Fletchers halts pulses and chilled exports amid port crisis

The Federal Government has been called on by the Australian Peak Shippers Association (APSA) to flex it's governing muscle and protect exporters from the surge in shipping prices, persistent congestion at ports and relentless union battles at ports in Sydney and Melbourne.

The ongoing work stoppages have slowed shipping processes at Melbourne and Sydney ports while the Maritime Union of Australia negotiates a pay rise for dock workers.

The wage war escalated on Tuesday with national stevedoring company, Patrick Terminals, requesting the industrial tribunal terminate its pay deal with 1081 of its wharfies.

During the past two years of negotiations with MUA, Patrick Terminals reported 220 instances of industrial action, including strikes.

The latest move has sent shock waves through the industry as exporters predict damaging industrial action as hundreds of wharfies continue to strike every 12 hours on Monday, Wednesday and Friday in Melbourne this month.

"Ongoing drawn out negotiations are having a negative impact on congestion and shipping liner confidence, which is reducing the amount of vessels coming to Australia and regularly omitting specific ports," FIE commodities general manager, Kurt Wilkinson said.

The union strikes are compounding an already fragile supply chain, according to Mr Wilksinson, who said importers and exporters were battling to recoup costs caused by a rise in shipping costs, with shipping lines repositioning empty containers back to China for use on more profitable trade lanes.

As a consequence, he said said the company would severely restrict exports of chickpeas, faba beans and lupins this harvest, and had stopped multiple chilled lamb contracts to the US and Europe indefinitely.

"Shipping rates are five to six times higher to the Indian subcontinent than before COVID hit, so we're not exposing our business to that risk at the moment," Mr Wilkinson said.

"(For chickpeas), bids are scarce and so farmers will have to store them on farm. We'll look for space available on vessels when margins reflect the risks we are taking, which ultimately means reduced farm-gate values."

Several grain exporters over the last 12 months have been impacted by an estimated additional freight costs of $US37.5 million collectively, according to APSA.

"Export shipping rates are sky high and space is extremely difficult to secure," he said.

It was a "silent battle that was robbing" Australian farmers of an estimated $15 a tonne on grain, while jeopardising the commercial viability of all containerised exporters and importers, he said.

"Some shipping lines during this period are now omitting Australia with multiple vessels a month because of ongoing congestion."

In a recent letter to Federal Trade Minister, Dan Tehan, APSA secretariat Paul Zalai called for industry reform, citing four exporters who paid $495,000 in double handling costs over a three week period.

"If the government is sold on the need to give shipping lines continued exemptions from the Competition and Consumer Act, then we will clearly need a federal maritime regulator to oversee proceedings to safeguard the commercial viability of Australian exporters and importers," Mr Zalai wrote.

"A critical reform is required for Australian traders to be protected from unfair pricing regimes imposed by shipping line contracted stevedores and empty container parks.

"We need these entities to negotiate rates directly with their commercial client shipping lines rather than imposing hundreds of millions of dollars in fees on transport operators held to ransom with no option to pay."