Australian container volumes grow with new entrants

The container throughput of the Australian ports grew by 3.7% to 7.2 mln TEU in 2016 – 2017, the highest volume ever recorded, states the Australian Competition and Consumer Commission (ACCC) in its Container Stevedoring Monitoring report 2016-17. During this period, Sydney has overtaken Melbourne and become Australia’s largest container port.

Over the past 10 years, these two ports have been topping the rating of Australia’s container ports, with Melbourne always being a little ahead, until in 2014-15 Sydney overleapt its competitor but only to lose its crown again the following year. And now Sydney regained its spot as Australia’s #1, having handled a record 2.5 mln TEU (+4.8% to the previous year). Melbourne’s throughput was 2.4 mln TEU (+2.6%), followed by Brisbane with 1.2 mln TEU (+6.4%, the country’s largest increase due to growing Queensland’s imports and agricultural exports), Fremantle with 0.7 mln TEU (-0.4%) and Adelaide with 0.4 mln TEU (+2.9%).

Interestingly, ACCC reports that despite the increase in traffic, the ports’ stevedoring revenue slightly declined, by 1%, in 2016-17, for the second year in row. However, total revenues increased by 1.6%, largely due to revenues from other services provided by the terminals.

Revenue per TEU also continued to fall: total revenue fell 2.0% to USD 169.7 per TEU, while stevedoring revenue fell 4.5% to USD 138. 8 per TEU. This has continued a very consistent trend which now sees unit stevedoring revenue at a level which is about a quarter less than a decade ago in real terms, highlights ACCC. This is explained by the growing competition, the increasing use of 40 foot containers and the consolidation in the shipping industry, which brings larger shipping lines and alliances with greater bargaining power.

According to Australia’s competition regulator, DP World and Patrick Terminals continue to dominate the nation’s stevedoring market, holding 45% and 44% market shares accordingly. Traditionally, they shared the market evenly in all container ports other than at Adelaide, where DP World Adelaide and later Flinders Adelaide have operated the only terminal. However, with Hutchison starting operations at Brisbane in January 2013 and at Sydney in November 2013 and with ICTSI completing its fully automated Victoria International Container Terminal (VICT) at Melbourne in December 2016, there are now 3 competing stevedores at each of the 3 largest container ports in Australia and the combined share of DP World and Patrick is starting to decrease, this year it was the lowest ever recorded.

Australia is serviced on smaller, the North-South routes, with smaller trade volumes and ships. However, the cascading effect is already observed here. Thus, the average size of container ships calling the Port of Melbourne has grown by 4.5% per annum over the last 14 years, so now the typical vessel at the port has the capacity of 3,892 TEU. The largest container ship to call at an Australian port was the Seroja Enam of 8,530 TEU operated by Maersk Line, which called Port Botany in November 2016. The largest ships to visit Melbourne and Adelaide are a little under 8,000 TEU.

Still, a 2015 survey of shipping lines by Shipping Australia suggested a significant number of 8,000+ TEU vessels would visit Australia within the next five years if they were able to dock at the major container ports.

Julia Louppova:
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