Shipping Australia has previously expressed concern that the Port of Melbourne could not accommodate the larger vessels that need to use the port now.
We congratulated the Port last year when their hydrodynamic studies and simulations led to their ability to take Bosphorusmax ships up the Yarra to Swanson Dock.
But large ships are already waiting for up to 48 hours to enter the port due to lack of suitable berths. The situation is only going to get worse if further improvements are not made immediately.
The Port of Melbourne has consulted with industry over a proposed tariff rebalancing which is aimed at allowing the Port to recover their investment to support larger ships. Shipping Australia has responded to that proposal with a comprehensive submission which is available here.
The requirement for the Port of Melbourne to support larger ship sizes should not have come as a surprise; it was completely predictable, and emphasised by Shipping Australia in all our pre-privatisation briefings to bidders. The opening of the widened Panama Canal in mid-2016 is the single most important factor that has changed the fundamental of ship design since the birth of containerisation. This occurred before the final sale of the port and due diligence conducted by a potential purchaser should have identified the need and factored the necessary investment costs into their purchase bid.
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The inability of the port of Melbourne to accommodate larger vessels has been seen as a shortfall of the port for at least the past 20 years. This led to the development of Webb Dock and the Government’s consideration of other options such as Hastings and Bay West as an alternate site for a container port servicing Melbourne. The current owner has argued that the existing port can meet these future requirements for the next 50 years and the Government has accepted that position. Therefore it is up to the port to deliver on the support of larger ships.
In short:
- we agree the investment to support larger ships is essential and urgent;
- this investment was foreseeable before the port was privatised, therefore it should have been taken into account in the bid price;
- accommodating bigger ships will lead to more container exchanges and more revenue for the port;
- it is also essential to extend the practical life of the port to the end of the port lease period;
- larger vessels also pay higher channel fees (which are based on GRT) thus. Additionally, larger ships are required to pay for additional escort tugs to negotiate the Yarra River and additional pilotage fees, so are already financially penalised for their size;
- larger vessel customers should not be asked to pay even more to support the longevity and profitability of the Port of Melbourne.
