Stevedore mega-profits raise grain grower concerns about port competition

"We need action now because we can't afford Australia to become less attractive for international shipping and the destination of last resort," GrainGrowers general manager of policy Zachary Whale said.

He said the release of the Australian Competition and Consumer Commission's Container Stevedoring Monitoring Report 2021-22 highlighted the drain our inefficient port system had on the nation's overall productivity and competitiveness.

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The ACCC report was scathing in its findings, saying the level of regulation at container ports was "not effective and the threat of further regulation in most states is not sufficiently credible to constrain container ports from exercising their market power."

Mr Whale said growers and grain exporters were being faced with ever escalating prices and logistical delays at port, while the ACCC report found that stevedores' operating profit margin was a whopping 24 per cent, up from 10pc prior to the pandemic in 2019-20.

ACCC commissioner Anna Brakey said while the ACCC had not formed a conclusive view on the drivers behind the profit gains declining competition was a key focus.

"Importers and exporters benefited from an injection of new competition at our largest ports several years ago, but we're concerned that in the past few years those gains have been eroded," Ms Brakey said.

She said the pandemic had hindered exporters' ability to switch to lower cost operators.

"Severely constrained global shipping capacity throughout the pandemic made it harder for importers and exporters to change to a different shipping service, and by implication a different stevedore, which may have weakened price competition between stevedores."

Mr Whale said it was clear that the current system was not working in the interests of Australian export industries.

"As an industry, we have been calling for change for some time."

"When government privatises critical infrastructure such as ports, the process must be done in a way that does not adversely impact competition and Australia's overall productivity and competitiveness. "The finding that price competition between stevedores at our largest ports has eroded over the last several years highlights that operators can exercise considerable market power to the detriment of exporters and importers."

He said grains, as an export-focused sector, was particularly vulnerable to inefficiencies at port.

"The simple fact is that we rely highly on Australia's ports and shipping networks to transport grain to international markets. "Skyrocketing terminal charges and protracted industrial action at ports across Australia harm our competitiveness and reputation.

"GrainGrowers believes urgent government action is long overdue. Steps must be taken before high costs, and delays at ports inflict long-term damage to our vital export industries."