A long and detailed list of disruptive industrial action has been given by the maritime union to an Australian container terminal operator. If these actions are taken at Sydney and Brisbane then it could cause huge costs and delays which will hurt the freight industries and everyday Australians.
Important freight assets
Sydney and Brisbane are two extremely important freight assets. Sydney and Brisbane between them handle about four million to 4.5 million TEU (twenty foot equivalent unit shipping containers). Australia handles roughly eight million a year.
So the union’s industrial action is aimed as disrupting ports that handle about half of Australia’s container trade. Brisbane handles about 50% of Queensland’s agricultural exports and about 95% of the state’s vehicles and shipping containers. Port Botany handles about 90% of New South Wales’ containerised freight.
Adverse effects on ocean shipping
Costs to the shipping industry will be huge. The current one-day cost for a ship (not including fuel) of 4,000 TEU ship – which is a size that frequently calls in Australia – can potentially cost over USD$101,000 A DAY (about AUD$138,900 a day)*. No shipping company can afford to bear such huge wasted costs – especially when you remember that each ship may be delayed several days by industrial action, shipping companies may be operating more than one ship and that ships may call at a strike-hit port several times. And then there are the ongoing, follow-on, costs of congestion.
SAL has been individually advised by some member lines that they have sometimes skipped Port Botany on certain services because of ongoing industrial relations matters. This causes further disruption and cost increases in the on-shore logistics industries. Cargo gets landed in sub-optimal places and there are extra costs to store it and then get it back to the right place.
Meanwhile, ongoing disruptions such as this severely hamper shipping lines’ ability to maintain the private port operator’s prescribed quarterly Load/Discharge ratio criteria, resulting in lines being unfairly slugged with a levy for port related issues that are completely outside shipping lines’ control.
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Adverse effects on logistics
Bear in mind too that the uninterrupted import / export trade accounts for about 46% of Australia’s gross domestic product. Seaborne imports and exports are part of, and drive, the logistics industries in all its forms (such as warehousing and trucking). Those industries support about 1.2 million jobs – that’s about 9 to 10% of the total Australian workforce. A disruption at the ports is therefore likely to cause a cascade of ill-effects and increased costs throughout the Australian logistics industries.
It’s a mess
Given the central and vital importance of freight, shipping and the ports, it is fair to say union-led disruption to their activities will adversely impact the lives of everyday Australians. It can really cause a lot of problems to large numbers of people who are not involved in the dispute. It’s a mess.
Shipping Australia CEO Melwyn Noronha commented: “the national economy is under pressure because of the ongoing lockdown. Many Australians are unable to work because of lockdowns. And it is now, during these times of a twin health and economic crises, the the maritime union seeks to try and cripple the waterfront? It is now that the union wants to engage in action that will adversely affect everyday Australians?
“Clearly this is a crisis for Australia’s economy, which relies on ocean shipping for over 99 per cent of all of its freight.”
“However, we continue to have severe industrial relations-induced disruption on the waterfront. Industrial relations need to be looked at as a matter of urgency by the Federal Government or disruptions will continue to persist to the detriment of all Australians, no matter who they are or where they live.
“Shipping Australia calls upon the union to exercise restraint during the COVID-19 pandemic. We also call upon the Federal Government to include a review of waterfront industrial relations”.
Further reading:
Effects of container terminal disruption
Industrial action causes widespread liner service disruption
