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).
In the future, when container demands increase to appropriate levels, there is an opportunity for larger, more energy-efficient ships carrying more than 14,000 TEUs to serve Australian ports. This has the potential to create cost reductions and efficiency improvements.
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.
While ports on the east coast of Australia have capacity to increase container throughput, investment will likely be required to ensure larger container ships can berth, transfer containers and have those containers taken to their destinations.
Given the complexity of port-related supply chains and the lead time to identify and implement infrastructure, it is important to start planning for these changes.
Shipping companies prefer to service multiple ports along a route, therefore the capacity of all ports along that route will influence the choice of vessel.
The initiative is for infrastructure improvements that enable larger vessels access to Australian ports on the east coast.
In the first instance, options to make better use of existing infrastructure should be considered, such as channel deepening and wharf upgrades to existing ports. These may need to be supported by improved land-side access infrastructure. In the longer term, alternative options could also be explored, such as new port developments or transhipment opportunities.
This proposed initiative is for the east coast of Australia, as there is limited overlap between the west and east coast shipping routes. Westport in Western Australia is also developing a long-term port strategy that is considering options for deep water port access.
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, which may generate economic efficiencies subject to the investment costs required to service these larger vessels. Any capital investment should be considered in the context of pricing arrangements to avoid impeding competition.
Proponent(s) to be identified.