Potential GeelongPort fees and charges hike raises concerns

GeelongPort was sold in November last year, to a consortium made up of US company Stonepeak and union super fund, Spirit Super.

About 44 per cent of Victoria's bulk freight - including grain and fertiliser - goes through Geelong each year.

Western Victorian Liberal MP Bev McArthur has told state parliament revenue forecasts through Geelong were expected to rise

She said she was concerned about significant cost increases, similar to those at the Port of Melbourne.

A 50-year lease over the PoM was sold in 2016 for $9.7 billion.

"Since then, Melbourne port users have been whacked with ever-increasing charges - those users being Victoria's farmers, producers, importers and exporters," Ms McArthur said.

"For example, port charges for DP Melbourne have risen 191 per cent in five years."

She said Melbourne Port Access/Infrastructure terminal fees had gone from $35 to $191 for DP Terminals, $35 to $206.70 for Patrick and at the Victorian International Container Terminal they had risen from $55 in 2018 to $201.70 in 2022.

Ms McArthur said in 2016, the access fees were $3.45 for DP Melbourne and $3.50 for Patrick.

"On top of these costs at Melbourne Port, there are additional charges including for maritime security, COVID, chain of responsibility and over/underweight [containers]," she said.

"Discussions are now being aired around rail infrastructure and electricity fees".

All fees were passed on through the supply chain, she said.

In contrast, costs at the bulk ports of Geelong and Portland rose 13 and 11 per cent respectively during the same five year period.

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Ms McArthur said global traders were not blind to the increased costs of moving product in and out of Victoria.

"To conceive that buyers will continue to pay whatever we like for our goods - including the add-on charges for port costs - is a dangerous and lazy assumption," she said.

"In this way, assuming the ports of Geelong and Portland will also keep their costs in check would be similarly wrong.

"The action I seek of the [Ports] minister (Melissa Horne) is an understanding about what she has done to ensure that the cost escalation that has hit users of the Melbourne port does not also happen at GeelongPort, with potential flow-on for Portland".

Riordan Grain Services managing director Jim Riordan said the company was a big user of Geelong.

He said he wasn't so concerned about prices rising at Geelong, as they had to compete for business with Portland.

"We can shift volume down the road somewhat if they get to expensive against the other ports," Mr Riordan said.

"You always need to have two ports to create competition, that was my argument about selling the PoM lease.

"We only have one so they can do what they want and we don't have a choice".

Victorian Farmers Federation Grains Council president Craig Henderson, said growers would be watching developments carefully.

"Looking at what's happened in Melbourne, it is of some concern - we will be monitoring what happens," Mr Henderson said.

"All we can do is watch it, and see what happens."

He said he was concerned about the steep rise in prices at the Port of Melbourne.

"It's not on, that sort of stuff - that's just a loophole in the system they have found," he said.

"It comes back to the farm gate and it's a big percentage of our net operating profits."

Crop producers faced the "double hit" of charges being levied on imports, such as fertiliser, as well as exports.

"When they put on these excess charges, they have to be passed on and it makes us less competitive on the world market," he said.

A GrainGrowers Australia spokesperson said the federal government needed to implement the Productivity Commission's recommendation for a mandatory national code on terminal charges, to be administered and enforced by the Australian Competition and Consumer Commission.

"Terminal charges at many container ports across Australia have skyrocketed over the last five years," the spokesperson said.

"For high-volume, low-price exports such as grain, these charges have a significant impact with the costs borne directly by individual growers - unless action is taken, the charges risk making Australian exports uncompetitive and efficient export-focused industries like grains will suffer long-term damage".

It comes as a Grain Producers Australia survey found more than 80 per cent of its members said cropping production costs were substantially higher than last year.

The survey found 64.6pc of respondents said input costs were the biggest challenge they faced, in managing last year's production program.

The survey also found 9.2 pc of respondents cited transport and logistics as the biggest challenge they faced in producing the crop, compared with 15.4pc for flooding and storms.

A state government spokesperson said Victoria was the nation's biggest exporter and home to some of the busiest ports in the country.

"We're continuing to work closely with exporters, importers, land transport operators and other port businesses to keep delivering the best outcomes for our ports and freight network," the spokesperson said.

Comparing changes in Port of Melbourne container terminal access charges with bulk cargo port charges at GeelongPort was not a reasonable comparison.

The charges were for different services operating in very different markets.

Increases in terminal access charges at the Port of Melbourne in recent years were wholly unrelated to any changes resulting from the long term leasing of the Port of Melbourne.