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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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Due to the substantial cargo volume handled through the AAT Terminal, shipping lines, importers and stevedores indicated that the existing sheds are, at about 15,000m2, insufficient to allow efficient sorting and stacking of cargo or to cope with the inevitable use of the terminal as a short term warehouse space by importers for less urgent cargo. Shipping lines reported that the shortage of undercover storage area often forces vulnerable cargoes to be stored outside on the wharf or in other commercial warehouses outside the port. This is an expensive and annoying manoeuvre for cargo receivers who must double handle the cargo from wharf and truck it to the warehouses.

31  Due to block stacking of cargoes in the AAT facility particularly steel, the difficulties incurred in subsequently sorting and removing steel from the sheds are considerable, as is the inconvenience caused to importers seeking access to their cargoes. However, AAT argue that importers are using the shed as a warehouse rather than transit place and clearly state that they cannot allow the shed to be used for this purpose because of the scarcity of port land. They expect cargoes to move out as soon as possible in order to keep the shed facility functioning well. AAT also state that it is unacceptable to waste the limited available shed space for items that do not demand undercover protection.

Grain Berth

The grain berth is operated by GrainCorp and is used for dry bulk cargoes such as grain, woodchips, sugar and cottonseed exports. This berth has been extended by 50 metres, making the wharf now 285 metres long and can now accommodate some PCCs and RoRo vessels when it is available and suitable for those vessels. AAT berth priority arrangement also applies at the Grain Berth if it is intended to be used by these vessels.

A dedicated road from the Grain Berth to the AAT Terminal has been built to help the transit of break bulk cargoes discharged at the Grain Berth. This berth has no storage facilities.

Hamilton - Maritime No. 1

Maritime No. 1 is operated by Patrick General Stevedoring. The berthing protocol of first-arrive-first-berth applies here. This berth, which is located 14.6 kilometres from the river mouth and is approximately 217 metres long and 35 metres wide with a dolphin for length extension. Minimum depth alongside is 9 metres. The wharf is a bulk liquid berth, bulk oil, chemicals and other wet bulk are discharged on the wharf, which can also be used for overflow break bulk cargoes. However, because of an absence of undercover storage facilities adjacent to the wharf, its use is restricted to certain types of break bulk cargoes that do not require that protection. Moreover, only shallow draft vessels can be operated at this berth due to insufficient water depth alongside.

Hamilton - No. 4

Hamilton No. 4 is one of the former P&O bulk and general cargo operation berths;

break bulk cargo operations were relocated to Fisherman Islands in 2006. Currently, it is a multipurpose berth, managed by P&O General Stevedoring, mainly used for bulk cargo, containers and general cargo. The berth comprises a 210 metres long and 35 metres wide berth pocket with a shallow depth of 10.3 metres. Berthing priority at this berth is based on the order of arrival at the pilot station. There are some small and old sheds on the wharf which can be used as overflow facilities for break bulk cargoes.

However, the shed space is too small and the berth is too old to allow the efficient operation of break bulk cargo.

Stevedoring Operations At the general cargo berths 1-3, POAG and Patrick provide the stevedoring services.

POAG, the former general cargo division of P&O Ports, operates at 17 ports around Australia and its main business is handling motor vehicle, general and bulk cargoes.

32  The Auto, Bulk & General division of Patrick specialises in the receival, storage and loading/discharging/delivery of motor vehicles, bulk cargoes, and specialist cargoes such as steel, paper and timber products.

As POAG stevedores about 75% of break bulk cargoes at Brisbane their operations will be used as an example representing both stevedoring companies. The majority of POAG’s stevedoring business covers break bulk cargoes such as timber, steel and project cargoes. Some examples of their project cargoes are 100 tonne yachts, locomotives and a 200 tonne generator for a Queensland power station.

The availability of labour for stevedoring has evidently been a topic of some debate.

Some shipping companies believe more skilled waterside workers are necessary for improving the productivity of stevedoring. One member indicated that the availability of labour does present problems when all berths are occupied resulting in a labour shortage with only one gang being available even though more are needed. However, POAG argued that they already have 140 employees at Brisbane with 80% being full time permanent employees. In order to supply a skilled workforce, POAG make sure each permanent employee has 2-3 skills and 1 skill with casual employees. POAG also provides training for some casual employees that act as a contingency when a shortage of skilled labour occurs. However, the risk of training casual employee is that they will be attracted to higher paying positions e.g. the mining industry, when trade booms. In addition to labour availability POAG stated that other challenges might also impede the

efficiency of stevedoring operations as follows:

Cargo marking is either inadequate or wrong which slows down the stevedoring operation while sorting according to discharge port/consignee, is carried out.

Overseas ports do not always stow cargoes to mark in cargo holds which slows down the discharging rate while cargo identification is carried out;

Sometimes, shipping agents will bring forward the vessel’s ETD which places a lot of pressure on the stevedoring operation;

Limited shed space can be filled by certain products that do not need undercover protection which ultimately leads to shed space congestion. Weather sensitive cargo not easily fitted into the overcrowded shed cannot be stored on the wharf without causing congestion and risking cargo damage.

