Logistics firms raise concerns over yet another port strike

Logistics firms raise concerns over yet another port strike

Earlier this month the Maritime Union of Australia (MUA) struck a deal with Victoria International Container Terminal (VICT) for improved job security, working hours and pay rates, but disputes with other operators in the country's ports are set to put logistics and freight companies under further pressure.

The MUA has planned work stoppages involving employees at towage company Svitzer today at Melbourne and Westernport Victoria from midday to midnight.

"This targeted protected industrial action in Melbourne and Westernport will only cause further uncertainty and disruption to our colleagues, customers and stakeholders in the ports and state at a critical time when we need to keep goods moving," Svitzer Australia said in a message to customers.

"Svitzer remains committed to bargaining in good faith to secure a new enterprise agreement, which maintains high salaries and core conditions and ensures a strong, sustainable foundation to continue to provide safe, efficient, and reliable towage services."

The MUA says tug crews at the Port of Melbourne will be undertaking the legally protected industrial action to protest alleged attacks on their workplace rights and conditions by Svitzer, following two years of attempting to negotiate an enterprise agreement (EA).

They allege the company has used the COVID crisis to introduce 30 claims that would slash the rights, conditions and job security of Svitzer's Australian workforce.

"Tug crews are taking completely legal industrial action in an attempt to finally bring these long-running negotiations to a fair outcome that protects their rights and conditions from the company's attacks," MUA deputy Victorian Branch Secretary David Ball said.

"Our members continued to work throughout the COVID crisis, ensuring essential goods continued to move through Port Melbourne to the Victorian community, but they refuse to stand by while this company attacks their workplace rights," he said.

"Despite being part of a highly-profitable multinational, Svitzer Australia has been using the COVID crisis to try and push through claims that would leave local workers much worse off."

Meanwhile, MUA employees of Hutchison Ports in Sydney will meet today to vote on a new EA between the company and the union, which an MUA spokesperson says is a legal requirement ahead of lodgment with the Fair Work Commission.

DP World - one of the key players involved in a stevedore impasse with the unions in the last quarter of 2020 - managed to successfully implement an EA with its employees, while Australia's leading container terminal Patrick continues negotiations with the union.

Freight & Trade Alliance (FTA) director and co-founder Paul Zalai said essential infrastructure and gateways for international trade needed to be open for business.

"It is crazy that Protected Industrial Action can be a legal instrument by the unions to negotiate outcomes with stevedores and tug operators," Zalai said.

"Matters should be taken straight to the Fair Work Commission for independent arbitration rather than leaving importers, exporters and supply chain professionals in limbo.

"Where are our state and federal government leaders and why aren't they taking this to the FWC? They are happy to spruik free trade agreements but do nothing to help us get goods on ships. Our reputation is fast becoming that of third-world nations."

Jackson Meyer, founder and CEO of freight forwarding business Verus Global, says his company has been directly affected by industrial actions during the pandemic and expects lengthy delays due with the Victorian strike.

"The Port of Melbourne strike has resulted in significant shipping delays," Meyer says.

"Containers are taking double the amount of time to process once they hit our shores, and the impact of the local pressure will affect global markets.

"The situation is at a critical point with the Christmas end of year peak season only a couple of months away."

Meyer notes an increasing number of shipping lines are now directing their containers to be de-hired directly to nominated stevedore terminals; an inefficent process driven by the lack of capacity at empty container depots in Melbourne.

He says this has created a considerable degree of stress and additional fees for fleet operations trying to maintain delivery integrity.

"The Port of Melbourne strike has pushed container importers pricing up from an already astronomical price, brought on by the global pandemic, to an industry that is very much hurting," Meyer explains.

Meyer claims new restrictions and strict policies placed on local providers, in addition to the historically high freight levels across all global markets combined with "almost daily" local charge increases locally, mean importers are unable to retain their original selling prices and will ultimately have to pass on these costs to the customer.

"In the monopoly market of global shipping and with strong alliances, freight rates have become too lucrative to retain previously agreed contract rates on long term deals," he says.

"If contracts are not renewed, or have been partially slashed, the importer finds themselves paying up to six times as much as they initially forecasted.

"It's clear that we are now at a point where an increasing range of cargo owners quite simply will not be able to sustain their business, at the currently high freight rates, and that's a major issue for the industry."

Carlos Ferri, founder and CEO of transport, logistics and warehousing tech company Zapala Co - known for its Shipeezi supply chain management tool - says the challenges faced by the industry today all come back to capacity, underscoring the need for further port infrastructure investment.

"Everybody's exporting or importing more and they just don't have the space," he says.

"Some of the ports are increasing fees. All the people working within the chain, they think that if the ports are putting the fees up, why can't we get paid more? It's always the same reason.

"The problem is lack of capacity - the congestion of the vessels coming in, the congestion of the trucks going in to get the containers, it's just horrendous."

Ferri believes more solutions need to be brought to the table, including the spreading out of port options to avoid congestion through the cities going in and out of the ports.

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