Logistics News

Web Dock decision kills stevedore myth

VICTL win means Hutchison fails to gain national coverage but FTA says it doesn’t matter


The idea that successful stevedore competition relies on national major-port coverage has been discounted by Victoria’s Webb Dock decision, it is claimed.

The Victorian Government has declared Philippines-based International Container Terminal Services, Inc (ICTSI) and Anglo Ports, through their Australian subsidiary, Victoria International Container Terminal Limited (VICTL), the successful bidder for the design, construction, commissioning, operation, maintenance and financing of the Port of Melbourne’s new international container terminal and empty container park at Webb Dock.

Hutchison Port Holdings had been seen as a strong contender, having landed the third stevedoring positions at Brisbane and Sydney.

The assumption has been that major-port coverage was essential in providing container shipping lines with low-cost deals on routes that have regular calls at all of them.

However, while not addressing the assumption, Victorian Ports Minister David Hodgett insists the decision will “lead to increased competition in shipping”.

Industry advocacy body Freight & Trade Alliance (FTA) backs the position, asserting that the move dispels “the previously promulgated myth” that stevedoring services are essential in all ports on the east coast.

“The market is now clearly mature and commercially scaled to sustain multiple ownerships in all ports whereas the main contrary argument for this approach a decade or more ago was the need for economies of scale within each terminal,” FTA Director Paul Zalai says.

“Shipping lines that I have engaged with share my vision and Freight & Trade Alliance’s (FTA) related advocacy to government for the need for serious change.”

“Nowhere else in the world are there examples of the same terminal company offering services across a series of ports.

“More so, individual consortium members now often insist that their vessels go to different terminals for so that a single service can support a range of alternative terminals in a single port.”

The win is significant and satisfying for ICTSI and Anglo Ports, which is headed by Chairman and CEO Richard Setchell, the former Chairman and CEO of P&O Ports worldwide, which have consistently contested port bidding processes here without success until now.

While Hodgett did not touch on what made the winner’s bid more convincing than the others, he did note the “exceptional package that addressed the commercial, environmental, community and amenity benchmarks established by the Port of Melbourne Corporation”.

“The new terminal will handle over one million standard containers each year and Victoria International Container Terminal Ltd will concentrate on promoting off peak truck movements to improve the efficiency of Victoria’s transport logistics and feed expanding supply chains,” Hodgett says.

On the social theme, ICTSI Asia-Pacific head Christian R. Gonzalez highlights social impact strategies when noting Webb Dock Container Terminal will utilise “the best-proven technologies and innovations to deliver fully-automated operations from the gate to the quayside.

“These leading edge solutions will ensure not only superior operating efficiency, but will limit the noise and light impact on surrounding communities.”

VICTL will also support community initiatives throughout the term of its operations at Webb Dock.

A particular focus of these initiatives will be children’s education and welfare in communities in and around the port. Programs will be developed as part of the as part of the Port of Melbourne’s consultation program, with which VICTL will be actively involved, it says.

Phase 1 of the terminal, to be ready for operation by the end of 2016, will have one berth of 330 meters fitted with three post-panamax ship-to-shore cranes, 23.7 hectares of yard and off-dock area with fully automated operations from the gate to the quayside to deliver an estimated capacity of 350,000 standard containers.

The terminal will be able to handle ships able to carry up to 8,000 teu (20-foot equivalent units).

Servicing the terminal will be a 10 hectare empty container park (ECP) with a working capacity of about 200,000 teu annually.

Construction of the terminal superstructure and facilities is due to start in late this year. A second phase, planned to be operational by 31 December 2017 will deliver an additional two post-panamax ship-to-shore cranes on a second 330 metre berth.

When fully developed and as required by volume growth, the 35.4 hectare terminal will have a total of six post-panamax ship-to-shore cranes on 660 meters of berth, and will be able to handle up to 1.4 million standard containers annually, with the ECP’s capacity rising to 280,000 teu.

Investment for the full development of the Webb Dock Container Terminal and the ECP is estimated at around $550 million. The new facility will create around 200 new jobs at the port.

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