Port of Melbourne dispute adding hundreds of dollars to export costs

Riordan Grain Services manager Mark Lewis said industrial action by the Maritime Workers Union strike at stevedore DP World, was becoming a major issue for the flow of agricultural products through the container ports.

It came on the back of significant landside cost increases, incurred by both importers and exporters since the government sale of the Port of Melbourne in 2016.

"As exporters of agricultural products via the Port of Melbourne we have been left with no option but to pass on the landside costs back to the growers in the price we can pay for their grain," Mr Lewis said.

"The cost for us to export using containers is $20 per metric ton (pmt) higher than using bulk export channels - a $20pmt increase since the sale."

Since October 1, the MUA has told members to take part in legal industrial action ranging from refusing overtime to not unloading trucks. It is negotiating a new pay deal with DP World.

Mr Lewis said the industrial action was adding costs, due to last minute changes to shipping schedules and associated costs for holding loaded containers, together with additional freight, lifts, booking fees and delayed payments.

"These additional costs being incurred are between $200-300 per container depending on the timing, and with 22-25 metric tonne of product per container they are adding up," he said.

"As a rough guide a container of ASW wheat is currently trading around $410pmt loaded in the container and delivered to Melbourne wharf, so these additional costs because of the strike represent between 2-5 per cent of the value of the product loaded in the container.

Economic analysis of the Maritime Union of Australia's industrial action showed it had cost the Australian economy more than $1.34 billion since October, DP World Corporate Affairs senior director Blake Tierney said.

"Key industries like meat, agriculture, retail and logistics are being severely impacted through millions in lost sales, spoiled produce and supply chain issues," Mr Tierney said.

Freight & Trade Alliance director Paul Zalai joined DP World in calling for federal government intervention.

"The dispute is having devastating financial impacts on exporters and importers and is causing serious reputational harm to Australia as a viable trading nation," Mr Zalai said.

The biggest impact was on exporters, he said.

"Shipping lines are charging additional fees due to the industrial action and are not able to help mitigate delays by offering alternate services, particularly to Asian destinations," he said.

"The lack of predictability of shipping schedule is also seeing many exporters, who rail from regional centres direct to the wharves, now moving and storing their loaded containers at nearby port facilities."

This was adding transit delays, double-handling costs and additional truck movements, Mr Zalai said.

"Trains often operate on a 'take or pay' method, meaning you either use the slot or pay for it anyway," he said.

"The decision for our regional exporters then becomes whether to double handle the container at the port and pay for storage or pay for the empty train slot and rail it again the following week."

Mr Zalai said the FTA had not yet had a response from the federal government.

He said members were "hammering" the FTA, letting it know the impact of the dispute.

"We just want the issue resolved," he said.

"We are not siding with the unions, or the employer, we just need business continuity and to have our wharves open.

"The government is very proud to talk about free trade agreements, trade liberalisation and having a better relationship with China, which is all fantastic and very important, but I think it counts for nothing if we can't get our boxes (containers) on and off ships."

Late last month, the MUA accused DP World of walking away from negotiations citing its white-collar shutdown throughout summer.

"Dubai Ports' (DP World) management team dragged their feet and failed to settle an in-principle agreement during six days of facilitated bargaining," the MUA's assistant national secretary Adrian Evans said.

The union flagged if DP World "could not be bothered" to participate in bargaining, before the beginning of the second month of 2024, the program of protected industrial action would recommence.

Mr Tierney said the MUA appeared to be focused on economically destructive tactics rather than bargaining.

The federal government has been contacted for comment.