Carmody makes case for Newcastle container trade

Port CEO eyes changing world as ALP’s Daley pledges action, if possible, on terminals deal

Carmody makes case for Newcastle container trade
Craig Carmody


With the New South Wales election still a few months away, commentary on the state government’s ports policy has just ratcheted up.

On the obviously political front, new state opposition Leader Michael Daley has taken the government on its secret charges regime on containers through Newcastle.

"I can tell you that one of the first things I’ll do if I’m elected premier is to have a look at that contract and see if we can get out of it, because what a horrible act of disrespect and nobbling the future of Newcastle that was – all for commercial gain," Daley tells NBN News.

The intervention comes close on the heels of a state upper house move to probe the Newcastle port lease sale

Read how the Newcastle lease sale has become a parliamentary focus, here

And, in a speech to the Hunter Business Chamber infrastructure lunch, titled Future Proof: Port of Newcastle Container Terminal, Port of Newcastle CEO Craig Carmody set out its rationale for its push and, by extension, the wisdom of removing the effective cap on its maximum throughput.

A one-time executive with Svitzer, the towage subsidiary of container shipping behemoth Maersk Group, Carmody set the scene within shipping’s global context against a background of relentlessly rising containership sizes, while reminding the audience that in Australia, "97 per cent of our trade travels by sea; making us the fifth-largest shipping task in the world".

"The world is shifting from a system where many ports could handle ships of around 5,000 TEUs [twenty-foot equivalent units of containers] – to a system where there’ll be a Tier One network of Maxi ports, and daylight second," he says, adding that "Tier One will service ships over 15,000 TEUs".

He likens the global trend to the way the Airbus A380 forced airports to commit to future infrastructure.

He also notes that all the nation’s major containerports are constrained by respective geographies to road congestion and short containertrains on the landside and, in future, smaller ships.

"In a city such as Sydney, the traffic congestion is already famous – where will all the extra trucks go? Botany’s container trade will double by 2040," Carmody says.

"I didn't come here today to disparage other ports – in the four months I’ve been in this job I’ve been adamant that the plans for Port of Newcastle’s container terminal are about joining the world - not about competing with Botany.

"Australia has to be part of the global trade networks - it has to drop its parochialism and invest in scale and productivity, because the countries that accommodate the Maxi container vessels will enjoy the world’s lowest freight costs."

Without such ‘top tier’ ports, he argues, Australia’s trade will be subject to second tier, and therefore more expensive, shipping.

"And that’s something we want to remedy with a Container Terminal at Newcastle," Carmody says.

"Australia’s trade figures support our container terminal.

"In 2018, Australia’s total throughput of containers will be over 8 million.

"We’ve had an 11 per cent growth in Australian container volumes in the past 12 months.

"And we don't see our container terminal as competition for Botany – our catchment is regional New South Wales."

Carmody also contrasts the national containerport approach with that of New Zealand.

"In our part of the world, there is only one port taking container ships greater than 10,000 TEUs. It isn’t Botany, or any other Australian port.

"That port is Tauranga – a deep water port about 200 kilometres south of Auckland. This port takes vessels up to 11,500 TEUs.

"These size vessels are calling weekly at Tauranga, which means New Zealand is connected – with frequency – into China, the United States and South East Asia with lower costs of trade.

"As the size of the vessels increase, the costs come down – and businesses and households benefit. Or should I say, New Zealand businesses and households benefit."


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