Bodies claim DP World dispute hampering containerised exports

Grain Central January 19, 2024

Port of Brisbane is one of several sites impacted by the industry dispute. Source: Port of Brisbane

CONTAINERISED grain exports are facing delays and cost increases due to an escalation of an industry dispute on Australian ports.

A dispute between the Maritime Union of Australia and stevedore DP World that started in the Port of Melbourne last year is now affecting other ports where DP World operates, including Port of Brisbane, Sydney and Fremantle.

DP World is one of the largest container freight-service providers operating out of Australia, responsible for around 40pc of all incoming and outgoing trade movement, sources said.

The dispute, which started at Port of Melbourne in October, has gradually intensified and spread to other ports.

Melbourne attracted most of the initial media attention, because it is the biggest import arrivals port for Australia.

Freight & Trade Alliance director and Australian Peak Shippers Association secretary Paul Zalai said international vessel delays varied from two to five weeks.

He said shipping lines were charging additional fees due to the industrial action and not able to help mitigate delays by offering alternate services, particularly to Asian destinations.

Mr Zalai said lack of predictability of shipping schedule was also seeing many exporters who rail from regional centres direct to the wharves, now moving and storing their loaded containers at nearby port facilities.

He said this was adding transit delays, double-handling costs and additional truck movements.

“Trains often operate on a take or pay method, meaning you either use the slot or pay for it anyway even if the slot remains empty,” Mr Zalai said.

“The decision for our regional exporters then becomes whether to double handle the container at the port and pay for storage or pay for the empty train slot and rail it again the following week.

“Between three of our exporter members, data revealed more than A$2 million in double handling and staging costs was paid over the last three-month period”.

“Putting this into perspective, the costs for containerised grain translates to an additional $12 to $15 per tonne and in many cases, eliminates any profit for this and other similar high volume, low value agricultural commodities.”

GrainGrowers CEO Shona Gawel said the evolving DP World situation demonstrate the risk that industrial disputes could bring Australian ports to a standstill.

“Australia’s export industries and the wider Australian community bear the brunt of this inefficiency through a further escalation of costs,” Ms Gawel said.

“As an island nation, we can’t afford to push the port system to the breaking point every time an industrial issue needs to be resolved.

“The grains industry is currently in the middle of the critical export period, and high costs and delays at port not only threaten global competitiveness but also damage Australia’s reputation with international customers.

“International trade plays a significant role in Australia’s economy, and the wider impact of these disputes for port users and everyday business cannot continue to be discounted.”

Largest in decades

The current DP World dispute is already the largest waterside disruption since the infamous Patricks Stevedoring event in 1997-98, which paralysed agricultural and other exports for months.

The Howard Coalition Government, with the support of the National Farmers Federation and others, eventually succeeded in reducing manning levels and employment costs in Australian ports.

Despite that, Australian ports remain some of the more inefficient in the world, on a container movements per hour basis.

Since the Patricks dispute, there have been waterside EBA negotiations leading to go-slow actions, but nothing like the current action, Beef Central was told by a logistics manager working in chilled and frozen red meat exports.

The current dispute centres on the renewal of DP World’s Enterprise Bargaining Agreement with waterside workers.

Other stevedores including Patrick and Hutchinsons are not affected, as their EBAs are not due for renegotiation for some time.

The MUA claims to be asking for a 16 percent pay increase over two years.

DP World has said the union is after 27pc, claiming MUA’s request includes back play, termed a sign-on fee, from the expiry of the previous EBA last year.

The union’s protected industrial action has seen various stoppages and disruptions including container terminals being shut down on certain days. Certain shipping companies have apparently been targeted, for maximum effect.

Stevedores at DP World returned to work on Monday after stop-works on Friday.

Terminals in Brisbane, Sydney, Melbourne and Fremantle are exposed to two-hour work stoppages this week and a 24-hour ban on loading and unloading trucks and trains at all ports on Friday.

DP World has estimated the protected action is already costing the nation more than $80 million a week.

Thousands of containers have now been delayed across Australia as a result of the action.

Slow progress

Roundtable discussions involving the MUA and DP World in December, and again last week, failed to make progress over the dispute.

Federal industrial relations minister Tony Burke will meet with DP World tomorrow, as the government takes its first steps to progress a resolution.

DP World, Federal Opposition Leader Peter Dutton and importers/exporters have called for either the Federal or State governments to engage the Fair Work Commission for mandatory arbitration, but this has not yet taken place.

The Australian yesterday reported that the escalating ports dispute put front and centre the conflict between a union-backed Labor government that wanted to support workers’ rights, and the productivity of Australia as the cost-of-living crisis escalates.

The Prime Minister’s office on Monday said the two parties needed to work together.

“The government will continue to closely monitor the impact of the dispute and urges the parties to increase their efforts to reach a negotiated outcome,” a spokesperson from the Prime Minister’s office told The Australian newspaper on Monday.

Adding to recent workplace problems, DP World Australia was hit with a serious cyber-security incident in November last year, impacting stevedoring activities for a period.

Long-term reform needed: GrainGrowers

Ms Gawel said the current situation highlights existing port industrial relations mechanisms are not working.

She said the Productivity Commission found that since 2018, the average duration of enterprise-agreement negotiations has blown out to almost 18 months.

“The Commission has previously put forward draft recommendations for reform of the Fair Work Act 2009 to improve the productivity of the ports, and we need to consider these in the view of long-term reform,” Ms Gawel said.

“Of course, we fully support employees and employers’ rights to take industrial action to settle workplace disputes, but a framework is required to recognise the unique industrial and economic context of Australia’s ports and avoid damage to unrelated third parties like Australian grain growers.”

Parts of this story appeared in a Beef Central article by Jon Condon published earlier this week.



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