In recent months, the Maritime Union of Australia (MUA) and the major port operators in Australia, including DP World, Patricks and Hutchinson, have been locked in a dispute over pay rises and working conditions. As a result, several rounds of industrial actions have been organized at Australian ports which have led to severe congestion, surcharges, and delays for ocean-dependent supply chains into and out of Australia.
On September 19, port workers at Port Botany in Sydney agreed to end the strike after the DP World terminal reached an in-principle agreement with the MUA. Similarly, on October 1, the MUA temporarily suspended actions at Patrick terminals across the country until the end of the month. Waiting times for vessels at Australian ports are expected to gradually decrease as operations resume; however, further work stoppages may arise in the coming weeks and it remains unclear when the backlogs can be fully cleared.
Since July, industrial actions have been sporadically occurring at various terminals across Australia. On July 15, the MUA informed DP World Australia of its intention to resume strike actions at the four Australian terminals in Brisbane, Melbourne, Sydney, and Fremantle. The duration and dates of the work stoppages varied from terminal to terminal, but mostly included overtime bans. Similarly, workers with Patrick Terminals began a nationwide port strike at the beginning of September, banning shift extensions and overtime. While the MUA and DP World reached an in-principle agreement for three years that allowed operations to resume since September 19, no agreement has so far been reached between the MUA and Patrick Terminals. The union, however, agreed to suspend all actions until October 26 when a conciliation hearing with the Fair Work Commission is expected to take place.
The industrial actions across Australian ports have gradually led to considerable delays which have increased by 12 hours per strike day and are now expected to peak in mid-October. At Port Botany in Sydney, average waiting times for incoming vessels began to significantly increase at the end of August, with delays at all terminals averaging 4.5 days. In the following weeks, delays then continuously worsened due to a new series of industrial actions.
Currently, waiting times for vessels stand at 21.5 days on average at Patrick Terminals in Sydney, which have prompted shipping lines to divert ships to other ports in Melbourne, Brisbane, and Fremantle to avoid additional costs that can amount to USD 25,000 per day. As a result, congestion has also been reported at these ports, in particular at Patrick Terminals, due to an increased number of incoming ships.
“Congestion levels and vessel delays across Australia’s ports are expected to gradually decrease in the coming weeks following the agreement reached between the MUA and DP World,” said Neža Kričaj, Supply Chain Risk Analyst, Resilience360. “However, the potential remains high for further industrial actions at Patrick Terminals from October 26 in case no preliminary deal can be reached.”
“Companies are advised to keep abreast of the latest developments for their ports of interest and explore options to use air freight capacity for critical shipments or unloading cargo at less congested ports such as Fremantle,” she said. “Supply chain managers are also advised to monitor additional announcements by shipping companies regarding congestion charges as well as port call omissions and activate contingency plans where necessary.”https://www.resilience360.dhl.com/news/industrial-actions-at-australian-ports-cause-significant-congestion-and-delays/