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Shipping charges under scrutiny in new ABARES report

Australia’s forestry and wood products sector is increasingly trade focused and interested in all aspects of global trade. A new report, prepared for FWPA by the Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES) assesses the availability and comparability of shipping and handling costs for export.

In addition to its descriptions of ports and their capacities, the report found that the availability of port charge and related shipping and handling costs was very patchy, across the network of Australian ports engaged in exporting wood and wood products. Significant portions of data required for an effective comparison of shipping and handling costs are not publicly available. Indeed, as many companies are aware, they can be difficult to obtain even when you use the facility regularly! 

With respect to comparability, the report also found that for similar items, the charges are very different between the ports. A good example is Tonnage charges, which varied between $0.56 and $0.96 per GRT (Gross Registered Tonne).

Of general interest, the report utilizes ACCC data based on five ports to estimate movements in port costs over 25 years. It finds that prices have fallen, but for a variety of reasons, including investment, capacity growth and increased competition. The chart below displays this detail.

ACCC estimates of stevedoring prices, nominal and real, 1998–99 to 2014–15
fig 9

The report finds that making estimations of port costs is difficult because it involves many variables, including assumptions about vessel sizes and capacities. It suggests that a survey would be useful for making a ‘point in time’ estimation of actual handling costs.

The Shipping and handling costs for Australia’s wood product exports: data availability and methodological issues report is available here.

 

Posted Date: September 28, 2016

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