Global shipping trends show a significant increase in the containerisation of cargo. This, in turn, is resulting in the size of container ships increasing. Globally, the capacity of container ships has increased to around 20,000 twenty-foot equivalent units (TEUs).
While many ports on the east coast of Australia have capacity to accommodate increasing throughput, they are limited in the size of vessel that can be accommodated. Shipping companies tend to service multiple ports along a route, making the choice of vessel linked to the capacity of all ports along that route. In Australia, Sydney can accommodate ships of 10,000 TEUs, but Melbourne is limited to approximately 8,000 TEUs.
No Australian port can accommodate the larger, more energy-efficient ships carrying more than 14,000 TEUs. Therefore, Australia is unable to benefit from the potential cost reductions and efficiency improvements because of its container port constraints (both wharf-side and land-side).
As the vast majority of Australia’s international freight is transported by ship, changes in supply chain efficiency would have a disproportionately large impact on competitiveness and consumers in Australia, compared with other countries.
The initiative is for infrastructure improvements that enable larger vessels access to Australian ports on the east coast. This could require channel deepening at existing ports, development of new port locations and enhanced land-side access infrastructure at ports.
Westport in Western Australia is currently developing a long-term port strategy, which is considering options for deep water port access, motivating the east coast focus of this proposed initiative.
Given the preference of cargo ships to make multiple stops on a route, a network of deep water ports will likely be required, rather than a single port at a given location. This incentivises shipping lines to provide larger vessels to service Australia and maximises potential economic efficiencies. Any capital investment should be considered in the context of pricing arrangements to avoid impeding competition.
There may also be an opportunity to consider the development of a container port facility that can accommodate the largest ships as a transhipment port for other destinations within Australia.
Proponent(s) to be identified.