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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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The lack of undercover storage at Melbourne was also commented on by four interviewees. Although shed space provided at the port is proportionally better compared to other ports, it is still insufficient due to the larger amount of weather sensitive cargoes discharged, e.g. Melbourne is the major discharge port for CMC and Stemcor—two of the largest steel importers in Australia. The other significant deficiency is related to the lifting capacity and cost of shore cranes at Port of 15  Melbourne. For example, it was reported that the crane cost is A$20,000 in Melbourne compared with A$2,700 in Southampton for similarly rated cranes, and the lifting capacity of the Favco crane at Appleton Dock B&C is only 35 tonnes. Other productivity impediments advised by major break bulk shipping lines were insufficient skilled labour, pavement restriction at Appleton Dock and insufficient operating hours for receival and delivery.

In 2007/2008 the PoMC invested A$175.3m in capital expenditure projects of which only 0.7% was spent on break bulk facilities (PoMC, 2008). As a major port for national container traffic, handling around 36% of the nation’s container trade, the majority of expenditure appears aimed at coping with increasing container traffic, e.g.

Channel Deepening Project expenditure in 2007/2008 of A$126.8 million with much larger amounts budgeted for future years until completion and rehabilitation works for container berths at Swanson Dock over A$40 million. Consequently, PoMC’s primary future plan appears to be to ensure sufficient capacity to accommodate the container trade demand which is forecast to grow to 8 million TEU by 2035 or 22,000 containers on average every day (PoMC, 2008). PoMC’s plan to reduce break bulk berths is expected to commence in 2013/2014. Consequently, all the general cargo traffic currently moving through that berth will then have to move through Appleton Dock berths B, C & D, Victoria Dock and South Wharf or newly constructed facilities.

However, if new general cargo berths are not constructed, draft constraints at South Wharf and capacity limitations at Victoria Dock, will mean a substantial amount of break bulk cargo will be forced to use Appleton Dock B, C & D. This will place a greater strain on the already limited capacity, leading to intense competition between shipping lines for a paucity of berths.

“Port Futures”, a Government report to be released later this year will hopefully address these identified deficiencies.

5.1.6 Port Adelaide

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16  In the 2007/2008 fiscal year, 1,200 vessels carrying 179,135 TEUs and nearly 9 million tonnes of non-containerised cargoes were handled in the port. The volume of break bulk cargo is relatively small and only accounts for about 2.2% of non-containerised trade in 2007/2008 (see table 6).

Six berths, which are leased by Flinders Ports to Patricks and POAG, are used for handling break bulk cargo. Inner Harbour berths numbers 18, 19 and 20 have 178, 168 and 163 metres in length of wharf face respectively and 10 metre depth alongside. The storage spaces in the transit sheds at these three berths are 4092m2, 2877m2 and 2640m2. Inner Harbour berth 29 is 245 meters long and 10 metres deep with a wharf face of 163 metres in length. A small backup shed is located here. Osborne, an inner harbour location, comprises two berths; Osborne 1 is 208 metres long with 10 metre depth alongside while Osborne 2 is 159 meters long with 9.4 metre depth. Since only a few breakbulk shipping lines call at Port Adelaide, the undercover storage area is generally sufficient. However, there is insufficient cargo handling equipment i.e.

cranes, at these berths.

Berth priority and undercover storage are two prominent issues at Port Adelaide. In particular at the Outer Harbour car carriers have berth priority over break bulk vessels resulting in vessels with break bulk cargo having to use Inner Harbour berths. However, with the draught at Inner Harbour berths only 10 metres this adds to uncertainty of berth availability and impedes break bulk vessel operation to a great extent. Another major deficiency is the poor condition of cargo sheds – leaking roofs - at the Inner Harbour berths. A line reported that they had experienced damage to newsprint at these sheds.

Berth priority is also given to cruise ships at an Outer Harbour berth.

Port Adelaide is expected to experience strong growth from the import of wind generators and associated equipment with the construction of the world’s largest wind farm south of Adelaide. However, there is some doubt about the capability of existing shore cranes to handle this volume of cargo. One major carrier, indicated that Flinders Ports is not willing to invest in cargo handling facilities citing several reasons for this e.g. pavement weight constraints for new cranes. The future port development blueprint proposed by Flinders Ports appears to be concentrated on the bulk and container trade.

Resulting from the expected continuation of the mining boom, Flinders Ports has demonstrated their commitment to develop Port Adelaide as a major bulk cargo handling facility for Southern Australia. For instance, a new multiuser bulk handling port facility on a portion of land beside existing Berth 29 in the Inner Harbour of Port Adelaide is to be developed with the expected unprecedented growth of the mining industry in South Australia. Similarly, Flinders Ports also want to develop the Outer Harbour of Port Adelaide as a central hub for the import and export container trade.

Flinders Ports has signed a joint venture agreement with DP World operator of the Adelaide Container Terminal, which include a 30-year concession for DP World’s operation in the port.

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Source: Fremantle Ports Annual Report 2003/04 – 2007/08 The Port of Fremantle is managed and operated by Fremantle Ports, a WA State Government enterprise. The port is an important strategic gateway for the trade to/from with Asia, Middle East, Africa and Europe and is well positioned to be the first or last Australian port call for those trades. It is also the biggest and busiest general cargo port in Western Australia handling approximately 82% by value of the State’s seaborne imports and 27% of the value of the State’s seaborne exports (Fremantle Ports, 2008).

