DP World ports grind to halt, cargo transport costs surge in dispute fallout

The price of transporting cargo to and from stevedore giant DP World’s ports has increased by a third as a result of a protracted industrial dispute between the maritime union and one of Australia’s largest stevedores, with fears of further cost pressures and havoc after three days of negotiations failed overnight.

Dubai-based DP World said work at its Sydney, Brisbane and Fremantle terminals had ground to a halt and skeleton staff were working at its Melbourne terminal. The stevedore had earlier this week declared it would dock employees’ full pay from Friday if they took part in any industrial action.

Dubai-based stevedore giant DP World has been involved in a protracted pay dispute with workers.
Dubai-based stevedore giant DP World has been involved in a protracted pay dispute with workers.Credit: Joe Armao

The Maritime Union of Australia accused DP World of escalating the industrial action, while the stevedore said the move was necessary to stop the union from prolonging the dispute.

MUA assistant national secretary Adrian Evans said the parties were unable to reach an agreement following three days of meetings this week, and accused DP World of “squandering” the process by refusing to engage meaningfully.

“Customers of this multibillion-dollar company have every right to be frustrated with DP World’s refusal to negotiate but the MUA will not be bullied by the Dubai government and nor should anybody else,” Evans said.

Container Transport Alliance Australia director Neil Chambers said his members had been forced to impose surcharges because of the costs they were incurring over the fallout of the protected action, which includes bans on loading and unloading ships.

The Maritime Union of Australia and DP World – which has a 40 per cent market share of the nation’s ports, below Patrick Corp on 41 per cent – were locked in negotiations between Tuesday and Thursday seeking to resolve the dispute that centres on pay and rostering at ports in Melbourne, Sydney, Fremantle and Brisbane.

‘It is a very competitive marketplace so the market rates [for transport costs] are highly contestable, so as a result the returns to profit margins for the transport operator is very slim,’

Neil Chambers, Container Transport Alliance Australia director

Wharfies have been on strike since October, when the former enterprise agreement expired, but the union has said it had been seeking a new deal in good faith since March, and that DP World paid its workers 17 per cent less than Patrick’s stevedores while jacking up prices for their customers by 52 per cent at the beginning of this month.

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MUA has claimed DP World is trying to ram through pay cuts, roster upheaval and undermine workplace health and safety as part of its desired changes to the former enterprise agreement.

The ports operator has accused the union of refusing to compromise on any of its 300 claims, including an effective 27.5 per cent pay rise over three years, and said the roster changes were necessary for a 24/7 economy.

DP World executive vice president in Australia Nicolaj Noes accused the union of effectively bringing trade to a standstill, and having little regard for Australian businesses.

“We have negotiated constructively and made concessions, but it’s clear the MUA is willing to inflict maximum damage to get what it wants,” he said.

“Government intervention is essential to break this deadlock. The decision of employees [encouraged by the MUA] to continue to refuse to perform their duties leading to loss of productivity is devastating the supply chain and economic output.”

The delays arising from the industrial action are flowing through the rest of the supply chain, with Australian businesses forced to either absorb, or pass on, the costs it has been incurring as a result.

“It is a very competitive marketplace so the market rates [for transport costs] are highly contestable, so as a result the returns to profit margins for the transport operator is very slim,” Chambers said.

“If they incur additional waiting times at terminals, or other costs in the supply chain to complete the task, then you can’t expect the transport operator to absorb the cost because there’s no margin for that. So it is being passed onto the customer, who is most likely [eventually] passing it onto the farmer.”

One transport operator has confirmed to this masthead it imposed a flat $100 surcharge on its customers to cover the costs it has been incurring as a result of the dispute.

Chambers said that, while there were no industry standards for the amount his members had been surcharging, operators could be charging up to $250 if trucks containing export containers were not offloaded at the dock and had to return another day, or more than $100 an hour if trucks were waiting for lengthy periods at the terminal due to delays.

“To pick up a container from Port Botany and take it to a location in western Sydney, for example, would cost about $700,” Chambers said. “If you’re adding $250 or $100 or $100 an hour, you’re adding a significant percentage to what it was costing. Effectively, it’s at least 20 to 30 per cent more expensive to handle cargo in the supply chain.”

Shipping Australia has written to federal Industrial Relations Minister Tony Burke twice asking him to use his powers under the Fair Work Act to intervene and resolve the industrial dispute, which it said was causing significant damage to the Australian economy.

The industry body said ocean shipping companies were unable to absorb the cost of the ongoing industrial action, and that container ships could cost anywhere from a few tens of US dollars per minute to up to $US250 ($370) per minute. It said the delays arising from the dispute were forcing shipping companies to reduce their service frequency and leaving ports without export containers.

The Victorian opposition is calling on the state government to use section 424 of the Fair Work Act to get the Fair Work Commission to intervene.

Roma Britnell, the spokeswoman for ports and freights, said comments made by Ports Minister Melissa Horne in December that the industrial action “had not resulted in significant disruptions to the supply chain” were false, and it was time for the government to act.

“These surcharges are a direct consequence of the ongoing chaos caused by the industrial action,” Britnell said. “The surcharges on each container exported is a significant increase, one that markets cannot absorb and will make Victorian products less competitive.”

The federal and state governments have so far refused to intervene, describing it as a private workplace matter.

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