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Port costs up – ACCC report

AUSTRALIA’S major ports have witnessed an increase in stevedoring unit costs and revenues while productivity has fallen, according to an Australian Competition and Consumer Commission report released last week. The eighth annual monitoring report, which covers prices, costs and profitability of container terminal operations for 2005-06, showed higher fuel costs and costs associated with capital work programs were the main drivers for the increase in unit costs. The findings from the report are in contrast to the late 1990s, when there was a pattern of increased productivity, following waterfront reform, while real unit revenue and costs were down. According to ACCC chairman Graeme Samuel, the Australian stevedoring industry was facing a number of challenges. “The important industry reform undertaken in the late 1990s led to a period in which very strong growth in container volumes was handled and costs and prices, in real terms, fell,” Mr Samuel said. “However, it appears that these gains are no longer being made. The growth in container volumes that is predicted to continue raises issues about how the necessary expansion in stevedoring capacity will be managed.” He said the ACCC report noted the benefits of competition in stevedoring services should not be underestimated when decisions regarding approaches to capacity expansion were being made by port managers.

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