Gateways to growth
The efficiency level of Australia’s ports will be crucial as we emerge from the COVID-19 recession.
Maintaining efficiency and productivity through Australia’s ports will allow the nation’s trade to continue to flow as it emerges from the COVID-19 recession.
More than 98 per cent of Australia’s international trade products pass through the nation’s ports — worth more than $1.2bn each day — making the infrastructure a critical element in the economy and its future recovery.
Ports Australia chief executive Mike Gallacher says the importance of ports achieved wider recognition during the early days of the COVID-19 pandemic, when the supply chain allowed continued trade despite peak demand.
“We saw ourselves as the enablers,” he says. “The supply chain had the country’s back. We had access to the resources that we needed, we had access to imports and we were committed to getting the job done.
“From the stevedore unpacking the ship to the store worker packing the shelves at Coles or Woolworths in Kempsey and Taree and everywhere else around the country, we got the job done.”
Ports facilitate the safe arrival of fuel supplies, allow our essential mining and agricultural exports, and bring in the electrical, building products and industrial items and products Australians buy from the shopfronts every day.
Last year that included imports of more than 100 million mass tonnes of bulk cargo and 1.28m motor vehicles. More than 1430m mass tonnes of exports went through the ports as well as 4.5 million Twenty-foot Equivalent Units (or TEUs, the standard measurement of a container).
As the gateway to the island nation, trade through our ports tells a story of 2020.
Imports from China initially fell as COVID-19 spread. Then the volume of food and drinks arriving through Sydney’s Port Botany — which supplies almost all NSW’s container trade — increased 6.9 per cent compared to last year as Australians stockpiled pasta, rice and canned goods.
From February to July cleaning product use was up, meaning chemical imports rose 26 per cent. Bulk liquid acetone imports jumped 8.4 per cent to make hand sanitiser and bulk liquid ethanol exports also grew 4 per cent as people drank more alcohol in global lockdown periods.
Medical equipment imports were up 22 per cent.
More goods required transport, so diesel fuel volumes were up 9.3 per cent; but everyday Australians went out less so unleaded petrol imports were down 10.6 per cent.
And throughout it all, ports, shipping and supply chain workers continued to allow the products to get through, ultimately to Australians’ homes and businesses.
At the Port of Melbourne, chief executive Brendan Bourke says the port and supply chain businesses created COVID-safe plans quickly and effectively, allowing ongoing operations throughout Victoria’s ongoing stage four restrictions.
“Most of the businesses from day one have had COVID-safe plans in place,” he says.
“Particularly for the critical functions of those on the maritime side, in shipping, there were good practices put in place from day one. Those practices have been shown to be very effective.”
Bourke says the ports have done the “heavy lifting” of trade this year. They will continue to contribute to the Victorian and wider Australian economy.
Having invested about $280m during the past five years in upgrades and developments, the Port of Melbourne remains committed to its 30-year strategy to enable growth and future market requirements.
Plans are under way to connect to the future Inland Rail, while modifying the port for new ship requirements, and expanding container capacity to meet forecast demand at the end of the decade. Growth of 3.5 per cent year on year is forecast.
“For us, it’s doing as much as we can to invest,” Bourke says. “The benefit of that feeds into what the economy needs, to create jobs and flow that through the economy.
“(We’re) not holding back and waiting for better times, because we invest for the longer term.”
North Queensland Bulk Ports chief executive Nicolas Fertin highlights the 28,000 jobs around the country that are supported by the regional Queensland ports of Weipa, Abbot Point, Mackay and Hay Point. These facilities allow the trade of more than $40bn in agricultural, energy and mining outputs.
They too, are investing, spending $17m in the next year to boost their infrastructure at the Port of Mackay, as are the Mid West Ports, with an $11.5m expansion plan.
Recent staged expansions at NSW Ports, with Patrick Terminals, will also allow on-dock rail capacity of 1.5 million TEUs at the port once the $190m project is complete.
But ports leaders also argue the efficiencies introduced at the onset of the COVID-19 pandemic — such as temporary changes to curfews and rail freight access to passenger lines for some ports — should be continued to allow greater productivity.
These minor measures allowed Australians benefits such as more efficient restocking of supermarkets during the peak retail period, and ports leaders argue they should remain in place.
NSW Ports chief executive officer Marika Calfas says a greater focus on outcomes is required for future regulations.
“We can often get constraints and conditions around operations, and all those things lead to inefficiencies, and inefficiencies lead to costs,” she says. “Ultimately, we all pay for it.”
Calfas cites perceived concerns about around-the-clock operations for curfews, but suggests regulations should be set only when there is objective evidence for them.
“Rather than saying these things can’t happen, say what are the circumstances under which they can happen. You might need electric vehicles or electric trucks in certain areas, for example, for noise at a certain level.
“Focus on an outcome you’re trying to achieve, instead of trying to prescribe the process.”
Ports Australia’s Mike Gallacher says the entire supply chain prospered under pressure and now industry and government should focus on the outcomes that could be achieved with greater efficiencies.
“It’s part of the bigger debate now,” he says.
“Government needs to sit down with industry and say, what were the things that worked and should they stay, what is the cost of making them stay and are they viable in the long term. Things such as the curfews and some of the other initiatives that were shown most certainly should be on the table.”
He also highlighted the potential of the “single-window” data collection to track products as they travel across the world and throughout Australia. It would create an automated, digital and user-friendly approach to modernise trade.
‘The entire supply chain prospered under pressure and now industry and government should focus on the outcomes that could be achieved with greater efficiencies’
Acknowledging the significant cost, Gallacher says Australia has the potential to lead the world in implementing the digital transparency across the supply chain.
“The train operators, the heavy vehicle operators, the shipping industry, the trucking industry, the stevedores, all should have access to the same amount of information about the goods going to and from the country, to ensure its efficient movement across the supply chain,” he says.
“If we can get the efficiencies right, we can make significant savings right across the country in terms of the cost of doing business and the cost of supplying goods.”
Another area of potential for some ports is increasing coastal shipping, domestic shipping around the country.
Some ports argue shipping is under-utilised in the domestic market, with the number of Australian-registered ships with coastal licences falling from 30 in 2006 to 13 last year.
Gallacher says a forum bringing together unions, industry and government gained some agreement over the vexed maritime regulations.
“We’re not going to give up the momentum on this,” he says.
A spokesperson for Deputy Prime Minister and Infrastructure, Transport and Regional Development Minister, Michael McCormack, says the Australian Government supports ongoing flexibility for supply chain efficiency.
He says Australia is actively engaged at the International Maritime Organization for standards for a maritime single window for global data exchange.
“The government recognises a trade single window would capture the enhanced supply chain data for movement and risk management of goods. This would support new approaches to co-ordinating supply chains and managing cargo and logistics, as well as being aligned with international standards and agreements.”
He says consultations on coastal trading reforms are expected to resume soon, following interruptions due to COVID-19.
Ports will also be part of the major new projects and technologies of Australia. Renewable energy projects bringing in their construction materials through the ports, which can then be exported around the world.
Mid West Ports Authority chief executive Rochelle Macdonald points to the BP’s recently announced feasibility study to build an export-scale renewable hydrogen facility.
“It was attractive for them to come here for their pilot plant,” she says.
“We really focus on working closely with our trade partners and potential new trade partners to help them be as efficient as they possibly can, and also use the existing port capacity that we have.”