ACCC warning on port capacity and landside performance


The Australian Competition and Consumer Commission (ACCC) has raised the spectre of Melbourne port capacity constraints by 2015 imitating those experienced recently in Sydney. <br /><br /> It also notes that stevedores lack any incentive to improve poor performance in servicing trucks, except in Sydney under the Port Botany Landside Improvement Strategy (PBLIS). Commenting on the ACCC’s annual report on stevedoring operations, Container stevedoring monitoring report no. 13, Chairman Rod Sims urges the Victorian Government to embrace stevedoring newcomer Hutchison Port Holdings, which is due to start operations in Sydney and Brisbane in 2013.

By Rob McKay | November 3, 2011

The Australian Competition and Consumer Commission (ACCC) has raised the spectre of Melbourne port capacity constraints by 2015 imitating those experienced recently in Sydney.

It also notes that stevedores lack any incentive to improve poor performance in servicing trucks, except in Sydney under the Port Botany Landside Improvement Strategy (PBLIS).

Commenting on the ACCC’s annual report on stevedoring operations, Container stevedoring monitoring report no. 13, Chairman Rod Sims urges the Victorian Government to embrace stevedoring newcomer Hutchison Port Holdings, which is due to start operations in Sydney and Brisbane in 2013.

"Opportunities for new entry into Australian stevedoring are rare," Sims says.

"This makes them all the more important when they do arise.

"We would welcome the Victorian Government taking advantage of the need for new investment by introducing a third competitor into the port of Melbourne.

"More cranes and terminals are needed, and existing terminals need to work harder and faster.

"Expanding ports bring opportunities for greater competition.

"Competition should drive the stevedores to invest in a better service.

"This should see more containers being moved on and off ships more quickly."

The report points to uncertainty on how the Victoria’s coalition government will handle the inexorable rise in container throughput now that it has ditched the port expansion plans of its predecessor.

And it points to wider impacts of Victorian delays.

"Given the existence of national stevedoring contracts, delays in investment at one port could undermine efficiency gains at other Australian ports," the report says.

A spokesman for Ports Minister Denis Napthine says the issues are very much on the agenda.

"The Victorian Coalition Government is acutely aware of the future capacity issues at the Port of Melbourne and is actively considering a range of options to address these challenges," he tells ATN.

"Since coming in to Government, the Coalition has kept its promise to move ahead with the development of Hastings as a second international container port and is currently conducting a feasibility study on the potential relocation of the import export car trade from Webb dock to the Port of Geelong.

"The Coalition will continue to investigate further solutions to meet future port capacity in the mid to long term."

On stevedores’ interface with trucks, the report notes that PBLIS penalties are not comparable to sanctions from shipping lines for underperformance.

"Equally, there are no financial rewards available to the stevedores (including at Port Botany) for providing a faster, more efficient land-side service," the report says.

Asciano CEO John Mullen flagged that it might look to bring the expertise of its Patrick stevedoring and Pacific National rail arms to bear on intermodal issues, particularly in Sydney.

This idea was received coolly by trucking and other port-user interests who believe past practice left little room for confidence.

Meanwhile, container volumes increased 6.1 percent in the past financial year. While unit total revenues for stevedores rose 1.5 percent, costs fell 1.3 percent.

"This was the first reduction in the value of the industry’s asset base sinse 2002-03, which was just prior to a period of sustained and significant capital investment by both stevedores," the report says.

Unit margins rose 12.6 percent but, at $38 per twenty-foot equivalent unit (teu), were still below that before the global financial crisis hit in 2007-08.

Adjusted rates of return on tangible assets rose from 18.4 percent to 24.2 percent.

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