Stevedore profits increase while labour productivity falls

“Industry profitability remains significantly above the average for the ASX top 200 companies and almost all overseas container operators,” said the Australian Competition and Consumer Commission in its 14th container stevedore monitoring report.

Profits were driven by higher industry earnings and a reduction in the value of the industry’s asset base, the ACCC said, adding that the industry asset base fell by 12.2% in 2011–12, largely due to a write-down by Patrick of the value of assets (mostly at Port Botany and at Melbourne) in June 2011. =

Unit costs increased by 1% to $94.30/teu – “entirely driven” by higher nominal unit labour costs, which increased by 7.5% during 2011–12 and corresponded with negotiations for enterprise bargaining agreements at terminals.

Meanwhile, labour productivity fell from 41.4 containers an hour in 2012-11 to 39.6 in 2011–12, which was described as the first “significant fall” in labour productivity since 1998-99.
Capital productivity fell from 29.2 containers per hour in 2010-11 to 29.1 in 2011-12.

Looking forward, the ACCC welcomed the addition of capacity at “most ports” and the scheduled entry of Hutchison Port Holdings in Brisbane and Sydney next year.

It also gave a warning to the market incumbents.

“Existing stevedores should be careful not to use their position to unfairly hinder a new entrant from establishing itself. Where there is any evidence of this occurring, the ACCC will use its powers to investigate and, if necessary, take enforcement action through the courts,” a spokesman said.

Editor's Note - during publication today, the Maritime Union issued a statement condemning the ACCC report as "out of touch and distorted". 

“In significant parts of its reports, the ACCC clearly doesn’t understand, or doesn't want to understand what is underway in our ports thanks in large part to our negotiations ad work with the companies," Maritime Union of Australia national secretary Paddy Crumlin said.