Tug Officers Join Deckhands in Approving Port Hedland Strikes

May 30, 2014 3:05 am ET

May 30 (Bloomberg) -- Tugboat officers at Australia’s Port Hedland joined deckhands in approving work stoppages, risking disruptions at the world’s biggest bulk export terminal that may cost suppliers $93 million a day.

The Australian Maritime Officers Union approved unlimited work stoppages ranging from 2 hours to 72 hours, the Fair Work Commission said on its website today. Members also voted for no work to be performed when on rostered days off, annual leave, long-service leave or personal leave, it said. The strike is against Teekay Shipping (Australia) Pty., which is contracted by BHP Billiton Ltd. to run tugboat operations in Port Hedland, located about 1,300 kilometers (800 miles) north of Perth.

Strikes by tugboat workers over annual leave and wages may slow iron ore exports by companies including Fortescue Metals Group Ltd. and BHP, which has estimated that disruption may cost users about A$100 million a day. Shipments through Port Hedland surged to a record in April as stockpiles in China, the biggest buyer, reached an all-time high. Prices fell to the lowest since 2012 amid forecasts for a widening global seaborne surplus as Fortescue, BHP and Vale SA boosted shipments.

“It will probably slow down the price drop, depending on how long the strike lasts,” Henry Liu, the Hong Kong-based head of commodity research at China Merchants Capital Management, said by phone. “If they do suspend operations, what they’re doing is to feed their market share to the Brazilians.”

The Maritime Union of Australia approved unlimited stoppages of 24 hours, 48 hours and seven days, the Fair Work Commission said May 12. The union said on May 22 that it will suspend taking strike action for 30 days to seek a settlement after productive discussions. A third union, the Australian Institute of Marine and Power Engineers is currently balloting members and expects ballot results from its workers on June 10.

The three unions and Teekay are set to meet in Perth in front of the Fair Work Commission on June 5, according to a spokeswoman for the commission who asked not to be identified in line with policy. A phone message left at the Australian Maritime Officers Union by Bloomberg was not returned.