Capt Richard Setchell, managing director of Australian International Container Terminals (AICTL) that is allied to Philippines stevedore International Container Terminal Services Inc, says that the opportunity to usher in a new competitor to the established duopoly will never happen again for another 20 or 30 years, so it is essential that the nettle be grasped with the Port Botany decision. “The ball is in the court of the state government and the port corporation. It is only they who can facilitate change and the extent and timing of the entry of competition. It is up to them to level the playing field and open the doors.
“The port corporations create and control the land and facilities to license out. It is they who have the responsibility to provide for the future. They need to respond to the need for change,” he tells Port Strategy in an exclusive interview.
He says a new entrant will help challenge and stimulate the existing operators to keep abreast with world trends and efficiency improvements.
Capt Setchell also rejects the idea that any Australian stevedore has to have a presence in more than one port to offer a multi-port package to carriers.
“Already several lines are using both incumbents throughout Australia. In any case, lines can answer any negotiating power of the stevedore by referring to its global contracting arrangements.”
Arguing against the notion that the Australian market was too small for a third or fourth stevedore, he says the national market of approximately 5m teu, with strong growth forecast – possibly a doubling of container numbers in another five years – was ample for more players.
“With both incumbent operators experiencing massive returns on capital invested, there is a clear need for another competitor or two. This won’t send the incumbents to the wall. It won’t cause either one to run up the white flag or put his tail between his legs and run away.
“Such growth means the impact of a third entrant on the existing terminal operators will be small – even if they respond with more modest tariffs and the accelerated introduction of more technology. The timing for change is perfect.”