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«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 ...»

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5.1 Ports According to the Journal of Commerce’s Breakbulk ports directory, 52 ports in the USA, 9 ports in South America, 6 ports in Europe, 6 ports in Africa and 11 ports in Asia have been identified as major break bulk harbours (Brooks 2009). Only 1 port in the Australia-New Zealand area - Port Nelson, was included (Brooks 2009). The 85 ports mentioned in the directory are not all-inclusive, but they represent international awareness of those ports. Australia, which has at least 27 port handling break bulk cargo, deserves to be included, as this report demonstrates.

Most of Australia’s major ports and many regional ports are involved in break bulk activities. A large variety of break bulk cargoes are handled at these ports; the main types being steel, machinery, timber, general cargoes including project cargoes.

Few of these ports have rail connections to the berths where break bulk cargo is discharged/loaded. Rail is not always the preferred method of transporting this cargo mainly due to double handling required at some stage in the movement. Generally, cargo handling equipment for break bulk cargo at most break bulk ports comprises only basic equipment such as forklifts and in some cases shore cranes, while some ports lack adequate undercover storage areas for weather sensitive products. Appendix 1 shows

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5.1.1 Townsville The Port of Townsville is one of Queensland’s fastest growing ports and acts as a gateway for export commodities, mainly minerals, sourced from the West and NorthWest of the State as well as Raw Sugar from plantations to the North, West and South of the port. The port is also the entry point for crucial imports to service these regions e.g. mining equipment, construction steel and cement. During the 2007/2008 financial year, the port handled 780 vessels and almost 10 million tonnes of cargo, achieved an average berth utilisation of 32% and reached a net profit of A$7,164,597 almost fivetimes its target of A$1,538,345 (The Port of Townsville 2007-2008 Annual Report).

At Townsville three berths can be used for handling break bulk cargoes. These are Berth 3, Berth 8 and Berth 10. Berth 3 is a 283.5 metre general purpose wharf that services containerised cargo, mineral exports, fertilizer imports, and live cattle exports (by rail). This berth is leased to Xstrata and operated by Northern Shipping and Stevedoring Pty Ltd.

Berth 8 is a 213 metre multi-purpose wharf equipped with bunker pipelines and used for frozen beef, scrap metal, timber, general cargo and fertiliser. Berth 10 is leased to Patrick Stevedoring and is a 160 metre general purpose berth occasionally shared with Australian Defence Force vessels. Typical cargoes handled over this wharf include containerised trade, general cargo, and livestock.

From interviews conducted with lines operating services into Townsville, three major deficiencies in handling break bulk cargoes were mentioned.

1. Although 3 berths are used for handling break bulk cargoes, berth availability is still a problem. In particular, break bulk cargoes compete with containers and bulk cargoes at Berth 3. At Berth 8, despite the concrete piles underneath the wharf deck is cracked; trade currently handled at Berth 7, mainly bulk minerals, might be transferred to Berth 8 due to the deteriorating condition and the planned demolition of Berth 7. Berth 10 is operated by Patricks and is predominantly used for the container trade. The Australian Defence Force is planning to operate new Panamax sized amphibious vessels from Berth 10 regularly in the near future, which will make berth availability at Townsville of greater concern.

2. The second deficiency is lack of cargo handling equipment. One of the carriers interviewed stated that Berth 3 is the only berth with a shore crane.

3. The availability of sufficient shed space for break bulk cargo is also a problem at Townsville.

Both Townsville port and North Queensland mineral exports are set for growth and expansion as more cargoes (e.g. mining equipment, building steel, rail wagons) that can only be accommodated on break bulk vessels, will go through this port. The importance that the port authority gives to this growth potential is not apparent. For instance, 12  according to the Port of Townsville Annual Report 2007/2008, most of the strategies on port infrastructure development and port expansion were not achieved although the Board approved a 10% increase in berthage and harbour dues implemented on 1 July 2008 (The Port of Townsville 2007-2008 Annual Report ).

Since this report was compiled the port authority has announced a further increase in port authority charges will be implemented from 1 July 2009. Also, that tenders have now been called for concrete remediation work on Berths 1, 8, 9 and 10.

5.1.2 Brisbane See Section 7 Case Studies 5.1.3 Newcastle The Port of Newcastle is an important economic and trade centre for New South Wales, in particular the Hunter Valley and much of the north and northwest of the State; the port authority is the Newcastle Port Corporation (NPC). It is one of the world’s largest coal export ports, with coal representing 90% of the total throughput tonnage. Since trade diversification is an important focus for the port, NPC is dedicated to developments in other bulk commodities e.g. grains, alumina, mineral concentrates and general cargoes e.g. aluminium, steel, machinery and heavy equipment for the mining industry or other projects. For example, recently four gas turbines totalling in excess of 1,680 tonnes arrived at Newcastle West Basin in 2008 from Rotterdam bound for the Colongra Power Station project on the NSW Central Coast.

During 2007-2008 financial year the port handled around 3,000 ship movements, achieved a trade throughput of 93 million tonnes valued at A$10.3 billion, and produced a profit after income tax of more than A$12 million. In the 2008-2009 financial year the port is expected to reach another throughput record of about 96 million tonnes despite the downturn in the global economy. Steel and other general cargo trade during the July 2008 - March 2009 period has increased by 149,964 tonnes or 49.5% compared to the corresponding period in 2007-2008 (NPC 2009).

