Burnie to be international port by 2017

By: Rob McKay

Coastal Shipping Act reform seen as catalyst for Tasmanian economic growth and more trade

Burnie to be international port by 2017
DP World's Brian Gillespie, left, with Tasports' Paul Weedon at the Port of Burnie.

A deal has been struck between stevedore DP World Australia and the Tasmanian Ports Corporation (Tasports) to bring an international container terminal to the Port of Burnie in the north-west of the state.

Announcing the agreement, which remains dependant on the Coastal Shipping Act 2015 passing in the federal parliament, the parties believe ships can begin entering the port in early 2017 and save locals over 40 per cent in freight costs to key destinations.

DP World Australia chief corporate development officer Brian Gillespie says his shipping line customers have already concluded it was time to renew international calls to the island state and that the move follows more broad discussions between the two organisations over the past year.

"We’ve had good conversations with two or three of our shipping line customers, we even got down to looking at particular services that could divert or extend into Tasmania," Gillespie says.

"We looked at vessel profiles because this thing has got to be practical – people have got to want to actually use the terminal and the vessels have to get in and out.

"We’re not at the stage of signing any commercial contracts. There is quite a lot of engineering work that needs to be done before ‘go/no go’."

Though DP World was yet to have a concrete view on the issue of larger ships being sent to Australian ports as still larger ones are used in the northern hemisphere, planning would look to future-proof Burnie in the face of this so-called ‘cascading’ effect.

While the Burnie move might affect DP World’s Melbourne operations, Gillespie believes that aspect can be handled.

"The way I see it, about 40 per cent of Tasmanian import and export freight comes from or has a destination in Victoria anyway," he says.

"What we’re hoping is that with this quite significant tariff reduction that we can offer that it actually does stimulate trade.

"If you look at our forecasts, in the medium to long term, I don’t think it’s really material to Melbourne, one way or the other."

Gillespie says his firm is yet to study what Swire Shipping’s proposed Hobart calls might mean for Burnie throughput but insists that, with 450,000 20-foot equivalent units (TEU) worth of containers being handled and the likelihood of more to come, Burnie’s future is in good shape.

He also notes that this figure is more than for regional port with lower numbers that do have international calls.

In support of the plan, the agreeing parties say that, from 2017, the price of exporting a 20-foot container to Shanghai would drop from $2,750 to $1,350; a trip to Los Angeles would fall from $4,000 to $2,700; shipping to Sydney would halve to $1,400; and the price of a container to Brisbane would be reduced by $2,000, costing $1,700.

Under the proposed Coastal Shipping Act changes, expected to be sorted next week, international shipping vessels would be able to compete in the domestic freight volume market against mainland road and rail operators.

According to DP World and Tasports, this would both draw shipping line to the state and mean Tasmanian producers and industries could utilise the upcoming Free Trade Agreement with China and the Trans-Pacific Partnership.

Tasports CEO Paul Weedon says the planned $20 million staged development in Burnie will open the port to a new capacity and major markets around the globe.

"Tasports will work with DP World Australia to investigate the supporting port infrastructure requirements including channels, berth capacity and enhancements to navigational aids and technology," Weedon says.

"Once fully developed, the new container terminal is planned to handle the equivalent of 200,000 TEU per annum."

Under the deal, DP World’s investment would include the refurbishing of the existing ship-to-shore crane; constructing a ship-to-shore crane; developing a container yard; integrating the yard with the existing rail terminal; and providing yard container handling equipment.

For DP World, the next 12-14 months will be taken up with infrastructure and equipment engineering work, with Gillespie saying the existing crane is "quite serviceable".

You can also follow our updates by joining our LinkedIn group or liking us on Facebook