In Australia, 50 years ago there were still hundreds of small ports scattered along the coastline, concentrated on the eastern and southern parts of the country and servicing many small towns that were the product of white settlement that only occurred in the last part of the 19^th Century. 

In turn, these ports were still serviced by small vessels of strictly-traditional cargo ship design, in many cases operating scheduled services to and from major centres. In the southern state of Victoria alone there were more than a dozen ports when today there are only four, dominated by Melbourne, the country’s largest container handler with throughput of over 2.2m teu/year.

And while today’s maps show fewer but larger ports in the more populous states they also show the proliferation of ports in Western Australia, Queensland and across the north of the country as single-purpose outlets for the dry and wet bulk trades have developed.

Back in 1958, virtually every port in the nation was in public hands, owned and operated by state governments through local boards and authorities – and that remained the situation until the mid 1990s.

Then a combination of pressure for reform of inefficient government entities and state treasuries eyeing possible financial windfalls saw the trend towards corporatisation of port authorities move a further step in some states to outright sale of ports to the private sector.

In parallel, many new ports were being developed by private enterprise, most notably the major mining and oil companies. However, while the disposal of public assets such as urban transport, railways and electricity, gas and water utilities has continued into the 21^st Century, major ports remain mostly in state government hands. This looks unlikely to change after shortcomings in privatisation were spotted, not least because state governments’ ability to co-ordinate transport planning for future demands can be heavily compromised if there is no longer jurisdiction over privately-owned facilities.  

  New Zealand too has seen its spread of ports diminish, but debate is rife as to whether there should be fewer still.

Port and waterfront reform in the late 1980s provided a platform for port authorities to invest where they saw fit, without central government interference. Ports took to heart the brief to act “commercially”, but now there is a body of opinion that this perpetuates inefficiencies and over-capitalisation in New Zealand ports.

One who feels the time is ripe for change is Mark Cairns, chief executive of the Port of Tauranga, one of the country’s top two container ports which also has large exposure to bulk and breakbulk cargoes.

He says the fundamental purpose of the Port Companies Act 1988 is “to promote and improve the efficiency, economy, and performance in the management and commercial aspects of ports”.

While port sector reform, and the resulting competition since 1988, has lifted New Zealand port productivity from the bottom quartile to the upper quartile in the world, he feels that competition has been underwritten by considerable over-investment, which has driven returns to well below the cost of capital.

Mr Cairns says there may need to be a further round of port reform. “This is already embodied in Section 5 of the current Port Companies Act, which provides ‘the principal objective of every port company shall be to operate as a successful business’. Clearly this objective is not being met from a financial performance perspective, with most ports not achieving their current cost of capital, with some even having returns as low as 2%,” he says.