Could a third stevedore reduce long-term competition in Sydney?
As Port Botany's third terminal expansion project moves into its dredging phase, debate about the potential flow-on effects of introducing a third stevedore into the Sydney container scene has taken some interesting turns.
Proof came from NSW Ports Minister Joe Tripodi who announced that further regulatory control is in the offing.
"We want to help reduce costs and improve the reliability of cargo movements between warehouses and the port. Major leases such as those with our stevedores need to reinforce and support the Government's policy goals," he said.
On the other hand, Patrick and DP World argue that the competitive tension is right with only two major players in the stevedoring market. Their argument is that stevedoring is a capital-intensive business that requires companies to get a commercial return on capital employed.
Two's company in such a market as Sydney, they say. Three's a crowd, with all three players suffering reduced returns and having to seriously question future levels of investment, given that probable returns will be reduced. How will this play out?
The smart money is on a third operator getting the entree to Sydney, and Hutchison is the bookies' favourite. Having gained a foothold in Brisbane, it is imperative Hutchison also gains a place in Sydney, in order to offer multi-port deals to shipping lines. But this begs a question - if Hutchison or another player comes into Sydney, they will have the most modern equipment, working a new terminal with rail links and efficient multimodal access.
The two incumbents will have what they have now. In open competition, who will be able to survive long-term - the new guys or the old hands? If one is to fail, chances are it will be one of the old hands - and then Sydney, for all its efforts to promote competition, will be back to a status quo of two stevedores.
We are looking for an experienced Sales Executive to join our award winning B2B media company. Merc... Read more
Applicants are invited to apply for the position of Marine Pilot within the Marine Department, based... Read more
ABP is the UK's leading port operator, with a unique network of 21 ports across England, Scotland an... Read more