The possibility of a special Melbourne freight charge levied by shipping lines on imports and exports passing through the Port of Melbourne is an issue of the utmost concern to business, says VECCI.
Shipping Australia, representing shipowners and operators, this month told the Port Phillip Bay Channel Deepening Project (CDP) Supplementary Environment Effects Statement (SEES) Panel Inquiry that if channel deepening did not proceed, a special Melbourne freight charge might apply to imports and exports passing through the Port of Melbourne.
“Such a measure would hobble export competitiveness and increase prices for consumers, leading to inflationary effects and an impact on investment”, says VECCI Chief Executive Officer, Mr Neil Coulson.
“The possibility of such a charge provides a further argument for channel deepening to proceed forthwith.
“Melbourne risks being the `odd man out’ among Australia’s capital city container ports by not deepening to 14 metres. This situation is already disrupting shipping schedules Australia-wide, with restricted loadings and cargo diversions adding to costs across the supply chain.
“Discussions between VECCI and a number of businesses involved in the import, export and distribution of physical goods, confirmed the impact of increased freight costs. Employing tens of thousands of Victorians, these businesses revealed a range of possible considerations if channel deepening did not occur including: whether company headquarters or logistics bases remain in Melbourne or are established elsewhere; whether further investments are made in Melbourne or elsewhere; or whether operations remain in Melbourne because of sunk investment costs but suffer increased costs and reduced competitiveness and profitability.
“Business and the entire Victorian community will literally pay the price if we do not take action and ensure Melbourne enjoys the same infrastructural efficiencies as Australia’s other ports”, says Mr Coulson.
Further information
Shipping Australia has quantified the cost of containerships arriving at or leaving Melbourne at less than optimal capacity as up to $400,000 per ship – and in April this year, an alarming 41 per cent of ships using the port could not operate at theoretical maximum capacity.
Using the example of a major weekly shipping service connecting Australia with South East Asia, Shipping Australia cited additional costs accrued through having to disrupt schedules to catch high tides on arrival or departure, restrict loadings for export and/or import sailings, divert cargo to other, deeper ports, or, ultimately, by-pass Melbourne altogether. Each of these problems has a real or opportunity cost that ends up being borne by the supply chain in one form or another.
VECCI’s submission is available by contacting VECCI Strategic communications, per the details below. |
