Breaking the mould
HPH’ s muscling in on the Brisbane scene could have far-reaching implications for Australia’ s operations sector, as Dave MacIntyre discovers
Although HPH has only got the breakthrough in Brisbane alone – where it will take up tenancy in berths 11 and 12 at the port – the New South Wales state government has publicly supported the idea of reserving the planned third Port Botany terminal in Sydney for a “new entrant”.
HPH has already expressed interest in occupying berth space at Port Botany and the Brisbane breakthrough could put HPH in a position of strength if the Botany opportunity becomes a reality. The Brisbane move has been welcomed by Shipping Australia who approves of the increased competition. Chief executive Llew Russell says Shipping Australia has for many years advocated competition when it is commercially viable in the main container ports.
“The objective of our members is to see increased efficiency in terminal operations throughout Australia … Clearly we will be now discussing with other ports the potential for increased stevedoring competition on the basis that it is commercially viable and will lead to increased stevedoring efficiencies,”Mr Russell says.
Meanwhile, Macquarie Research Equities has warned that HPH’s success in gaining a foothold in the terminal market will deliver a blow to the value of the existing two players, particularly Toll Holdings. Toll and fellow incumbent operator DP World have so far been muted in their response, with DP World welcoming “fair competition” and Toll noting that the HPH entry would not make an impact for another five years.
However, Toll has also noted that the two existing operators will need to rethink their capital expenditure plans, based on current and future contracts, if additional competition is now to become a feature of the Australian terminal market.
The Port of Brisbane is Australia’s third-busiest container port but the fastest growing in percentage terms.Container trade for the port for July to December 2006 grew by 9.6%, or almost 37,000 teu, compared with the same period in 2005/06. Preliminary construction has already begun for the new facilities, with berth 11 expected to be operational by mid-2012 and berth 12 in mid-2014.
HPH group managing director John Meredith says the company recognises that good labour relations are key to any business success, and it is therefore committed to collective bargaining and will seek to enter into an enterprise agreement with the Maritime Union of Australia for its Brisbane operations.
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