ACCC wants more competition among stevedores

ACCC wants more stevedoring competition as new report supports more terminals and reveals trucking operators are being ignored by stevedores

By Brad Gardner

Governments are being urged to promote stevedoring competition as a new report argues for more terminals and reveals trucking operators are being ignored by stevedores.

The Australian Competition and Consumer Commission’s (ACCC) latest monitoring report says stevedores in the last 10 years have become more efficient and productive than ever before. As well as increasing container throughout, the report says unit costs and stevedoring charges have dropped while technology and industry profitability has increased.

But by constructing new terminals and encouraging new entrants, the ACCC believes more can be achieved.

"Increased competition from a new entrant would be expected to put more pressure on incumbents to make efficiency gains," the report says.

The report also shows stevedores are focussed more on the shipping line than landside efficiencies, which leads to higher costs to the transport supply chain.

It says stevedores base resource and labour allocation on their obligations to the shipping line, which overrides any consideration to trucking operators.

"The costs to a shipping line and the costs borne by the stevedores of delaying a ship are extremely high compared to the costs of trucks queuing outside a terminal," the report claims.

Although advocating greater competition, the report it is unclear what the cost impact will be by breaking DP World’s and Patrick’s grip on Australia’s ports.

However, ACCC Chairman Graeme Samuel says governments must not settle "for the convenience of the current duopoly" and instead look at the benefits of promoting greater competition.

"While the ports of Sydney and Brisbane have forged ahead, Melbourne—our largest port—is lagging behind, with a third container terminal not due to commence operation until around 2017," Samuel says.

"Any unnecessary delays in establishing additional container terminal facilities could result in lost opportunities for greater competition," Samuel says.

Brisbane and Sydney expect their new terminals to be operating by 2012.

According to the report, TEU volumes at Brisbane, Melbourne, Fremantle, Adelaide and Sydney are forecast to be around 9.9 million, which is an increase of about 70 percent on today’s levels.

While saying it is foreseeable some industry initiatives to improve landside efficiency may involve cooperation, the ACCC says "this may raise trade practices concerns" in some cases.

The report recommends participants to consult the ACCC before implementing any initiatives to ensure no breaches are made.

The monitoring report is carried out each year, which looks at prices, costs and profits of container terminal operator companies at the nation’s five biggest ports.

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