The Australian Competition and Consumer Commission's sixth annual Container Stevedoring Monitoring Report, which was made public on November 15, claims that the cost reduction gains made by the stevedore bosses as a result of the 1998 waterfront dispute are being eroded by a lack of new investment at Australia's container ports.
According to the report, in the first year after the 1998 waterfront dispute labour costs totalled $88.71 per container lifted and they steadily declined to $66.34 in 2002-03. But the ACCC report says that in the year to June 30, labour costs jumped to $69.94 per container lifted — the highest level since 2001.
The report argues that the rising relative weight of labour costs is the result of Australia's national stevedoring industry reaching maximum capacity, and that this has led to rising labour costs through the need to use a higher proportion of casual labour and increasing overtime payments.
To counteract this, the ACCC is pushing for increased investment by the existing stevedore companies in infrastructure, and for examination of measures by the Howard government to aid the entry of a third national stevedoring company into the industry.
“Investment is now urgently needed to expand the capacity of the ports; either investment by existing stevedores Patrick and P&O or by the potential entry of a new third stevedore”, declared ACCC chairperson Graeme Samuels.
The ACCC's report has received a flurry of positive corporate media coverage. The focus of the coverage has been over the breakdown of profits between the stevedoring companies on the one hand and importers and exporters on the other. But the real target is the wages and conditions of wharfies, whose experience of speed-ups and increasing work intensity since 1998 has resulted in an increase in the volume of cargo moving through Australia's major ports of 10% per year over the last six years.
This increased productivity has meant that, although the amount charged for lifting a container has continued to decline, there has been an increase in the profit margin on each container lifted from $10.82 in 1998-99 to $22.82 in 2003-2004 (although the margin fell slightly in the last financial year). This has contributed to the 41.9% rise in Patrick Corporation's annual profits in the last financial year to $215.24 million.
Increased competition in the stevedoring industry would place greater pressure on waterfront companies to drive down workers' wages and speed-up operations in order to main their profitability.
Recognising the possible threat to its members' wage and conditions containing in the ACCC report's proposals, the Maritime Union of Australia (MUA), has joined the stevedoring companies in opposing the entry of a third company into the industry. MUA deputy secretary Jim Tannock told the November 16 Australian “we don't support a third operator because we don't see how it works”.
However, while a united response by Patrick, P&O and the MUA may stop the introduction of a third stevedore company, it is unlikely to stop an attempt by the stevedoring bosses to drive down workers' conditions. Chris Corrigan, Patrick CEO, is a signatory to an November 15 open letter calling on Prime Minister John Howard urging him to undertake dramatic changes to Australia's industrial relation system, including stripping back the unions rights to take strike action and to establish individual contracts as the primary means for regulating employment conditions.
Originally published in Green Left Weekly #608
Wednesday, December 1, 2004