Massive, truly massive, port fee hikes are on the way.
Fremantle Ports has unexpectedly announced that they have decided to punch everyone in Western Australia in the pocket. And they’re going to punch hard.
What Fremantle Ports has decided to do is just really bad news. Fremantle Ports has announced that they are imposing insanely-high fee hikes from October this year. There’s going to be a 295% plus hike in the costs of mooring, along with hikes ranging from 20% for the containers that our farmers use to export their produce, to 42% for containers of goods that Western Australians need to buy. There’s going to be double-fees on these containers too because, we don’t know, reasons?
Our members are, of course, frustrated and annoyed at this unwarranted, unjustified, unexpected, and intrusive cash-grab. Our members have already signed contracts that will they honour, so, of course, these huge Fremantle Ports’ fee hikes will affect their bottom line, and they, of course, are very upset about it – as any business would be.
But, we and our members, feel sad for ordinary everyday Western Australian businesses, and ordinary everyday Western Australian families. They’ve been doing it tough over the last few years. And because of this cash-grab decision by Fremantle Ports, the lives of Western Australians are going to get tougher.
Look, we don’t discuss commercial matters with our members. But we do know business. And we do know shipping. We can observe that when cost hikes were unexpectedly imposed on shipping in the past that such costs were eventually passed on. Any business, in any sector, would – and does – do that. It’s inevitable. And so, ultimately, Fremantle Ports’ excessive cash-grab is going to hit, and hurt, Western Australians. It will damage their quality of life and their business competitiveness too.
And for that, we are truly sad. If the shipping industry could stop it, it would. But it can’t. Fremantle Ports is government-owned and run, and it’s the only port of its kind in Western Australia. The shipping industry has no power over Fremantle Ports. The port can do what they like without regard to the interests of their customers or Western Australians.
They have made their decision to have more of everybody’s money and they will accept no dissent.
But why? And why on top of the cost-of-living pressures? Why on top of the inflation-hikes? Why on top of the recent interest rate decision that must have shocked millions of Australians? Why are they punishing Western Australians?
They are good questions and we don’t know the answers. Sure, the port has made some vague noises about needing to fund maintenance and port improvements, but they haven’t really explained in detail what they’re going to do. And they should explain because they’re a publicly-owned company. But there’s no detailed transparency because why would they if they don’t have to?
In any case, the port has been charging fees that should have been put towards maintenance for years. So why isn’t the port already up to the standard that it should be at?
Ocean shipping companies understand, probably better than most companies, that asset-heavy companies need to invest large amounts of hard cash to keep their assets up to standard. But this should be done carefully, not chaotically, in a controlled and considered way.
Fremantle Ports’ diktat is so shocking because it unexpectedly imposed massive hikes on customers out-of-the blue. Sure, Fremantle Ports will claim it engaged in consultation, but massively hiking unchallengeable fees by imperial diktat isn’t consultation, it ain’t even notification. It’s dictation. And that’s just not on. No government-run business ought to behave this way.
It’s also not on to impose huge fees on customers before the improvement’s even ready. That’s a bit like a coffee shop charging you an enormous up-front surcharge for your daily caffeine on the basis that the owner wants to buy a newer, better, machine. You just wouldn’t accept that argument. But that’s the argument that Fremantle Ports is demanding you swallow.
What they should do is ask the WA government to fund the upgrades (it is, after all, a government-run business) or borrow the cash from the international bond markets. Then they should do the upgrades, build the infrastructure, and then and only then, do the cost recovery. In that way, the customers can benefit from improved productivity.
Do the upgrade, then do the charge: that’s the fair go.
Our Western Australian countrymen, countrywomen, and business colleagues, really don’t deserve to be price gouged. Shipping Australia calls upon the WA Premier, the Hon Roger Cook, to do the right thing, the honourable thing, the kind thing, for his constituents and reign in Fremantle Ports’ outrageous price hikes.
And finally, Australia, we’ve got a problem. When it comes to hiking fees and charges, seaports across the country do what they want, when they want, how they want. They’re out of control. They charge a fortune and they don’t provide good-value-for-money. Australian seaports have been underperforming for years. They rank near the bottom for performance in the World Bank’s list of hundreds upon hundreds of global container ports every single year.
Overcharging, uncompetitive, underperforming Australian ports that do not well serve the Australian people is a systemic problem.
And so it’s time for pricing and performance at Australian seaports to be subject to rigorous Commonwealth oversight and control. We call upon the Albanese administration to enter into discussions and negotiations with their State & Territory counterparts to regulate the port sector at the Federal level.