The port operates from Inner Harbour at Fremantle and Outer Harbour at Kwinana.

Outer Harbour berths are leased by Fremantle Ports to private operators Alcoa, BP and Co-operative Bulk Handling. The Inner Harbour provides facilities for handling livestock exports, motor vehicle imports, other general cargo trade, cruise ships and visiting naval vessels and also includes the only two dedicated container terminals in Western Australia handling almost all of the container trade for the State. The Outer Harbour is one of Australia’s major bulk cargo handling facilities for grain, petroleum, liquid petroleum gas, alumina, iron ore, coal, fertiliser, sulphur, pig iron and other bulk commodities.

During 2007/2008, the number of ship visits reached 1,725, a slight increase of 2.3% compared with 2006/2007(see Figure 2). In the year 2007/2008 Fremantle Ports declared a 16.6% rise in revenue and 47.9% growth in profit after tax, to a new record of A$122.5 million and A$17.9 million respectively. The total volume of imports and exports that passed through Fremantle in that year reached 26.08 million tonnes valued at A$24 billion (see Figure 3), of which break bulk cargo accounted for approximately 3.2% of import volume and 4.2% of export volume.

In the Fremantle Ports’ Annual Report 2007/2008 the strong growth of break bulk cargo was highlighted and it was pointed out that the growth rate of break bulk cargo was higher than total trade volume growth rate of 4%. Figures for iron and steel break bulk imports showed a growth rate of 8.5% (Fremantle Ports, 2008). Other break bulk cargoes to show significant growth were imports of industrial and agricultural machinery and vehicles and exports of scrap metal. In order to cope with the buoyancy of the break bulk import/export trade, Austral Asia Line (AAL), Wallenius Wilhelmsen, Spliethoff and Pacific Orient Sea Transport (Post) all provide regular break bulk services to Fremantle.

18  Berths 1, 2, 11 and 12 at North Quay are the four common user berths with 11 metres depth of water alongside that are used for handling break bulk cargo in Fremantle.

Berths 1 and 2 are 207 metres and 175 metres long respectively. The storage areas at these two berths are 16,130m2 and 7,495m2 open stacking areas without any common user undercover storage space. At Berth 11 and 12, the berth lengths are 196 metres and 233 metres with 26,203m2 and 12,906m2 open spaces for stacking cargoes respectively.

There is an old shed at Berth 11 and 12 used for break bulk cargo. Break bulk cargo is handled by ship’s gear and there are few cargo handling facilities provided by stevedores—Patrick and POAG.

In 2007/2008 Fremantle Ports reported the overall satisfaction with services provided by Fremantle Port fell significantly to 88% compared with 95% in 2005/2006 (Fremantle Ports 2006, 2008). The average delay on berth availability is 3.1 hours at Inner Harbour and 75 hours at Outer Harbour (Fremantle Ports, 2008). Both shipping lines and steel importers reported that undercover storage area is in short supply nationally and Fremantle is the port where this occurs most. It was indicated that insufficient undercover storage is provided on Berth 1 and 2 and shipping companies require shed storage at those wharves in order to protect vulnerable products such as steel. But, the shed capacity is too small and can be quickly filled up. Any party who does not secure shed space risks possible damage to their cargoes. Similarly, it was commented that Berth 11 and 12 has an inappropriate shed with open end faced west, which cannot stop the wind from the west risking damage to their vulnerable cargoes.

Another major deficiency closely aligned with shed space is the inadequate free storage period of 3 days. Stemcor argued that some of their cargoes such as an 8,000 tonnes steel shipment need at least 5 days for delivery but the port authority would not extend the free storage period resulting in substantial storage costs. Another major deficiency is insufficient berth availability resulting in berth competition. In 2000, a wide range of non-containerised cargoes including steel, timber, agricultural machinery, cables and paper was handled at both North Quay and Victoria Quay (Fremantle Development Plan 2000), but now the operation of break bulk cargo has been limited to the four berths at North Quay.

The shortage of break bulk cargo handling facilities forces shipping lines to spend more money on hiring facilities which build up the cost structure for break bulk cargoes.

Most shipping lines also reported their dissatisfaction with stevedores’ services and charges. In particular, it was advised that the stevedoring services provided by Patrick are inadequate due to lack of labour availability and shortage of stevedoring skills and experience. However, another comment was received that over the past 12 months Patricks have become proactive and competitive. They have engaged industry both shipping and cargo to ensure effective consultation before a vessel arrives and they are allowing delivery during discharge to avoid cargo going into storage. Other deficiencies reported at Fremantle are insufficient wharf space for large consignments, congestion on the road approach to the berths and no manned security gate or security checking, causing port congestion, damage to and theft of cargoes.

In Fremantle Port’s Annual Report (2008), the break bulk shipping services and their associated trade volume have been identified as a potential growth sector to Fremantle’s future trade. Fremantle Ports stated their concern at the significant stacking area required by break bulk imports and exports and in consequence they will continue to

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The Port of Dampier is managed by the Dampier Port Authority (DPA) a Western Australian State Government owned corporation. The port is situated at the heart of the resource boom in the Pilbara and continues to be a major centre for unprecedented growth in energy resource exports and for the development of the oil and gas industry on the North West Shelf. In the 2007/2008 financial year, Dampier has been confirmed as the world’s largest bulk export port and has reached a new trade volume record of

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