No. 1 Eastern Basin, No.2 Eastern Basin and No. 4 Western Basin are the locations of the port’s break bulk cargo activity. Eastern Basin services a variety of break bulk cargoes such as aluminium, steel and timber products. It includes two common user berths—No. 1 and No. 2 Eastern Basin— where the depth of water is 11.6 metres and berth lengths of 200 metres and 185 metres respectively. They share a 4ha stacking area and a 7120m2 warehouse on the wharf. No. 4 Western Basin is a 258-metre heavy duty cargo berth with 11.6 metres depth alongside catering for all types of break bulk cargo including project cargo such as power generators and rail wagons. Back-up storage areas of 1.5 hectares and a stern ramp are available at this berth.

Besides being one of Australia's high volume tonnage throughput ports, Newcastle is one of its oldest and as a result some facilities are outdated and inadequate for the efficient handling of the quantity and type of cargoes now arriving in Newcastle. In regard to the efficiency of wharf facilities, a member indicated that the quay length at East Basin is not enough for its current geared ships let alone its new generation vessels due later in 2009. Problems about insufficient water depth alongside East Basin and the

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Road and rail connection to/from the port have been reported as inadequate when compared for example, at Port Kembla, which is a cost to shipping lines. One major carrier reported that the F3 Freeway from Newcastle to Sydney does not provide direct access to cargo destinations in the Sydney region and weight limits on some bridges apply whereas direct to importers premises delivery by road from Port Kembla to Sydney, is largely unimpeded. It was stated that the only berth with an adequate rail connection is West Basin No. 4.

There is also a natural constraint at Newcastle that is almost impossible to overcome— the port will close 15 days a year on average due to bad weather which causes a surge in the port and can restrict ship movements.

Through its strategic planning, the Newcastle Port Corporation is encouraging growth in new general cargo trade e.g. steel whilst at the same time maintaining the growth in existing trade. According to the NPC website, considerable planning is being undertaken now and will continue into the future, aimed at further diversifying cargo moving through the port which will steadily increase the number and types of ships visiting the port. In particular, the former BHP site at Mayfield, now the Intertrade Industrial Park, will be developed to be an eight-hectare general cargo facility which can cater for a wide variety of cargo from steel, machinery to other specialist cargoes.

However, in the Port Corporation’s view, the new upgrade project at the former steelmaking site will remove the need to construct a planned A$2 million cargo storage and distribution shed at West Basin.

5.1.4 Port Kembla Refer to Section 7 Case Study 5.1.5 Melbourne

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14  commodities (see Table 5). Break bulk cargo which includes motor vehicles, timber, paper, iron and steel contributes about 12% of total cargo throughput in revenue tonnes.

The Port of Melbourne Corporation (PoMC) owns and leases 34 commercial berths at five docks and at river wharves handling more than 3500 commercial ship calls each year (PoMC 2008). In 2007-2008, operational performance in the Port reached approximately A$90 million in exports handled on average each day (PoMC 2008).

Total port trade grew 6.7% to reach a record 75.7 million revenue tonnes (30.8 mass tonnes) with a solid revenue of A$171.5 million (an increase of A$29.4 million compared with 2006-2007) and operating profit after income tax of A$43.3 million for 2007-2008 (an increase of $21.4 million compared with 2006-2007). In particular, A$97.2 million was generated by wharfage only in 2007/2008 which was A$20 million more compared to the previous year (PoMC 2008).

Eight berths are usually used for handling break bulk cargo at Melbourne. Appleton B, C & D are operated by POAG as multipurpose facilities offering services for containers, general cargo and motor vehicles. The total length of this facility is 584 metres with

10.7 metres depth alongside. There are two 8500m2 and one 7500m2 sheds at Berth B, C and D respectively. Regarding the cargo handling facilities, Berths B & C have one 35t Favco wharf crane, twenty 35t forklifts and four mafi trailers while there is one 110t harbour crane at Berth D.

Patricks operate Webb Dock berths 3 & 4 which together provide 8ha of land for general cargo. Berth 3 is 210 metres long with a water depth of 10 metres while Berth 4&5 are 530 metres long in total and 12.5 metres deep. The shore side facilities offered by Patricks are one 13,000 m2 shed, twelve 28-35 tonne and fifteen 2-16 tonne forklifts.

Victoria Dock is another common user general cargo berth where bulk and break bulk cargo e.g. timber, steel, paper products and cement imports are handled. This berth is 200 metres in length with 9.4 metres in depth alongside with 5,516 m2 shed space. In addition, the remaining two berths are located at South Wharf 28 and 29 with 292 metres in total of berth face and 9.4 metres of water depth, which are managed by PoMC to be used either as a lay-up berth or as a common user facility.

Various deficiencies in Melbourne’s breakbulk facilities were advised during interviews with shipping companies and importers. Shipping lines indicated that the progressive reduction in the number of break bulk berths is a primary concern. The number of break bulk berths has declined from 14 in 1999/2000 to 8 in 2009 with further possible reductions decreasing that number to 6 or less (PoMC 2000). A member stated that break bulk vessels might not be able to call at Melbourne within 10 years unless the PoMC plans long term facilities for break bulk cargo. Another member was also concerned about the fierce competition for berths between shipping lines that could emerge in the near future due to lack of sufficient berth availability.

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