Joe Tripodi loved the idea of competition on the waterfront. So much so he told ChainMail a couple of years
Joe Tripodi loved the idea of competition on the waterfront. So much so he told ChainMail a couple of years back he would exclude the existing duopoly of Patrick and DP World from tendering for new berthing space at Port Botany.
But Joe has had a change of heart. The incumbents can tender after all, he now tells ChainMail, because the Sydney Ports Corporation “felt it would be best” to open the process to all stevedores.
What prompted the back flip? Was it the threat of legal action from the incumbents, who jealously guard their turf and insist a third player will drive down productivity-enhancing investment on the waterfront? And is the tender process now a complete sham, with existing players told they can tender but will eventually be excluded from the process in the name of competition anyway?
More importantly, what does it mean for the supply chain? The decision will reignite the competition debate: as more of the manufacturing task is outsourced, and the resulting waterfront import task grows, is a third terminal operator in the best interests of the chain from a cost and efficiency standpoint?
Greater competitive tension on the waterfront (a third player will also be installed at the Port of Brisbane) has to, in theory, have some downward pressure on rates and container delivery times. But with a new, fledgling operator only set up in one, perhaps two ports there are serious concerns the lack of an Australian coastal network will negate any benefit for both terminal operator and customers.
For increasingly globalised supply chain operators handling greater volumes than ever, it’s an important and timely debate.
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