Asciano Says Dockworkers Dispute to Delay Australian Exports, Slow Mining

Asciano Ltd. (AIO), Australia’s largest port cargo handler, said a weeklong labor dispute at three container terminals will cut its revenue, disrupt commodity shipments and may trigger delays at mining projects.

“Exporters have already been hit by the higher Australian dollar and now they’re facing seven-day delays to get their products out,” Rhianna Fursdon, a spokeswoman for Asciano’s Patrick unit, said in a telephone interview today. “The mining industry could be quite badly hit.”

The seven-day industrial action by members of the Maritime Union of Australia campaigning for higher pay will affect 26 vessels and 27,950 containers across wharves in Sydney, Brisbane and Fremantle, Asciano said in a statement today. The Melbourne- based company said it has met with the union 24 times and the parties have appeared before workplace mediator Fair Work Australia 10 times.

Australia’s economy is approaching full capacity as unemployment drops below 5 percent, spurred by hiring by resource companies that are trying to meet demand from China and India for iron ore and coal. Exports account for about one-fifth of the nation’s gross domestic product and union workers from BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, and Qantas Airways Ltd., Australia’s biggest airline, are also considering industrial action.

The union’s deputy national secretary, Mick Doleman, yesterday said Patrick has refused to allow workers to undertake their duties and have stood down the workforce. What the company calls a strike the union characterizes as a lockout.

‘Ready to Return’

“Workers are ready to return to work -- it is Patrick that is causing chaos,” Doleman said in a statement. “We call on them to allow our workers to get back on the job.”

The work stoppage will cut as much as A$8 million ($8.5 million) from Asciano’s full-year revenue and A$4 million from its earnings before interest and taxes, it said in a statement to the Australian stock exchange today. The company previously forecast on May 2 earnings before interest and taxes of A$530 million to A$540 million.

“Brisbane handles about 75 percent of Australia’s cotton exports, and there are estimates the strike will affect between A$26 million and A$50 million of those exports,” Fursdon said. “It’s also a chief beef export port to countries like Japan, China and the Middle East.”

Sydney is Australia’s major import terminal, with retailers relying on it for supplies of durable goods and fresh food, she said.

Mining Region

In Fremantle, the major container port for the main mining state of Western Australia, about 54 containers from Japan, Brazil and the U.S. with specialized tires for the mining industry have been delayed, which could lead to transport at mining sites being affected and delays at projects, Fursdon said. Other mining-equipment imports and grain-feed exports will also be affected, she said.

The dockworkers union has rejected an offer to enter conciliation and arbitration before the Fair Work Commission, Patrick said in a statement today. While the union wants a 6 percent pay raise, the company is offering a 5 percent increase with productivity targets.

Patrick says the union’s pay claim, which isn’t offset by productivity benchmarks, would cost A$32 million in the first year of a three-year agreement.

To contact the reporter on this story: Jason Scott in Perth at jscott14@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.