters alike.
Importers and exporters are facing unforeseen charges up to $600USD per 40GP for goods that are already on the water. At International Cargo Express, we’re continuing to advocate against this action.
As an importer or exporter, the best course of action to take right now includes constant communication with your freight forwarder. We’ll keep you up to date with information as soon as it comes to light, including informing you of:
- how we’re rerouting your cargo to avoid congestion fees;
- any new charges you may be required to pay, if such a reroute is not possible; and
- the state of any current or planned industrial action at your port destination.
If you have any queries or concerns about your cargo, and how the industrial action is impacting your imports or exports, please don’t hesitate to contact our experts on 1300 227 461.