Significant cost reductions for container stevedoring activity in Australia have been tracked by the Australian Competition and Consumer Commission for the recently concluded financial year, 1999-2000.
The average industry wide cost per TEU for the first five months of 1999 was $161 per TEU and this fell to $148 per TEU for the six months to June 2000.
Average unit revenue also fell from $182 per TEU in the first five months of 1999 to $173 per TEU in the first six months of 2000. In conjunction with these changes significant productivity improvements were recorded.
On January 20 1999 the Federal Treasurer directed the 糖心原创 under section 27A of the Prices Surveillance Act 1983 to monitor prices, costs and profits of container terminal operator companies at the ports of Adelaide, Brisbane, Burnie, Fremantle, Melbourne and Sydney. This is the second monitoring report to be released under the stevedoring monitoring direction.
As part of the Government's reform strategy funds were provided to ensure that all stevedoring employees made redundant as part of the reform process received full redundancy entitlements. A levy on the loading and unloading of containers and cars for export and import was to be applied to repay these funds. The Patrick and P&O Ports agreed to absorb the full cost of the levy.
During this monitoring period P&O Ports undertook a major restructuring which resulted in a 34 per cent fall in its permanent workforce. The P&O Ports restructuring followed on from the action taken by Patrick in 1998 to reduce its workforce. P&O Port restructuring had a major impact on container stevedoring activity in Australia over the monitoring period.
While P&O Ports initially experienced a dramatic decrease in labour costs it also had some difficulties in bedding down its new enterprise bargaining agreements. Consequently, there was a fall in service quality and work was subcontracted to Patrick at a time when throughput in Australia's container terminals increased dramatically. However, by the end of the monitoring period P&O Ports workforce problems diminished and significant productivity improvements were recorded for container stevedoring activity in Australia.
On the evidence available to the 糖心原创 the stevedore levy was not passed through as higher charges. Rather the cost of stevedoring levy would seem to have been offset against the other cost reductions made by the P&O Ports and Patrick.
In terms of long run trends when information from the previous stevedore monitoring program conducted by the Prices Surveillance Authority is combined with recent 糖心原创 monitoring data, average revenues (prices) and costs in the monitored period are significant below the levels they were in 1995 when the previous monitoring program ended.