THE UNEVEN COMMERCIAL POWER RELATIONSHIP

There is often less attention for similar risks with regard to the landside of port operations. However, various cases suggest such attention (from policy makers, regulators and port development companies) can be appropriate in certain circumstances.

For instance, the trucking companies in Australia heavily criticise a new set of fees and rules of a container terminal operator (Patrick Terminals). They argue for ‘assistance and regulatory oversight’ to help balance the uneven commercial power relationship between landside stakeholders and stevedore companies.

This case is not alone. In fact, the issues of low service levels and/or unfavourable fees and conditions for road, rail and barge operators are widespread. As a couple of examples, in Rotterdam, the competition authority demanded a modification of barge handling processes of a large container operator, while in Georgia, the competition agency banned a newly introduced set of rules and prices for truck handling by APMT, the operator of Poti, Georgia’s largest port. In Brazil, there similarly is a huge controversy regarding the charges and conditions.

The phrase ‘uneven commercial power relationship’ will resonate with inland operators internationally. In virtually all countries, inland operators, with the exception of rail operators in some countries, are relatively small.

The call from landside operators for attention from regulators is easy to understand but given all kinds of constraints of regulators, any solution based on a ruling of a competition authority is likely to be very imperfect.

One key mechanism to secure attractive conditions and service levels to landside operators would seem to be including clauses on conditions and service levels in concession contracts. Nevertheless, this is far from standard practice among port management bodies.