BHP Billiton drops 10-year-run with Teekay for non-unionized upstart

Port Hedland

BHP Billiton announced on Monday that it had selected Rivtow Marine to operate its entire towage fleet in Port Hedland.

Rivtow Marine, an Australian-based towage operator, displaced publicly-traded Teekay Marine which had held the contract for over a decade. Over 200 jobs at Teekay could be lost.

“We would also like to thank Teekay for their service to the users of Port Hedland over more than 10 years” said BHP Billiton Iron Ore President, Jimmy Wilson.

BHP Billiton said selection was based upon a combined criteria of safety, capability and cost-effectiveness. The Financial Review suggests Teekay may have priced itself out of the market with BHP Billiton scraping for cost savings in the brutal iron ore market. High wages of unionized tugboat workers were not sustainable.

In August last year we revealed that the Teekay unions had demanded a 38 per cent pay rise for Port Hedland tugboat workers already earning up to $390,000 a year. At those prices the company said it would struggle to remain competitive. At the time, the Australian Institute of Marine and Power Engineers – one of three unions involved on each tug – complained about our headline – 390k tugboat workers to strike for 40 per cent rise.

Rivtow will operate the 14 tugs in addition to the four tugs it currently operates in the port.

BHP highlighted the investment it is making at managing towage in the harbour.

“BHP Billiton has made a significant investment in the towage service capability in the Port. Construction on a new Tug Harbour at Hunt Point will commence shortly and we have purchased six new tugs which will join the fleet in the coming 12 months,” Wilson said.

“We have also developed additional training for tugboat operators such as the Tug master advanced training programs and we have added four Advanced Rotor Tugs and moorings."