The Botany blues
The State Government has launched an inquiry into the stevedores' relationship with landside logistics providers. Truckers are lining up to speak out
BY JASON WHITTAKER
The truck queues to access Sydney’s Port Botany often snake past freight forwarder Stockwell International’s Botany Road headquarters. The company is fed up with the sight.
The queues represent delay and cost. But then, at least their trucks are in the queue some days there simply aren’t enough slots in the stevedores’ vehicle booking system (VBS) to access the port at all.
Sezer Solyali is responsible for booking slots to get Stockwell’s trucks in and out of the port. He describes the mad rush each morning to secure slots two days ahead of time.
"You have a minute, a minute and a half to get as many container slots booked against everyone else in the industry. It takes about a minute and a half to complete the whole day’s booking," he says.
"We always try and move as many containers on the first day of availability, if not we go to the second and third day of availability."
The company actually pays a $20,000 annual fee for, as the company’s Director of International Operations Matt Stockwell describes it, "the privilege of having a few more slots than anyone else". It’s still not enough.
And even then, the stevedores can barely keep up. Solyali says delays of up to three or four hours are common, and deliveries are often shuffled between the two stevedores because one or the other can’t handle the intake.
The irony is if you miss out on a slot, and your container stays at the port for three days, you’re slugged with a fee "even if the slots aren’t there and people can’t go and get them," Stockwell says. "That’s where the system lets companies like ours down."
As early as Thursday morning, there were reports of backlogs of between two and four hours outside Patrick’s terminal. The delays continued throughout the day, with long queues and schedules thrown out the window.
"The infrastructure is five years behind at least, if not 10. That’s the bottom line."
Kevin Dengate, Stockwell International
New South Wales Ports Minister Joe Tripodi agrees finally there’s a problem. He’s referred the "relationship" between the Botany stevedores and transport providers to the State’s Independent Pricing and Regulatory Tribunal (IPART), which will launch a full inquiry into landside logistics at the port.
In announcing the review, Tripodi talked of "occasional tensions" between the stevedores and the some 250 independent road carriers delivering to the port. It was a carefully worded response to years of frustration from road carriers particularly, a relationship that is souring further as container volumes rise and port productivity stalls.
Tripodi quotes figures from the Australian Competition and Consumer Commission (ACCC) which show revenue from the VBS has jumped 224 percent from 2001 to 2006. And it’s not just the VBS profit margins on stevedoring in Australia are the stuff of dreams for most in corporate Australia.
The ACCC says stevedores have been receiving between a 23 and 28 percent return on assets employed two times the average return on assets gained by the hundred largest companies on the Australian Stock Exchange.
As one industry figure understates: "They’ve been going pretty good."
Meanwhile, the latest container monitoring report last November showed productivity has decreased marginally prompting the ACCC to question how the growth in container volumes will be managed.
"We want to make sure the land transport system operating to and from the port is as efficient as possible because we want to keep costs down for the families of NSW," Tripodi says. "This IPART review will also look at ways to make the system as transparent as possible."
INQUIRY LONG TIME COMING
The trucking industry has long called for action. The NSW Road Transport Association’s (NSWRTA) Hugh McMaster says the inquiry should look at the "efficiency, transparency and fairness" of the relationship between stevedores and road carriers, with particular attention on the VBS system.
"While we think there are good things about the VBS, there is room for improvement," he says.
Martin Feil knows all about the VBS. He led the successful campaign from a group of truckers CLAG, or the Container Logistics Action Group to collectively bargain with the stevedores on vehicle booking.
Feil and other CLAG members have fought for years for a more efficient system. This latest inquiry, he says, is welcome news an "open and transparent" opportunity for everyone to have their say.
"This is about everybody, including the stevedores, having the opportunity to demonstrate factually and in a concrete way, rather than just asserting things, that what they’re doing is charging a fair price for a good service," he tells Intermodal.
Feil rallies against the profits stevedores are raking in on the back of road transport operators. They can’t manage truck deliveries efficiently, they say, yet have the gall to charge late fees and storage charges if the truck doesn’t arrive. CLAG will detail a long list of complaints in its submission to the inquiry.
"Why have we got three days of free availability when that creates congestion? Why have we got Saturdays and Sundays and public holidays as days of availability when that creates congestion? And why have we got a storage rate that generated $40 million nationally … last year?" he asks.
The queues represent delay and cost. But then, at least their trucks are in the queue some days there simply aren’t enough slots in the stevedores’ vehicle booking system (VBS) to access the port at all.
Sezer Solyali is responsible for booking slots to get Stockwell’s trucks in and out of the port. He describes the mad rush each morning to secure slots two days ahead of time.
"You have a minute, a minute and a half to get as many container slots booked against everyone else in the industry. It takes about a minute and a half to complete the whole day’s booking," he says.
