As the World Bank indicates in its latest CPPI report, a timely turnaround of container ships keeps logistics costs low and ensures that ports “remain catalysts for development”.
As any good manager understands, if we want to know how a thing is performing, then we need to measure that thing. That task has been done in relation to ports because the aim of the “CPPI is to provide an objective measure of container port performance, identify global or local trends in maritime container trade efficiency, and highlight where vessel time in port could be improved”.
Australian container ports have been measured by the CPPI and have been found to be giving short-measure. What can be done about it?
Well, as the World Bank says in the report, the CPPI provides “actionable” insights into operational performance, capacity bottlenecks, resilience, traffic types, ownership, and geography.
“It enables stakeholders to identify structural inefficiencies, benchmark their performance against regional or global peers, and track the impact of external shocks or policy interventions over time,” the report says, adding that ports that have scored well over the period have “often” combined investments in digitalization, 24/7 operations, and streamlined coordination with customs and logistics partners.
It adds that “ports of all sizes can achieve performance when well-managed, with optimal crane deployment, and process efficiency”.
These are all good options to look into. But which action would be best to action?
We don’t know what we don’t know
Donald Rumsfeld, a former US Secretary of Defence, made a rather profound philosophical statement about the nature of knowledge back in February 2002. Unfortunately, he was rather unfairly pilloried for his comment, even though it was a well-known concept used in US Defence circles.
And it was this: “reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know.”
In relation to Australian container port performance, we are definitely deep into Rumsfeldian epistemology.
We know there has been a lot of investment into the Australian containerised seaport sector in recent years. We know, for all the reasons given elsewhere in this Annual Review, that the World Bank’s Container Port Performance Index is very robust, provides good actionable insight, and that criticisms of it can be dismissed. We also know that Australian container port performance is poor compared to world peers and is getting worse. We also know that the rate of increase in poor performance is slowing down. To put it simply: Australian container ports are generally getting more bad but less fast.
What we don’t know can be summarised by the word “why?”
Why? Why? Why? Why? Why?
Why did Australian container ports underperform the global average in 2024?
Why have they underperformed the global average every year since 2020?
Why is that rate of decline in performance slowing down? Does it suggest we are heading towards inefficiency maximisation?
Why is investment not boosting productivity?
Why is the Australian container port sector so resistant to criticism in comparison to other sectors that attempt to improve after receiving valuable criticism?
There’s another few things we know we don’t know. Where’s it all going to end? Is performance going to keep getting incrementally worse every year relative to the rest of the world? Will it get to the point where international trade simply cannot be serviced in Australia in good enough time at a reasonable enough cost? Will that continue to the point that ordinary everyday Australians suffer ongoing harm? Because that does appear to be where we are heading if the current trajectory continues.
This costs
Here are some more things we know. Poor port performance adds delay, burden, and expense to our imports and exports.
This costs. It costs shipping companies. It costs importers. It costs exporters. It costs ordinary everyday Australian families and businesses cold, hard, cash, because, ultimately, it is they who pick up the bill.
And when you multiply these costs up by the number of goods, ships, ports, port calls, then that is a lot of cost that you, your family, your friends, your stakeholders, and your business partners are all paying.
Everyone, everywhere, in Australia is paying a port inefficiency tax.
Unlike real taxes, we can’t even say that any money goes into improving the public good. It’s not like the monies foregone are being used to build or maintain roads, to fund kids’ education, or to help return sick Australians to good health.
There’s a word for the situation when you’re unnecessarily consuming time, effort, and resources to no great benefit. It’s “waste”. It’s just waste, pure and simple.
That waste is making Australians poorer, and their lives harder, than it otherwise would be.
And for what? Who benefits from this waste? Who benefits from this inefficiency? Who should be accountable for it? Are we moving into a period of structurally imposed, low-performance, equilibrium that delivers ongoing harm to the Australian economy and to the Australian people? Why is this being tolerated?
We need answers
Australia needs to know why our container ports perform so poorly relative to their international peers, because then, maybe, what needs to be done will become obvious.
This needs to happen because Australian containerised seaports themselves clearly cannot, or will not, tackle underperformance. They don’t even recognise or admit their underperformance despite clear evidence of it. It is therefore time to do some probing. It is time to lift the rock and see what scurries away.
Shipping Australia calls upon the Federal Government to carry out an inquiry into Australian container port productivity and inefficiency.
It is the next and most necessary step if we want Australians to prosper in a competitive world.
To do otherwise risks national decline and stagnation.
That is all.
