AusRAIL, Market Sectors

Newcastle’s capacity balancing system scrapped

<p>Port Waratah Coal Services (PWCS) has voted to scrap its capacity balancing system (CBS) at the port of Newcastle despite a blow-out in ship queues to a level not seen in more than two years.</p> <p>A meeting of PWCS members last Friday (September 22) resolved to scrap the system a year earlier than expected after a successful 30 months that saw ship queues more than halved and demurrage significantly reduced.</p> <p>PWCS general manager Graham Davidson said in a statement this morning (Thursday, September 28) that from January 1 coal producers would no longer be subject to the quarterly production quotas.</p> <p>&#8220Producers voted to continue the CBS in 2006, but last week they voted overwhelmingly to not support the continuation of the CBS next year,&#8221 Mr Davidson said.</p> <p>&#8220As a result, PWCS customers will not have their forecast requirements for coal handling services pro-rated down to match the capacity of the coal chain.&#8221</p> <p>Mr Davidson was unavailable to answer questions on what effect the decision might have on smaller producers or to discuss how PWCS plans to manage demand without the CBS.</p> <p>PWCS introduced the system in 2004 to reduce a vessel queue that had swelled to 54 ships by limiting coal companies to specific quarterly export allocations.</p> <p>The Australian Competition and Consumer Commission (ACCC) approved the system at the time, citing the &#8220net public benefit&#8221 it would have by reducing queues and cutting costs.</p> <p>The system quickly cut average queues from 40 ships in 2003 to 15 in 2005&#4706 by lining up vessel arrivals with the coal chain’s capacity.</p> <table width="228" border="0" cellpadding="0" cellspacing="0" align="right" height="170" name="awards"> <tr> <td width="228" height="10"><div align="center">