Thursday, August 12, 2010

Australian Port Operator Responds To Rail Freight Handling Rate Accusations

Patrick Defend their Position on Port Botany Terminal Tariff
Shipping News Feature

AUSTRALIA – After Tuesday’s article on the problems at the Port Botany container rail facility and the proposals by Asciano subsidiary Patrick, to raise rail freight ‘window’ ‘rates, the company immediately responded to the Handy Shipping Guide with a press release illustrating their ‘at times tenuous relationship’ with Sydney Ports. For the purposes of fairness we now print this release in full.

After commencing consultation with the Australian Rail Track Corporation (ARTC), Railcorp, rail operators, Sydney Ports Corporation and the Australian Competition and Consumer Commission (ACCC) in May 2010, Patrick recently advised that it would increase rail-handling charges to cover its costs and introduce reciprocal rail performance rules for operators and Patrick.

These rules and charges would improve efficiency and productivity at the terminal which over the past 18 months has seen rail mode share at Port Botany continue to decline and rail services become so inefficient that 92% of trains do not arrive on time to the terminal, due to factors outside of Patrick’s control.

The inefficiency is immensely costly notwithstanding that Patrick maintains a rail team 24/7 to man its rail operation whether trains arrive on time, late or not at all. While labour and other rail costs have continued to rise, Patrick had only a nominal $5 per lift increase in its rail service charge to rail operators in the past nine years.

Divisional General Manager, Mr Paul Garaty said:

“With no improvement in rail mode share or rail efficiency expected in the foreseeable future, and Patrick costs continuing to rise, Patrick has no choice but to increase charges. It is unreasonable for anyone to expect Patrick to provide services without recovering its costs, no commercial entity including Sydney Ports would accept this situation.

“Sydney Ports’ assertion that shipping lines currently pay for rail handling is incorrect, shipping line charges are based on providing national stevedoring services and do not include rail handling charges at Port Botany. It is disappointing to see that Sydney Ports has once again sought the threat of stevedore regulation to solve the problem of rail underperformance and the failure to move towards their stated 40% rail mode share target.

“Sydney Ports’ costs and time would be better spent working on solutions to improve the inadequate rail links to and from the port, the development of intermodal terminals in the Western suburbs of Sydney and creating incentives for freight owners to use rail.”

Patrick has participated in the Port Botany Rail Task Force since its inception in November 2008 and has foreshadowed an increase in charges to members of this industry forum since May 2010.