"We always try and move as many containers on the first day of availability, if not we go to the second and third day of availability."
The company actually pays a $20,000 annual fee for, as the company’s Director of International Operations Matt Stockwell describes it, "the privilege of having a few more slots than anyone else". It’s still not enough.
And even then, the stevedores can barely keep up. Solyali says delays of up to three or four hours are common, and deliveries are often shuffled between the two stevedores because one or the other can’t handle the intake.
The irony is if you miss out on a slot, and your container stays at the port for three days, you’re slugged with a fee "even if the slots aren’t there and people can’t go and get them," Stockwell says. "That’s where the system lets companies like ours down."
As early as Thursday morning, there were reports of backlogs of between two and four hours outside Patrick’s terminal. The delays continued throughout the day, with long queues and schedules thrown out the window.
"The infrastructure is five years behind at least, if not 10. That’s the bottom line."
Kevin Dengate, Stockwell International
New South Wales Ports Minister Joe Tripodi agrees finally there’s a problem. He’s referred the "relationship" between the Botany stevedores and transport providers to the State’s Independent Pricing and Regulatory Tribunal (IPART), which will launch a full inquiry into landside logistics at the port.
In announcing the review, Tripodi talked of "occasional tensions" between the stevedores and the some 250 independent road carriers delivering to the port. It was a carefully worded response to years of frustration from road carriers particularly, a relationship that is souring further as container volumes rise and port productivity stalls.
Tripodi quotes figures from the Australian Competition and Consumer Commission (ACCC) which show revenue from the VBS has jumped 224 percent from 2001 to 2006. And it’s not just the VBS profit margins on stevedoring in Australia are the stuff of dreams for most in corporate Australia.
The ACCC says stevedores have been receiving between a 23 and 28 percent return on assets employed two times the average return on assets gained by the hundred largest companies on the Australian Stock Exchange.
As one industry figure understates: "They’ve been going pretty good."
Meanwhile, the latest container monitoring report last November showed productivity has decreased marginally prompting the ACCC to question how the growth in container volumes will be managed.
"We want to make sure the land transport system operating to and from the port is as efficient as possible because we want to keep costs down for the families of NSW," Tripodi says. "This IPART review will also look at ways to make the system as transparent as possible."
INQUIRY LONG TIME COMING
The trucking industry has long called for action. The NSW Road Transport Association’s (NSWRTA) Hugh McMaster says the inquiry should look at the "efficiency, transparency and fairness" of the relationship between stevedores and road carriers, with particular attention on the VBS system.
"While we think there are good things about the VBS, there is room for improvement," he says.
Martin Feil knows all about the VBS. He led the successful campaign from a group of truckers CLAG, or the Container Logistics Action Group to collectively bargain with the stevedores on vehicle booking.
Feil and other CLAG members have fought for years for a more efficient system. This latest inquiry, he says, is welcome news an "open and transparent" opportunity for everyone to have their say.
"This is about everybody, including the stevedores, having the opportunity to demonstrate factually and in a concrete way, rather than just asserting things, that what they’re doing is charging a fair price for a good service," he tells Intermodal.
Feil rallies against the profits stevedores are raking in on the back of road transport operators. They can’t manage truck deliveries efficiently, they say, yet have the gall to charge late fees and storage charges if the truck doesn’t arrive. CLAG will detail a long list of complaints in its submission to the inquiry.
"Why have we got three days of free availability when that creates congestion? Why have we got Saturdays and Sundays and public holidays as days of availability when that creates congestion? And why have we got a storage rate that generated $40 million nationally … last year?" he asks.
TOLL WELCOMES INQUISITION
Publicly at least, the stevedores have welcomed the intrusion into their operations. A statement from Toll says it’s looking forward to participating in the review (rival DP World could not be reached for comment).
"A review that addresses the congestion issues at Port Botany can only be good for all stakeholders," Toll says.
"With container volumes through Port Botany expected to triple over the next 20 years, it is critical that further work is done to improve the road and rail links to and from the port."
Toll is conflicted in owning a stevedore and the main rail provider in Patrick Port Link. Tripodi has asked IPART to examine rail access as well as road transport logistics, citing "anecdotal evidence" that rail charges are "relatively too high". Toll’s spokesperson, not surprisingly, didn’t want to comment.
For operators like Stockwell International, it is also a question of infrastructure. The road and rail networks linking the port are simply not up to scratch.
"The infrastructure is five years behind at least, if not 10. That’s the bottom line," Senior Director Kevin Dengate says.
"All this road out here [Botany Road] should be four lanes, there should be clearway through, the M5 should be three lanes in each way. It’s just getting worse and worse because you’re looking at more and more containers."
At the end of the day, it’s adding cost double handling if containers can’t be delivered to their destination, overtime pay for drivers. Dengate says while the company can pass on some of that, most of the costs are ultimately absorbed.
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