A touch of spice down under

Will Melbourne experiment with its concessioning ingredients?
Will Melbourne experiment with its concessioning ingredients?
Will Melbourne experiment with its concessioning ingredients?
Will Melbourne experiment with its concessioning ingredients?
Industry Database

The Port of Melbourne Corp has published the names of the four parties short-listed for “the right to operate the third international container terminal at the Port of Melbourne".

A consortium comprised of CMA CGM - ANL Container Line Pty Ltd and Macquarie Specialised Asset Management Limited; International Container Terminal Services Inc. and Anglo Ports Pty Ltd; Hutchison Port Holdings; and Qube Holdings Limited all made the grade.

This has served to create a fair amount of speculation as to who is in pole position to win the concession with Hutchison Port Holdings being widely identified as the favourite candidate. The general view is that this will give HPH the third terminal it needs to compete on an equal footing with the two existing stevedoring groups who operate terminals in Brisbane, Botany Bay and Melbourne.

Both these parties offer contracts to shipping lines based on multi-port calls and theoretically HPH is at a disadvantage by not being able to do so – i.e. without a Melbourne terminal which allows it to do this.  But is this sort of thinking applicable in today’s world? Is the Port of Melbourne Corp looking beyond what has happened in the past and seeing the potential for introducing a new dimension to competition on the Australian waterfront?

There is no guarantee that a third force, able to compete on an even footing with the two existing incumbents – DP World and Patricks - will prompt a more intensely competitive climate. It may just deliver more of the same.

Conversely, it is possible to see a stand-alone stevedoring entity – deploying new generation technology on the terminal – as being a much greater catalyst to delivering real competition. By its very nature such an entity would have a vastly different competitive profile from the two parties now operating terminals in Brisbane, Botany and Melbourne. Also, the appointment of a stevedore other than HPH to operate the new Melbourne container terminal would leave HPH to ‘bat’ outside the existing order – further stimulating competition.


Fresh thinking

This would also represent a move away from the practice of cross-subsidisation between terminals, a practice that does not serve the interest of the Melbourne and Botany Bay ports and which serves to keep tariffs high across-the-board. Without the need to cross subsidise terminals handling less volume then it is feasible that port users in Melbourne and Sydney may feel the benefit of lower rates. This, in turn, may attract more volume including volume from beyond the borders of  traditional port hinterlands.

Whether there is actually a real need to cross-subsidise between terminals is another issue. Is it just an excuse to keep rates high? Either way appointing a stevedore that does not ‘play in this game’ would bring about a fundamental change in the competitive climate.

Overall, the container volume generated by the port of Melbourne’s market today is a big plus when considering a standalone container stevedoring operation; its size facilitates such a change. Today the port of Melbourne handles in the order of 2.6m containers annually.

Promoting intra-port competition is of course only one of a range of factors in assessing a bid. It will nevertheless be interesting to see how it enters into the Port of Melbourne Corp’s thinking.


Taylor Machine Works, Inc. Introduces the Battery Electric ZLC Series

Taylor Machine Works, Inc. is proud to announce the release of the ZLC Series. Read more

Bruks Siwertell’s proven technology and delivery capabilities secures new ship loader contract from Martin Operating Partnership

Bruks Siwertell’s proven technology and delivery capabilities secures new ship loader contract from ... Read more

Crane with lifting cantilever for Dutch customer

Kuenz recently delivered a rail-mounted container crane to the Netherlands that features a lifting c... Read more

Taylor’s New Focus on International Markets

Taylor is proud to announce a new focus on the International markets for heavy industrial lift equip... Read more

Subsequent order for ShibataFenderTeam for Phase II of Aqaba Container Terminal, Jordan

The Aqaba Container Terminal (ACT) is the only container port in Jordan and the primary trade gatewa... Read more

Terminal Intermodale Venezia Goes Live with Navis N4 Terminal Operating System

Terminal Intermodale Venezia (TIV), part of Hili Company, has gone live with Navis N4 TOS. On Sunday... Read more

View all