East coast deep water container port capacity

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East coast deep water container port capacity

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East coast deep water container port capacity

Melbourne, Sydney, Brisbane
East coast of Australia
Efficient Markets
Infrastructure Australia identified proposal
Longer term (10-15 years)
26 February 2020

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). 

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 COVID-19 pandemic has disrupted global container freight supply chains, rapidly increasing freight costs and international shipping delays. These supply chain impacts have underscored the importance of resilience in Australia's maritime supply chains. 

Early-stage Proposal

The proposal 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 landside access infrastructure. In the longer term, alternative options could also be explored, such as new port developments or trans-shipment opportunities.

This proposal 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.

The cost-benefit of facilitating larger ships servicing Australia depends on many factors including volume demand, service frequency requirements, global connectivity needs and cost of infrastructure investment. Cost savings in ocean shipping rates may be offset by reduced frequency of vessel visits, fewer direct international port connections and the cost of additional infrastructure, labour and operational equipment to meet peak period demands.

Next Steps

The Australian Government’s responsibilities include: the regulatory framework, environmental assessment of port developments where matters of national environmental significance are concerned, safety and security matters, customs, and implementing Australia's international maritime obligations as they relate to ports.

We encourage the Australian Government, through the port owners (and Ports Australia) to work with the Department of Infrastructure, Transport, Regional Development and Communications and state governments to assess future vessel sizes and infrastructure investment requirements that optimise the overall cost effectiveness of import and export supply chains.

Refer to Infrastructure Glossary for terms and definitions.