FREMANTLE: NEXT TO TAKE ON BOX DUOPOLY?

The port is believed to have made box giant MSC its preferred developer following calls for interest in the port’s berths nine and ten last year, though FP chief executive Kerry Sanderson is “unable to confirm or deny” the line’s identity.

MSC has a unique domination of Fremantle with a major relay centre in the port and up to 60% of the total throughput of 430,000TEUs in the 2002/2003 year. This could provide MSC with a stand-alone business in the port, while undermining the other two stevedores in Western Australia and threatening the national coverage which underpins the duopoly strategy of Patrick and P&O Ports.

However FP has now put the proposed terminal on ice for nine months while MSC and its existing stevedore Patrick work through what Ms Sanderson called “other ways to facilitate trade”.

It is understood that no development would take place for 12 months after the nine months was up, creating what another industry source called 21 months of uncertainty in the port.

Ms Sanderson says that Fremantle had not specifically sought a third terminal operation as Melbourne had done in its Westgate project.

The port had fielded a number of requests to use the common user facilities at berths nine and ten – the object of the proposal and Fremantle’s very first container handling site. However, before the berths could be leased out an exploratory call for other interest had to be carried out, Ms Sanderson asserts.

Six proposals were submitted in response. The port also had options of maintaining the berths as common user, where they are reasonably well-used, partially leasing them under a priority berthing scheme, or offering them as a dedicated box terminal.

She says that Fremantle’s need for a third terminal operator was “relative”. The two terminals and existing berth line were “adequate for the existing trade?but are they facilitating trade the way that is needed? We don’t say that any particular number of terminals is the right one.”

She adds that storage space and peak arrivals at some times of the week were a problem. However, other sources point out that the P&O Ports facilities in Fremantle have an overall utilisation of only 25%. “It’s leverage between a shipping line and a stevedore, and the port has panicked”, says one observer.

Local speculation is now intense. Could MSC and Patrick also take the joint venture route? Or might Patrick and P&O Ports be forced into a regional joint venture to save the remains of their Fremantle business if MSC goes solo?