IA identifies need for increased east-coast container capacity

Grain Central March 19, 2020

Artist’s impression of an ULCV nearing the proposed Port of Newcastle container terminal. Image: PON

INFRASTRUCTURE Australia (IA) says eastern Australian ports need increased capacity to accommodate the larger container vessels now plying some of the world’s shipping routes.

The need has been identied as one of 21 national projects in IA’s 2020 Infrastructure Priority List released last month.

IA said global shipping trends show the capacity of container ships has increased to around 20,000 twenty-foot equivalent units (TEUs), double  what Sydney can accommodate, with Melbourne limited to vessels carrying around 8000 TEUs.

“No Australian port can accommodate the larger, more energy-efficient ships carrying more than 14,000 TEUs,” the report said.

“Therefore, Australia is unable to benefit from the potential cost reductions and efficiency improvements because of its container port constraints, both wharf-side and land-side.”

IA said the need to address the shortfall in eastern Australia’s capacity has been thrown into focus by Westport in Western Australia, a development where deepwater port access was already being considered.

East-coast development could include channel deepening at existing ports, development of new port locations and enhanced land-side access infrastructure at ports.

Given the preference of shipping lines to make multiple stops on a route, a network of deepwater ports rather than a single port at a given location was likely to be required.

“This incentivises shipping lines to provide larger vessels to service Australia and maximises potential economic efficiencies.”

Newcastle eyes opportunity

The IA report said the opportunity existed to consider the development of a container port facility to accommodate the largest ships as a transhipment port for other destinations within Australia.

The Port of Newcastle is already working on a proposal for a new container terminal on the site which was once home to BHP Waratah at Mayfield.

“The data is clear – shipping lines around the world have stopped building the ships that Australia’s ports are designed to accommodate,” Port of Newcastle CEO Craig Carmody said.

Mr Carmody said constraints to existing road and rail infrastructure in handling the nation’s current and future trade volumes should also be examined.

“Australia is left unable to reap the benefits of potential cost reductions and efficiency opportunities across the supply chain because its ports are designed for ships that peaked in popularity at a time when Cathy Freeman was winning the Sydney 400 metres and the Y2K bug was the biggest threat to their operation.

“The world has moved on.”

Mr Carmody said Australian ports sometimes had to have ships turn around at the berth so containers could be stacked on both sides of the vessel.

“For a nation that moves 98 per cent of its international trade by sea, being unresponsive to these global trends leaves Australia’s competitiveness and consumers disproportionately exposed.”

The IA prioritisation announcement follows detailed analysis by Houston Kemp Economists in 2019.

Mr Carmody said Port of Newcastle was ready to build a new 2 million TEU container terminal, subject to the removal of a $100 per TEU penalty that currently applies.

The proposed development would accommodate ultra-large container vessel, and link with the NSW rail network.

“We continue to pursue productive discussions with all levels of government to achieve an outcome that unlocks $2 billion of private investment in NSW and spawns the significant associated economic benefits for our state.

“We need to get on with building this infrastructure to ensure Australia does not remain caught in an international competitiveness time-warp, and so the Hunter region and its port can diversify.”



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