Peter Anderson
Encouraging signs for landside port operators
March 2020
Cost pressures have dominated conversations for landside freight operators servicing the Port of Melbourne and elsewhere over the past two years, as they grapple with managing the consequences of higher business costs that have impacted supply chains everywhere.
This comes in the face of soaring demand pressures for all operators due to population growth, lower inflationary pressures on consumer goods, and the proliferation of online shopping.
Managing increased demand was the theme of our just-held State Conference at Silverwater Resort, and was the subject of robust discussions amongst operators and other industry stakeholders.
The VTA has been steadfast with its advice to operators that higher costs must be passed through the supply to avoid threats to jobs, future investment and the viability of the business.
Ultimately it is the end consumer that must pay for procuring goods and services.
So, it is with relief and optimism that we welcome two key initiatives that point to signs of relief for landside port operators.
Firstly, a plan announced by Victorian Freight and Ports Minister Melissa Horne for a $125 million investment to build on-dock rail at the Port of Melbourne is welcome news for landside operators.
The plan is intended to make rail transport more competitive, reduce the cost of the port supply chain, and reduce truck congestion at the entrance to the port.
When the Victorian Government leased the Port of Melbourne in 2016 there was hope and scepticism from the transport industry, as a new vision, culture and resource was introduced by the new Lonsdale consortium owners.
There was optimism that productivity gains would secure Melbourne as the freight capital of Australia, spurred on by promises from the government that ongoing development of the port would enhance its reputation as the leading port in Australia.
So, announcements like those from Minister Horne for significant investments in new infrastructure like on-dock rail is welcome news for an industry desperate for productivity gains to offset higher trading and business costs.
While improving rail access to the Port of Melbourne was a legislated condition of its lease, its delivery will help to improve rail freight across Victoria.
We are also pleased the Andrews Labor Government is supporting the Port Rail Shuttle Network connecting freight hubs in Melbourne’s north and west to the port, new intermodal terminals planned at Truganina and Beveridge, new automated signalling for faster rail freight to GeelongPort and improvements in the regional rail freight network.
Secondly, a draft of a Deloitte Port Pricing and Access Review Summary commissioned by the Victorian Government after petitioning by the VTA has confirmed costs for the transport sector are rising and having a flow-on effect throughout the state’s economy.
The report reinforces the view long advocated by the VTA that action must be taken to ensure productivity improvements are realised at the Port of Melbourne and to secure the Port’s position as Australia’s largest.
It also recommended there is no compelling case for economic regulation of stevedore charges at the Port of Melbourne at this time.
The Government has indicated it will hold off making formal decisions about the report’s recommendations until later in the year and after the ACCC releases its Annual Container Stevedore Monitoring Report.
The year ahead will deliver important outcomes that we hope will further ease cost exposures for landside operators and which are out of their control.
We anxiously await the ACCC review of Part X of the Competition and Consumer Act 2010, along with the Victorian Government’s response, which must deliver greater pricing transparency and efficiencies for operators at the port.
The VTA Landside Improvement Strategy addresses issues confronting operators at the port with commonsense recommendations and solutions.
While it is being considered by the Government it delivers on ensuring that the Port of Melbourne grows in its productivity and efficiency, and that the wharf carrier sector is not taken advantage of in the future.
We look forward to working in close partnership with the Government and other key stakeholders to ensure these projects deliver maximum return for the road, rail and sea freight operators that use them, and in turn the people of Victoria.
Peter Anderson
CEO, VTA
