«Break Bulk Shipping Study TABLE OF CONTENTS List of tables List of Figures Executive Summary 1 BREAK BULK CARGO 1.1 Definition 1.2 Types of Break ...»
Shipping Australia Limited
Level 6, 131 York Street
Sydney NSW 2000
PO Box Q388, Sydney NSW 1230
Tel: 02 9266 9900
Break Bulk Shipping Study
TABLE OF CONTENTS
List of tables
List of Figures
1 BREAK BULK CARGO
1.2 Types of Break Bulk Cargo
2 THE IMPORTANCE OF BREAK BULK CARGO
2.1 The Nature of Break Bulk Cargo
2.2 Value of Break Bulk Cargo
2.3 Volume of Break Bulk Cargo
3 GENERAL CARGO SHIPS
4 INTERNATIONAL SIGNIFICANCE OF BREAK BULK CARGO
5 AUSTRALIAN PORTS WHERE BREAK BULK CARGO IS HANDLED
5.2 Principal Break Bulk Ports
5.2.4 Port Kembla
5.2.6 Port Adelaide
6 PORT COSTS
6.1 Indicative Port Cost Comparisons for Selected Break Bulk Ports
6.1.1 Description of Port Costs
6.1.2 Scope of Port Cost Study
6.1.3 Port Cost Study Methods
6.1.4 Indicative Port Cost Comparison
6.2 Impact of High Port Costs
7 CASE STUDIES
7.1.1 Break Bulk Cargo Traffic
7.1.2 Existing Port Operations and Facilities
7.1.3 Future Vision
7.1.4 Possible Improvements
7.2 Port Kembla
7.2.1 Break Bulk Cargo Traffic
7.2.2 Existing Port Operations
7.2.3 Future Vision
7.2.4 Possible Improvements
8 ECONOMIC BENEFITS OF BREAK BULK CARGO
9 CONCLUSIONS AND CONSIDERED AREAS FOR IMPROVEMENT
9.2 Benefits from Undertaking the Study.
9.4 Areas for improvement
9.4.1 Realise the importance of break bulk cargo
9.4.2 Shore-based Infrastructure Development
9.4.3 Competition in Stevedoring/Terminal Management
9.4.4 Port Costs
9.4.5 Skilled Labour Supply
9.4.6 Development of Key Performance Indicators
i 9.4.7 Supply Chain Considerations
10 APPENDIX 1: AUSTRALIAN PORTS THAT HANDLE BREAK BULK CARGO.................54 11 APPENDIX 2: ABBREVIATIONS
ii LIST OF TABLES
Table 1: Principal Break Bulk Cargoes Imported in to/Exported out of Australia
Table 2: Do shipping lines consider break bulk cargoes play a significant role in their business?
Table 3: Orders for New Ship Buildings
Table 4: Vessels Employed in Australian Break Bulk Trades Sizes and Services
Table 5: Total Trade by Cargo Type – Melbourne
Table 6: Break Bulk Cargo Volumes – Port Adelaide
Table 7: Basic Assumptions for the Port Cost Comparison Study
Table 8: Total Port Call Costs Incurred – excluding GST
Table 9: Comparative Port Costs ($) – Alternative 1
Table 10: Comparative Port Costs as a Percentage of Total Costs ($) Alternative 1
Table 11: Breakdown of Comparative Port Costs ($) – Alternative 2
Table 12: Comparative Port Costs as a Percentage of Total Costs ($) Alternative 2
Table 13: Larger PCTC vessels/Ro Ro Total Port Call Costs Incurred – excluding GST
LIST OF FIGURES
Figure 1: Ports in Australia Where Break Bulk is Handled
Figure 2: Fremantle Ship Visits
Figure 3: Fremantle Trade Volume
Figure 4: Dampier: Forecast General Cargo Throughput
Figure 5: Comparison of Growth Rate for Import & Break Bulk Volume
Figure 6: Comparison of Growth Rate for Export & Break bulk Volume.................. 28 Figure 7: Comparison of Growth Rate for Total & Break Bulk Volume
Figure 8: Percentage of Break Bulk Imports
Figure 9: Percentage of Break Bulk Exports
Figure 10: Break Bulk Exports (overseas) at Port Kembla
Figure 11: Break Bulk Imports (overseas) at Port Kembla
iii EXECUTIVE SUMMARY
The study was initiated by the Shipping Australia Break Bulk Cargo Working Group in order to find out more about the different types of general cargo being handled at Australian ports, the adequacy of the facilities available at ports, to compare the costs between ports of a port call of a ship carrying break bulk cargo and provide an indicative value that this sector makes to the Australian economy.
Interviews were conducted with a wide variety of organisations including port authorities, stevedores, terminal operators, shipping companies and importers. Some statistics were provided by shipping companies and a large amount of data obtained from publications and websites. The ports of Brisbane and Port Kembla were the subject of special case studies.
From this wide variety of sources it became apparent that the level of awareness of this important sector of Australia’s international trade was far below that enjoyed by the dry bulk, container and motor vehicle trades. That lack of awareness was evident in an understanding of the types of cargoes that these ships discharged in Australian ports and the special needs that some of these cargoes have. This was most apparent in the generally reported lack of port facilities especially in relation to the availability in the port of undercover storage for vulnerable products. This situation was not anticipated considering that the major cargoes discharged included those commodities that needed protection such as steel and newsprint. Port Kembla obviously benefited from facilities in the Inner Harbour being relatively new.
