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Thursday, August 27, 2009

My home port has lost the plot.

(You are getting this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)

This week I received an email from the Port of Brisbane Corporation(a Queensland Govt owned entity) advising me that they were increasing port and wharfage charges by 6% on all cargo except for coal which cops an 11.1% hike as of the 1st of December. Supposedly this is to keep pace with capital expenditure on port development. This increase announcement comes at a time when many port users are struggling with the impacts of the GFC and cannot afford any cost increases whatsoever. KPMG has apparently undertaken a study on the impact of the increase. Well...we are probably the largest freight forwarder of heavy equipment through the port and I didn't hear from them.

Can the Port of Brisbane(POB) be serious with this increase?! This directly impacts our exporters and makes them less competitive..and I would have hoped that goverments at all levels would be doing everything in their power to help them. A high school economics student could tell you that exports bring money back into the country. Hold on..don't we have a MASSIVE national debt from stimulus packages of $300bn + and climbing? What the hell is going on and when is the QLD Govt and it's various entities going to stop trying to milk coal dry with charges and royalties?! Enough! Coal is one of our biggest exports!! Supporting trade 100% should be a priority..shouldn't it?

The Port's annual report for 08/09 is yet to be released but I can tell you that 07/08 was a good year delivering a net profit after tax of $438.7m. A dividend was declared and the QLD Govt received $205.7m for this year. Not bad and looking at cargo volumes for 08/09, while smaller, it still should be a decent year.


Coincidentally....perhaps....the QLD government is in the process of selling off the Port of Brisbane. Maybe the real agenda of increasing costs is not to further develop the port but to make the books look as good as possible for the buyers they hope to attract. Sound corporate governance if you are selling a company, however shouldn't a goverment owned entity charged with the responsibility of key port infrastructure have some responsibility and conscience to support shippers by keeping costs to a minimum? I don't care when the last increase was or what the CPI is....a govt owned port entity should be supporting trade as it's primary objective not taking decisions driving a sale outcome. This doesn't mean I think any operation should lose money. A break even with lower port costs for users should be the goal. Over and out!

Some ports around the world recognise the distress the shipping industry is in and are reducing costs. It has been reported by various shipping media outlets that ports such as Singapore, Dubai and Karachi are reducing their costs to help the port users navigate the GFC. Shouldn't we be doing the same at this time?

On top of this my heavy equipment customers and ship operators are frequently frustrated by delays to vessels and increased costs caused by congestion at berths 3 and 4 in particular. Then they are forced to deal with the POB appointed stevedore Australian Amalgamated Terminals Pty Ltd which is a JV between DP World (formerly P&O) and Toll/Patrick. AAT is under investigation by the Australian Competition & Consumer Commission for various issues that may restrict dealings and competition. I fail to see where the competition is in stevedoring with the two big boys of the Australian waterfront in a partnership in AAT. At AAT you basically have to self deliver your own cargo. What happened to having wharfies sort, stack and deliver cargo to road transport companies? It's all gone too far.

I won't even open the port motorway discussion except to say there was another fatality on that road a week ago. A road my team travels daily. Much needed upgrades have been deferred and deferred by the QLD Government and it isn't coping. How many more fatalities will it take for work to start?

With the impending sale of the Port of Brisbane I hope that once privatised, we will see a tremendous improvement in the operation of the port. I know that my customers and I and other port users are frustrated and increases in costs during a global credit crunch only add insult to injury and clearly signals to me that urgent change is now a necessity! Bring it on.

All for now and for the international readers of my blog.....forgive me for the local indulgence.


Brad Skelton
The Shipping Bloke.

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