Stoppages and blockages

While industrial unrest has been a major worry for the ports industry in both Australia and New Zealand, from an Australian perspective the biggest worry is congestion at its two largest container ports.

Shipping Australia issued figures to show that in a seven week period to October 20, 12 container carriers lost A$12.12m (US$12.07m) over 84 voyages in additional fuel costs as a result of delays waiting at the berth in Sydney's Port Botany and/or speeding up in an attempt to maintain schedule integrity.

Shipping Australia chief Llew Russell, representing the interests of overseas shipping companies, said the congestion puts “significant costs” on importers and exporters, including the need for carriers to omit both Australian and overseas port calls to recover the sailing schedule; problems with repositioning containers; restow costs owing to disrupted loading/discharge programmes and vessel bunching at ports.

These problems were compounded when carriers began charging a surcharge for operating through Sydney.

Sydney Ports Corporation believes a solution can be found by consultation with shipping lines. A working group has been formed and the port company is also working on a “performance-based, long-term” lease with stevedore Patrick.

Further options may arise with the arrival of the third stevedore at Sydney, Hutchison Port Holdings. HPH has also been appointed operator of the Enfield Intermodal Logistics Centre, located 18 kilometres from Port Botany, a key element in a network of facilities across Sydney to provide more efficient transfers of containers by train to and from Port Botany.

Congestion is also a serious issue at Melbourne, where shipping line ANL went public with its view, saying there was a “crisis in port capacity”.

“Unlike the ports of Sydney and Brisbane, which have new facilities under construction, Melbourne has yet to even announce any new short-term capacity increase or development. Let's be very clear. In our view Swanson Dock is full,” said ANL managing director John Lines.

The Australian Competition and Consumer Commission has weighed into the debate by saying capacity at the Port of Melbourne could run short by as soon as 2015.

In its annual report on stevedoring at major Australian container ports, the ACCC also took a stance on the issue of whether a third stevedore should enter the competitive mix in Melbourne, suggesting the impending arrival HPH in Sydney and Brisbane is a precedent for Melbourne to follow.

“Opportunities for new entry into Australian stevedoring are rare - this makes them all the more important when they do arise,” it said.

From the ANL perspective, Mr Lines supports plans by the Victorian government to develop the port of Hastings as an alternative to Melbourne. State Minister for Ports Dr Denis Napthine says Victoria cannot rely on one container port, as it is estimated that container throughput at the Port of Melbourne [which currently totals about 2.5m teu per year] will quadruple over the next 25 years.

Hastings is a natural deepwater port on the Mornington Peninsula about 72 kilometres south-east of Melbourne and is expected to handle over 2m teu each year when its transformation into a fully-fledged container port is completed within the next 15 years.

Looking ahead, it is not just in stevedoring that Australian ports may change shape. Infrastructure Australia's theory is that private investors looking for stable investments could be attracted to ports, and that the influx of capital would release equity to be invested elsewhere.

Q Port Holdings' move on Brisbane, which it leased to last year for 99 years, is a case in point. Subsequently, Brisbane has raised wharfage and harbour dues in line with the consumer price index, and has stated it will continue to do so each year.

However, one of the greatest areas of debate is how well (or poorly) Australia's and New Zealand's ports perform in terms of their productivity.

Traditionally, one problem has been in agreeing measures that compare apples with apples. Now, agreed yardsticks appear to have become container productivity as defined by the Australian Bureau of Infrastructure, Transport and Regional Economics in Australia (BITRE).

These were the measures used in New Zealand by the Ministry of Transport for a report on container productivity which found that Kiwi ports are at least comparable with and in some cases better than Australian and other international ports.

In comparison to Australian port data, the report found the New Zealand sector was slightly behind in terms of national-average crane rates, but ahead in terms of national-average ship and vessel rates.

Ship rates for 2010 show Tauranga top at about 65 containers per hour, Melbourne second at 60, Auckland, Otago and Lyttelton at about 55 and then all other ports (including Brisbane, Sydney and Fremantle) at between 40 and 50.

Outside the container sector, private investment is also flowing in. A trend emerging in the mineral-and-energy-rich state of West Australia is for miners to go it alone with their own port developments, to ensure their project supply chains.

The Gorgon project base at Barrow Island is a stand-out example of self-contained infrastructure, but smaller miners are also dipping into their pockets.

A case in point is in the West Pilbara where an iron ore exporting project is tracking along slowly at Anketell, with 50% stakeholder Aquila Resources getting approval by the Department of State Development following environmental assessments.

The revised proposal provides for other mining companies to participate in the port development of up to 100m tonnes per annum, which should move towards approvals for rail links towards the end of 2012.

Similarly, the Oakajee Port and Rail project envisages a 570km railway linking a new deepwater port at Oakajee with Western Australia's Mid West, and it too has got to the point of having its proposed rail corridor approved.

The heavy freight railway would be similar to other private rail infrastructure invested in by big miners such as BHP Billiton, Rio Tinto and Fortescue Metals Group in the Pilbara, and would be designed to cope with port throughout of 45m tonnes per annum rising to 75m tonnes.

However, the viability of the project is under question and at the time of writing joint venture partners Murchison Metals and Mitsubishi Metals were looking for further resolution of commercial arrangements between OPR and its foundation customers.