Productivity Commission to review Australia’s ports system amid poor performance

Prime Minister Scott Morrison last month warned wharfies of potential government intervention due to an ongoing fight between the Maritime Union of Australia and the stevedoring company responsible for 40 per cent of containerised freight, Patricks Terminals.

In the past 18 months, the MUA has launched more than 220 industrial actions against Patrick during bargaining over union power in recruitment and staffing levels.

Treasurer Josh Frydenberg has tasked the Productivity Commission to carry out an inquiry into the efficiency and dependability of Australia’s ports and connected supply chains.

The review will examine whether domestic issues are compounding problems caused by supply chain disruptions amid surging global demand for goods since the start of the Covid-19 pandemic.

“The efficiency of Australia’s ports are vital to our economic success,” Mr Frydenberg said.

“With more than $400 billion of goods imported and exported every year, it’s critical that we lift productivity at our ports.

“The Morrison government will continue to respond to global supply chain disruptions and importantly, through this review, will consider what domestic changes can be made to improve the efficiency of our ports.”

One of the major areas to be examined will be workforce issues including industrial relations, labour supply and skills, and any structural shifts in the nature and type of work in the maritime logistics sector.

The independent review will also examine the sector’s operating model and any “structural impediments” on consumers, business and industry.

It comes after the Australian Competition and Consumer Commission’s stevedoring report for 2021 found the nation’s biggest ports operated well below international best practice.

The report found the Covid-19 pandemic had destabilised the global container freight supply chain and that rapidly rising freight rates were found to be putting intense pressure on Australian exporters and importers.

The country’s two biggest ports, Melbourne and Sydney, were in the worst 15 per cent and 10 per cent respectively out of the 351 global ports.

Sydney’s Port Botany and Adelaide were highlighted as the most inefficient.

In 2019, the median in-port time for container ships in Australia was found to be three times longer than Japan, twice as long as China, and 50 per cent longer than Singapore and New Zealand.

More than $400bn is imported and exported into Australia each year through the ports system, including more than $100bn in containerised goods.

The Productivity Commission will begin consultation in January and provide a final report in August.