The Australian Competition and Consumer Commission (ACCC)
recently issued its Container Stevedoring Monitoring Program Report
This is the 10th report of the Monitoring Program under which
the ACCC monitors the prices, costs and profits of container
terminal operators at a number of specified ports in Australia, and
reports its findings to the Minister.
In its 2008 Report, the ACCC notes that "Australian
stevedoring is more efficient and productive than ever before. The
number of containers processed through Australian terminals has
risen significantly. At the same time, the cost of using
stevedoring services has fallen in real terms. Stevedoring
businesses have become increasingly efficient and
The ACCC nevertheless goes on to note that "the Australian
stevedoring industry has essentially remained a duopoly, with
attempts by competitors to enter it being rare and unsuccessful ...
As demand for stevedoring services is expected to grow over the
next decade, opportunities for greater competition, by way of new
entry, are likely to arise".
The Report identifies 2 main areas which might give rise to
those opportunities: capacity expansion and land-side
Almost all of the major container ports in Australia are due to
expand capacity over the coming decade, through a mix of investment
in existing terminals as well as the commissioning of new container
Brisbane: 2 new container berths to be constructed and
operated under a 42-year lease with Hutchison Port Holdings, the
first being due to be operational in mid-2012.
Sydney: The international tender process for the new
terminal at Port Botany is underway, with construction due to be
completed by 2011 and available for trade in 2012.
Melbourne: Port of Melbourne Corporation recently
outlined its 2035 strategy, which involves maximising the
productivity of existing infrastructure at Swanson Dock, and
potentially developing additional facilities at Webb Dock before
Swanson Dock reaches capacity in around 2017.
As the ACCC notes, "these expansions create important new
opportunities for new entry into Australian stevedoring ... More
intense levels of competition, facilitated by new entry, could
result in greater pass-through of the efficiencies that have been
garnered by the stevedores, with the benefits being more broadly
distributed to users and the wider community that rely on the
movement of goods into and out of Australian ports".
The key issue here is improving the efficiency of port access to
ease congestion and accommodate increasing trade volume.
The Report repeats the IPART observation that the service
provided by stevedores on the land-side does not operate in a truly
"competitive market", in that once the containers are on
the wharf, each stevedore effectively becomes a monopolist. That
is, the land-side transport operator must deal with that stevedore
if it is to take delivery of a particular container.
Nevertheless, stevedores have "an overall commercial
interest in maintaining a certain degree of land-side efficiency
within the terminal gate". This is based on the need to
efficiently move containers into and out of the terminal in order
to meet the volume demand, and to manage stack densities.
Trade practices concerns may arise, where industry initiatives
to improve efficiency involve cooperation, coordination and
agreement between potential competitors. Parties in the supply
chain will increasingly explore legal remedies in relation to
questions of infrastructure access, competition, and horizontal and
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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