Freight Rail

Container ports cheapest in decades


Increased waterfront activity has pushed stevedoring prices to their lowest level since the late 1990s, the Australian Competition and Consumer Commission says.

The information was revealed in the ACCC’s 2015-16 Container Stevedoring Monitoring Report, that gauges performance at Adelaide, Brisbane, Burnie, Fremantle, Melbourne and Sydney.

ACCC chairman Rod Sims believes the latest results reflected increased competition and more infrastructure investment.

“Increased competition has pushed average stevedoring prices to their lowest levels since monitoring commenced in 1998-99,” Mr Sims said.

“Increasing competition between stevedores should deliver cheaper imports and lower costs for exporters and will see benefits flow through the whole economy.”

The ACCC notes that Hutchison Ports Australia has established Brisbane and Sydney terminals (albeit with some workforce issues along the way) while incumbent stevedores Patricks and DPWA have been upgrading and expanding capacity.

According to the regulator, average stevedoring prices for the industry during 2015-16 fell in real terms and are at the lowest level since monitoring started, with increased competition between stevedores as they attempt to retain and/or win new shipping line customers.

The ACCC also reports that industry margins and rate of return on assets are at the lowest level recorded, while wharf productivity has remained largely unchanged at what it says are “close to record levels”.

The report contrasts with views expressed by a former competition Czar Graeme Samuel, who back in 2004 incensed the industry with reference to a “cosy duopoly” of Patricks and the old P&O Ports.

The ACCC says competition is likely to be further enhanced at Melbourne when Victoria International Container Terminal (VICT) launches Australia’s first fully automated terminal late this year, with the potential to service larger container ships.

But Mr Sims also noted challenges for both Hutchison and VICT.

“Hutchison has been operational since 2013 but is yet to attract adequate market share to match its investment in the industry,” Mr Sims said.

“It is also possible that VICT may face some issues in establishing itself when it commences operations at the Port of Melbourne at the end of 2016.”

The report notes substantial investments by new entrants there is now infrastructure in place to support a third stevedore in Australian three largest container ports, allowing for additional choice to shipping lines.

The report also notes strong productivity levels at Australian container ports.

“In 2015-16 labour productivity reached a record level while capital productivity declined slightly from its peak last year.” Mr Sims said.

The full report can be accessed here.

This article originally appeared on Rail Express affiliate site Lloyd’s List Australia.