Australian competition watchdog ACCC has ordered the Port of Newcastle (PNO) to cut bulker fees after a complaint by chartering giant Glencore.
It ruled that Newcastle should reduce its current charge for ships entering the port to carry Glencore’s coal by around 20% to $0.61 per gt.
The port provides the only commercially viable means of exporting cargoes from the Hunter Valley region in New South Wales.
In January 2015, PNO increased the charge by about 40% to $0.69.
In November the following year, Glencore notified the ACCC of a dispute with PNO about the price increase and requested the ACCC to arbitrate.
Since then, PNO has increased the charge to its current 2018 price of $0.76 per gt.
Differences of opinion
During the arbitration, PNO submitted to ACCC that the 2018 charge for coal ships should be increased to $1.36. Glencore wanted it cut to $0.41.
The main task for the ACCC was establishing the value of assets used to provide the shipping channel service.
It had to decide whether Newcastle should be able to charge for dredging of the channel that had been undertaken or funded by users of the port.
The ACCC has now excluded these user-funded amounts from the costs that PNO could recover and determined Glencore should pay a lower price, backdated to 2016.
“PNO proposed large increases to the current price, but the ACCC found that a reduction in the price for using the shipping channel was appropriate,” ACCC commissioner Cristina Cifuentes said.
“The ACCC also determined appropriate mechanisms for future price changes, and decided on certain non-price terms and conditions of access where the parties had been unable to reach an agreement.”
Its terms and conditions of access are operative until 2031.
