ACCC calls for port link infrastructure reform

As truck turnaround times fall, Sims uses stevedoring report release to back peak pricing and other efficiency goals

November 7, 2013

The Australian Competition and Consumer Commission has taken up the cudgels on surface transport infrastructure reform around ports
in its latest stevedoring report.

And while there may be a third entrant to shake up the stevedoring duopoly of Patrick and DP World but the ACCC’s message remains focused on the need for competition to drive container handling prices down.

Commenting on the 15th edition of its annual Container stevedoring monitoring report, ACCC Chairman Rod Sims insists only strong competition will drive waterfront efficiency.

However, Sims has stern points to make on port road infrastructure investment, saying "an important reform task lies ahead".

The ACCC believes port expansions must be accompanied by targeted investments in road and rail connections to container terminals "if Australia is to be ready to meet all of the challenges associated with an expected doubling in the freight task over the next 20 years".

"The ACCC considers that further economic reform is required to ensure that related transport issues do not create bottlenecks in and around our growing container ports, and supports initiatives by various governments and other agencies to address these issues," Sims says.

Reforms the ACCC wants considered are:

  • heavy vehicle road provision so that the right investments in the right roads can occur;
  • better signals for exporters and importers to enable them to make better, informed decisions about ‘modal choice’ i.e. whether to use road or rail services to move containers
  • pricing mechanisms to incentivise truck operators to better use landside facilities, such as through peak period pricing, which can encourage off-peak access to terminals.

"Without these reforms, Australia risks losing the benefits of investments in capacity expansion and competition at major container ports," Sims adds.

Though volatile, truck turnaround times continue to trend downward.

On average, across all five major mainland ports, average truck turnaround times fell from 39.0 minutes in the September quarter 2007 to 30.6 minutes in the June quarter 2013.

The greatest improvement in truck turnaround times has occurred in Sydney, particularly since the December quarter 2010. At that time, turnaround times of 45.5 minutes were observed.

These fell to 35.6 minutes in the June quarter 2013 and the improvement put down to the effect of the Port Botany Landside Improvement Strategy (PBLIS).

The report notes that the trend of PBLIS penalty payments from stevedores to trucking soon after its introduction in January 2011 had reversed more recently.

In Melbourne, the deterioration in turnaround times during 2011-12 had been surmounted due to improved transit procedures and Vehicle Booking System improvements.

On stevedoring itself, in welcoming the entry of Hutchison Ports Australia in Brisbane and Sydney and the tendering process being opened in Victoria, Sims insists the sector is preparing for accelerated productivity.

"The Australian stevedoring industry is healthier than ever before," he says.

"Landmark reforms undertaken in 1998 have been instrumental in driving increased productivity on the Australian waterfront.

"The industry is now poised to benefit further; this time, competition from a third stevedore will spur the industry to become even more efficient."

The report states that, since 1998, stevedoring costs have fallen by 44 per cent in real terms.

Most of this cost saving has been passed onto shipping lines, with average prices falling by 37 per cent in real terms over the same period.

Productivity has improved, with cranes moving 29.2 containers per hour in 2012-13 compared with 19.6 in 1998-99.

Labour productivity has almost doubled, increasing from 22.4 containers per hour worked in 1998-99 to 41.1 containers per hour worked in 2012-13.

The full report can be found here.

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