Port Privatisations Threat to Australian Stevedoring?

Increased competition is delivering improvements in Australian stevedoring, according to the 16th annual container stevedoring monitoring report issued by the Australian Competition and Consumer Commission.

However, according to ACCC, there are two key risks to future performance in the industry. These risks are the potential impacts of labour outcomes and port privatisations where adequate regard is not given to promoting competition or the appropriate level of economic regulation.

“The ACCC’s concerns around port privatisations are shared by key port users Asciano and Qube, who have publicly raised concerns about the impact on port costs,” ACCC Chairman Rod Sims said.

“Business will generally operate more efficiently in private hands, however if a State Governments’ privatisation goal is to maximise the sale price, which would come at the expense of poor industry structures or inadequate regulation, this quickly becomes an effective ‘tax’ on future generations.

“The risk remains that labour outcomes or port privatisations could lead to greater costs for container stevedores, other port users, businesses, and ultimately for consumers”.

The ACCC has also identified three opportunities to improve productivity in landside connections to container ports in order to handle the expected growth in container volumes:

• reform of road provision and charging
• using pricing to allocate scarce capacity
• industry-led initiatives to improve container flows.

In 2013-14, capital and labour productivity at Australia’s container ports reached the highest levels the ACCC monitoring program has observed.

The ACCC began monitoring stevedoring in 1998-99.

Average stevedoring prices fell in 2013-14 and, in real terms, are now at one of the lowest levels recorded by the monitoring program.

Over the past two years the stevedores have also made significant investments in efficiencies and capacity, which has doubled the size of the industry’s asset base.

“The introduction of a third stevedore into Brisbane and Sydney as well as a forthcoming new operator in Melbourne is changing the dynamics of the industry. From 2017, we can expect three container stevedores to be operating at each of Australia’s three largest ports,” Mr Sims said.

Press Release