Port Land Interface Brisbane has both rail and road access. However, rail access at the Brisbane Multimodal Terminal (BMT) is more suitable for container traffic rather than the break bulk trade because of two major disincentives. First it is not an economic way to moving cargoes by rail where double handling is required. Secondly, transporting goods by rail may risk possible damage to weather sensitive products because rail transport might not have the proper cover to protect vulnerable products.

It was also reported that the road connection to the Port is inadequate with the road bridge limiting receival and delivery operations. In order to ease this problem, PBC has committed to several road infrastructure development projects. In particular, the duplication of Gateway Bridge is in progress including additional motorway lanes for the Gateway Bridge and improved connection to the Motorway from Lytton Road to the 33  Port of Brisbane Motorway. PBC is also upgrading the Lucinda Drive and Port Drive interchange which will improve safety and increase road capacity.

Users of receival and delivery services provided by AAT e.g. stevedores, importers and shipping companies, advise two major problems regarding these services. This usually involves insufficient hours of operation and the lack of planning for the receival and delivery of break bulk cargoes, resulting in port congestion. The operation hours are especially a problem when block stacking of cargoes occurs. An importer indicated that the short receival and delivery operation hours for break bulk cargoes along with block stacking of cargoes aggravates the problem of expeditious cargo delivery. On the other hand, AAT argued that the receival and delivery service is provided from 0800 to 1600 on weekdays and ad hoc services for evening, weekend and public holiday can be requested as well. However, one new argument that arises is the fairness in charging overtime to cargo receivers. For example, when cargoes are blocked by other cargoes in front of it or on top of it, receivers can be limited to 2-3 loads a day. If receivers request an extension to the delivery hours at night or at a weekend, they have to pay a premium.

Importers and shipping companies commented that major receival and delivery problems also occur with truck checking procedures at exits of the ports often leading to missing cargoes. It was reported that a lack of communication and coordination between road transport operators and AAT, results in truck queues and associated congestion. However, AAT stated that an arrangement with 5 to 6 major transport companies made in 2007 was aimed at speeding up the cargo transportation process by using electronic transmission of data. This initiative resulted in improved communication between them and greater efficiency of the transportation process by AAT updating its cargo pick-up information continuously on its website. However, some small operators will appear for cargo pick-up without informing the terminal operator in advance.

The inadequacies with the road/rail connection and receival and delivery services cause serious problems that affect overall cost, timeliness and reliability of cargo delivery.

Port Services

Port Services at Brisbane:

Pilotage. Provided by Brisbane Marine Pilots Pty Ltd Towage. Two companies provide towage services - PB Towage and Svitzer.

Linehandling. Privately provided services Contracts for towage and line handling services are negotiated directly between shipping lines and service providers. According to interviews shipping companies are satisfied with port services and charges at Brisbane.

34  Port Charges Port Authority Charges As most cargoes are now handled at Fisherman Islands, Hamilton berths will not be included. Charges are incurred in three areas;

Port authority charges that apply to ships occupying general cargo berths 1, 2 and 3:

Conservancy Charge (this is payable to Queensland State Government), Stevedoring and Other Charges at Break Bulk Berths The stevedoring cost is the subject of a contract between the shipowner/operator and either stevedore – POAG and Patrick.

AAT lease the berth, the back-up land and buildings from the Port of Brisbane Corporation. This cost is reflected in the level of the charges passed on to the stevedore

and to the shipowner/operator for the ship occupying either berths 1, 2 or 3:

Facility Access charge Stevedore Access Charge Cargo Receival and Delivery charge These are either charged direct to the shipowner/operator or to the stevedore who might then recover the charge from the shipowner/operator or cargo owner.

The level of these charges has attracted criticism mainly due to the high value of the land occupied by the lessee. The Queensland Government has supported the Port of Brisbane Corporation application of commercial market values which has led to the substantial increase in costs to AAT and other lessees. In PBC’s opinion, this increase is

reasonable due to the following reasons:

The port charges have not been increased since 1982.

The current land value at the Port of Brisbane is far less than the land value elsewhere. There is a finite amount of suitably placed coastal land and low valued land attracts undesirable industries. Thus, there is a need to apply the real market valuation of port land for use by shipping and associated industries.

PBC has invested a significant amount of money in port infrastructure and facilities recently. All the investments require a reasonable rate of return.

All tenants have been treated fairly, thus the facility access charges have been raised as well. The high cost on some facilities such as sheds can discourage importers using the port as a distribution centre.

However, every shipping company and major importer interviewed whose ships discharge/load at Brisbane stated that port authority charges that are the basis of the AAT charges are excessive especially in the current gloomy economic climate and are consistently higher than other general cargo berths at other ports. In particular, it is felt 35  that the more appropriate action would be to give concessions similar to those offered by Singapore, Log Angeles, Long Beach and Malaysian ports.

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