Side of container ship with containers loaded.

Industry Update- October 2020

The Shipping and Logistics industry has been hit by a number of things resulting in delays to past and upcoming sailing schedules. Melbourne’s stage 3 lockdown is still in effect , ongoing border closures due to Covid-19, bad weather conditions (several Typhoons in China), vessel bunching due to missed berthing windows, vessel port omissions to try maintain schedule on the balance of a round trip voyage (resulting in many containers discharged at the wrong port which transport then has to be organised for), industrial action at several terminals in Australia, and no space at the container parks to redeliver empties which is also affecting equipment availability for Export (especially in Sydney).

Vessel Delays

Patrick Terminals released a media statement on 29th September 2020 stating that due to the Industrial Action by the Maritime Union of Australia is continuing to delay imports and exports to and from Melbourne, Sydney, Brisbane, and Fremantle. Carriers have begun omitting Sydney in an effort to avoid the terminal delays further impacting their schedules. These port omissions are seeing containers being discharged in other Australian ports and these containers then have to be freighted by rail or road at considerable cost and further delays. There are now more than 100 000 containers caught in the dispute and 38 ships being held up around Australia and en route from Asia. Melbourne will be 11 days behind schedule by Friday (2/10/20), Sydney more than three weeks, Brisbane 9 days behind, and Fremantle 3 days behind.

Industrial Action

The Martitime Union have withdrawn all industrial action at DP World Sydney effective immediately, ensuring all normal services at the terminal may resume. Additionally, the union have confirmed that they will not be taking any industrial action of any kind at The Port Botany terminal before 1 November. 

Patrick Terminals have made an urgent application to the Fair Work Commission to intervene on threatened industrial action at The Port Botany terminal, due to serious concerns about the impact it would have on an already fragile NSW supply chain. The Morrison government did intervene to support major stevedore Patrick’s urgent application to the Fair Work Commission to stop industrial action by the Maritime Union of Australia, warning the union’s behaviour during the COVID-19 recession was “simply unforgivable”.

2/10/20 – Advice from Patrick Terminals was received stating that after two days of meetings at the Fair Work Commission, the MUA announced it would immediately end industrial action at Patrick terminals in Sydney, Melbourne, Brisbane and Fremantle. Patrick Terminals will now focus its operational efforts on clearing the backlog of containers that are currently delayed as a result of the protected industrial action of the last four weeks.

During the meetings the MUA rejected a generous offer of 1.5% pay increases for each year for 4 years with no changes to their current conditions or rosters. In addition, Patrick offered to hire 50 new workers at Port Botany to help clear the backlog of containers and improve productivity and offered job guarantees with no forced
redundancies for the life of the agreement. The MUA rejected this offer.

Emergency Congestion Surcharges

Due to the ongoing congestion and industrial action at Sydney port, some shipping lines have suspended accepting bookings into Sydney and more relevant information can be found on the shipping lines websites. Further to this, several shipping lines have started introducing a Sydney Port Congestion Surcharge ranging from USD 285 – 350 per TEU.

Update from Marika Calfas (CEO NSW Ports) on Port Botany

  • As of 9/10/20 there is 1 container vessel waiting to enter Port Botany, 2 container vessels approaching the boarding ground and 6 container vessels at berth. Some vessels have changed the order of their port calls to minimise waiting time.
  • There are 4 vessels that are still scheduled to omit Port Botany, with no new omissions announced in the past week.
  • DP World Australia and Patrick Terminals have more cranes in operation and greater throughput through their terminals.
  • DP World and Hutchison are permitting shipping lines to exceed proforma window exchanges, by agreement, to assist with the evacuation of empty containers. The trade-off being a 1-2 day delay to berth at the terminal at the present time. 
  • In terms of clearing the ‘backlog’ of vessels and containers at Port Botany we understand that DP World Australia will have cleared the backlog within the next 10-14 days and Patrick Terminals is experiencing up to 21 days delay in scheduled vessel arrivals. 
  • There are containers that have been delivered, or are en-route to Port of Melbourne, and will need to be transhipped to Port Botany.  We understand that process could add up to 3-4 weeks.

Congestion Surcharges are outlined in more detail below