Container stevedoring monitoring report 2020-21
|Container stevedoring monitoring report 2020-21||7.48 MB|
The 2020-21 container stevedoring monitoring report presents information on the financial and operational performance of the monitored container stevedores, as well as observations regarding key developments within the sector.
Key industry insights and developments:
COVID-19 has caused major disruption. The pandemic has destabilised the global container freight supply chain, leading to delayed shipments and rapidly rising freight rates. Freight rates on key global trade routes are about 7 times higher than they were a little over a year ago. The situation is very challenging for Australian importers and exporters, as it is for businesses globally.
The supply chain was transforming even before COVID-19. The dynamics in the container industry have changed significantly over the past decade due to a number of concurrent supply chain trends. This has affected the operation of shipping lines, ports, stevedores, transport operators and empty container parks. Some of these trends will resolve themselves over time, but action is needed to address others.
Productivity has stagnated, despite substantial investment. Over the past decade, Australian stevedores have invested billions of dollars in infrastructure and more efficient equipment at Australian container terminals. However, recent studies have shown that Australian container ports are relatively inefficient and well below international best practice.
Industrial relations are hurting Australian container ports. Restrictive work practices and industrial actions have escalated over the past decade. This has contributed to the relatively poor performance of Australian ports and has caused ongoing disruptions to the entire supply chain.
Competition between stevedores has changed market dynamics. Enhanced competition between stevedores following the entry of Hutchison and VICT has led to reduced profits and increased investments in equipment and infrastructure. Over the past few years, stevedores have increased their landside charges, but they are not currently making excessive returns.
The shipping industry has been transformed. Excess shipping capacity and growth in vessel sizes have led to shipping lines consolidating, forming alliances and entering into other co-operation agreements. This has increased shipping lines’ bargaining power. Larger vessels have adversely impacted on the productivity of ports as they require investment from ports and stevedores.
Current port regulation is inadequate. Privatisation of the 4 major container ports in Australia has improved dynamism but they are currently under-regulated. The Essential Services Commission of Victoria found in 2020 that the Port of Melbourne had exercised its market power in charging land rents to port operators.