As a result of this study, it is hoped to lift the profile of this important sector of our industry so that the identified deficiencies can be addressed and break bulk shipping allowed to reach its full potential.
Berthing facilities at some ports were also reported to be inadequate. At Townsville, Newcastle and Adelaide some facilities were old and in need of upgrading to increase the depth of water alongside, to extending the length of the berth face to be able to accommodate larger ships and strengthen the decking to enable heavier loads to be landed.
At Melbourne the current understanding of the planned port development will place a severe strain on berth availability for break bulk shipping in the future.
At Brisbane, Port Kembla and Port Adelaide berthing priority procedures are in operation which often disadvantage break bulk cargo ships in favour of car carriers. It was understood that these systems were based on giving priority to ships that have a quick turnaround in port. Sharing berths between general cargo vessels with break bulk cargo and pure car and truck carriers and large roll-on/roll-off vessels causes serious problems for all. The answer must lie in providing separate berths for these different sectors because of those very different characteristics.
Based on applying tariff charges for a port call by a typically sized general cargo ship at the ports handling the most break bulk cargoes, it was found that towage was the largest cost component; at some ports towage made up over 50% of the total of the port
This study was not able to include stevedoring charges as these were commercially confidential. However, SAL received complaints regarding high stevedoring costs. It was suggested to SAL that the high cost resulted from the land valuation imposed by the port authority on the terminal operator. In some ports, sufficient labour to work all ships alongside around the clock was not available causing further delays to the ship.
The economic benefit to Australia was considered in terms of the contribution made by shipping services in transporting those products not necessarily available in Australia, but considered important to stimulate economic growth. Those products largely comprised project material, machinery for mining, resource development and agriculture and steel for manufacturing and infrastructure projects.
The study found that in the two States where resource development in mining particularly, was at its highest level – Queensland and Western Australia, some port and berth facilities appeared to be the most inadequate. The ports identified with these problems in Queensland were Townsville and Brisbane and in Western Australia Fremantle and Dampier. The project cargoes and other cargoes vital to this development as well as infrastructure construction are essential in supporting the industries that make such an important contribution to economic growth.
In other States where large steel imports similarly support heavy industry and manufacturing and therefore employment, port facilities were often reported as illequipped to efficiently handle consignments of steel some of which are very large.
At a time when Australia is committed to adapting to alternative sources of power generation, the importation of wind generators is expected to increase significantly.
This equipment is highly valuable and often difficult to handle because of the length of some blades and susceptibility to damage. The availability of suitable shore-based handling equipment and skilled workers becomes essential and these were reported as often in short supply.
The conclusions reached in this study are not surprising but they do, for the first time, substantiate the many problems previously identified by those involved and reinforce the absolute necessity of addressing the shortcomings as a matter of some urgency.
Besides the poor general awareness of the section’s problems and economic contribution, the conclusions reached pointed to the lack of adequate infrastructure, including the lack of undercover storage, shortage of labour and especially skilled labour, the problems arising from the operation of different berthing systems, strong competition in stevedoring services/terminal operation could be of benefit and the level of port costs was considered a possible impediment to future development.
2 A number of areas for improvement were identified:
a. Raise the profile of the industry b. Encourage port authorities to develop separate berths for general cargo vessels and those vessels carrying wheeled cargo and agricultural equipment.
c. Establish a genuinely representative consultative mechanism for all stakeholders involved in break bulk cargoes in ports where it is a significant trade to improve the efficiency of operations, eg. the use of portable temporary warehouses where appropriate.
d. Encourage increased competition in stevedoring/terminal management where the overall benefits have been clearly identified.
e. Port authority charges should be kept at a reasonable level to ensure Australia remains internationally competitive.
f. Tackle the labour issues identified in the conclusions.
g. Develop valid, workable and realistic indicators of performance in ports so that a port’s performance can be ranked against national or even international benchmarks and results made publically available.
h. Development of port based data community systems to, among other matters, provide a platform for facilitating information exchange, promoting collaborative problem-solving activity and fostering co-operative action in pursuit of a common objective.
Implementation of these recommendations for improvement will greatly assist break bulk shipping in meeting their customer’s requirements for the long term seamless delivery of cargo. In addition, they will encourage port authorities to upgrade infrastructure planning and development with the objective of removing current port user dissatisfaction with port congestion, berth availability, inadequate labour supply, lack of skills and storage facilities.
An effective IT communications platform would facilitate information exchange, promote collaborative problem-solving activity and foster co-operative action. The platform could be designed to link the operation of port service providers as well as port users, resulting in the efficient operation of the port as a shared responsibility. SAL’s promotion of port based data community systems is consistent with this policy objective.
3 1 BREAK BULK CARGO
1.1 Definition Break bulk cargo is also defined as general cargo. Such cargo is loaded into ships as individual pieces or unitised on pallets, in bundles and is not containerised nor in the form of dry or liquid bulk consignments in whole or part shiploads.