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Reforming the Waterfront: Background to the Current Debate

Reforming the Waterfront: Background to the Current Debate

Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.
Briefing Paper No. 05/1998 by Honor Figgis
The waterfront is the series of processes by which cargo is moved between land transport and ships. There are three basic kinds of cargo: containers, bulk cargo (such as coal or grain), and general or break bulk' cargo (such as timber or motor vehicles). The waterfront involves a complex series of interactions between importers, exporters, shipping companies, ship owners, port authorities, government agencies and private companies supplying port related services (such as stevedores and land transport operators) (pages 2-4).

For many years there have been concerns about the performance of the waterfront, particularly in relation to the movement of containers. The main problems that have been identified are the productivity and reliability of stevedoring, ship turnaround times, and waterfront charges (consisting of stevedoring charges, port authority charges, and government and ancillary charges). Most media attention in recent debates has focussed on the stevedoring industry, in particular the employment conditions of waterside workers and the role of the Maritime Union of Australia in the industry. Others aspects of the waterfront that are also significant to the overall objective of moving cargo as quickly and cheaply as possible include port management, port charges, land transport links, interaction between waterfront participants, and the use of technology (page 9).

Substantial gains were made in stevedoring productivity during a reform program implemented by the Federal Government from 1989 to 1992. Despite these gains, it appears that further improvements in the container and break bulk cargo areas are required for Australian to reach international best practice levels. Australia's bulk ports are among the best in the world for productivity and efficiency (pages 10-14). Australia's stevedoring charges for containers and break bulk cargo are relatively high by world standards, although they appear to be falling over recent years. Charges for bulk cargo are generally very competitive (pages 14-15). There have been continuing problems with stevedoring reliability and ship turnaround times, with findings that the timeliness and reliability of container operations in Australian ports lag well behind overseas ports. However, ship turnaround times have been declining in recent years (pages 15-17).

A number of factors have been said to contribute to the problems in the stevedoring industry, including (pages 17-21):

  • lack of competition among stevedoring companies;
  • restrictive work practices of waterside workers, such as overmanning and limits on the use of casual labour, and very generous pay and leave entitlements;
  • an industrial culture of mistrust and disputes between employers and employees, particularly in the capital cities;
  • an effective closed shop' for waterside labour giving the Maritime Union of Australia a strong influence over waterside work practices; and
  • poor management practices by stevedoring companies.

    Efficiency in cargo movement through ports may also be hindered by inadequate co-operation between waterfront participants. It has been argued that poor communication between links in the transport chain and a lack of co-ordination and co-operation affect the performance of the waterfront (pages 21-22). Port authority charges are a significant element in overall waterfront charges for cargo, accounting for around one quarter of container cargo charges. Some of these charges are levied on ship operators and some are levied on cargo owners. Port authority charges in Australia generally seem to be on a par with or higher than comparable overseas ports (pages 22-25). The capacity for competition between Australian ports is limited, because the major ports are so widely separated that shipping companies often have little choice of which port to visit. Many Australian ports have been corporatised and in some cases privatised in order to improve their efficiency and competitiveness (pages 24-25). Ancillary charges for pilots, tugs and mooring also add to the cost of moving cargo. A brief overview is given of the New Zealand reforms to waterfront labour and port authorities (pages 25-27).

    In summary, the changes implemented since 1989 have achieved substantial improvements in the stevedoring industry and port authorities, two of the most important participants in the waterfront, but these improvements have been variable. In the bulk cargo sector, Australia's waterfront is among the best in the world, but in the container and general cargo sectors, the gains have not been as impressive, and in some cases have begun to retreat. The point has been made that the essential question is whether Australia's waterfront is internationally competitive, not whether it has improved on its performance in the last decade. The results again are mixed on this question, but overall there is agreement that the waterfront must improve substantially in several aspects before it reaches its full potential (pages 27-28).