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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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7.1.3 Future Vision The PBC has invested A$1.3 billion in development of infrastructure and assets in the last two decades on container berths, bulk terminals and break bulk berths and this is continuing. The Corporation believed that they were giving adequate attention to break bulk cargoes and they do not differentiate in their charging structure between break bulk and cars even though the throughput of cars is more productive on an hourly basis in terms of cargo handled. While some ports give preference to motor vehicles over break bulk cargoes, PBC will continue with the investment of A$60 million to provide a new general cargo berth i.e. the General Purpose Berth (see below). In addition, work on the Port West Estate is progressing and expected to provide additional capacity for break bulk cargo. To further illustrate the points made by PBC, the planning for the

General Purpose Berth and Port West Estate are detailed as follows:

General Purpose Berth

The PBC reclaimed some land from Queensland Bulk Handling Terminal to build a new general purpose berth of 260m with pavement loading of up to 350T to solve the pavement loading limit problem of only 90 tonnes at the AAT Terminal and ease the vessel congestion at the terminal.

Construction of the General Purpose Berth is expected to be completed by early to late June 2009 at a cost of $60m, and will significantly boost break bulk cargo capacity. This new common user berth will be managed by PBC but no sheds will be built there.

Port West Estate The original feasibility study on Port West Estate, an 80ha lot of vacant strategic port land along the riverfront at Lytton, indicated that the estate would be used primarily for the Pre-delivery inspection (PDI), medium and long-term storage of motor vehicles.

However, after further investigation, PBC determined that there might be an increase in the demand for motor vehicles and break bulk cargoes in the future.

As a result, consideration is now being given to building three wharves on the Port West Estate which can be used for cars and general cargoes. However, there will be a draught restriction of 9.1m on vessels due to the location of the estate up-river of the bar. This development is a long term plan that will take about 7years to be accomplished.

7.1.4 Possible Improvements In planning any substantial alterations for break bulk facilities and services in Brisbane the following factors have been suggested by various parties (e.g. shipping lines,

importers/exporters, stevedores) and would need to be considered:

36  Increase in number of dedicated break bulk berths or general purpose berths.

This could necessitate differentiating dedicated car berths from general purpose berths to facilitate improvements on berth availability for break bulk cargoes.

Possible construction planning or extension to provide more satisfactory amounts of undercover storage space;

Improvements to methods of cargo receival and delivery procedures e.g.

operational hours, terminal-transport operator coordination in order to reduce overall congestion;

Adjustment of port authority charges and terminal operator charges to make them more competitive;

Repairing or strengthening of the deck where necessary.

7.2 Port Kembla Port Kembla is well positioned to connect with Sydney and regional New South Wales the largest market in Australia, making it an important gateway for import and export activities. The port is currently undergoing major expansion to capture new business opportunities—the growth of general and break bulk cargoes, containers and motor vehicles and coal exports. Ship visits in 2007/2008 totalled 760 which exceeded the target expectation by 11%.

The Port Kembla Port Corporation (PKPC) is a NSW State Government corporation responsible for port and shipping management at the Port. In the 2007/2008 financial year, trade through Port Kembla increased by 6.6% to reach a new record of 27.3 million revenue tonnes, which represents approximately 20% of the total trade throughput of three major NSW seaports (Annual Report and Economic Impact Study).

The net operating profit after tax in 2007/2008 was A$12.1 million above the budget estimate and was almost double that of 2006/2007. The PKPC Annual Report states that this favourable outcome is predominately driven by the export of coal, coke and steelfinished products in which the coal and coke export volume increased by 10.6% over the previous year. The volume growth in steel products contributed another 9% (PKPC

- Trade & Cargo).

The principal break bulk cargoes handled at Port Kembla are steel, timber, machinery, paper pulp, boats and construction material and equipment which account for 32% by volume of its total overseas imports (Figure 8) and 15% of total overseas exports (tonnage basis) (Figure 9).



–  –  –

In the Inner Harbour AAT Terminal berths 103 and 105 to 107 are the berths used for unloading/loading break bulk cargo as well as unloading motor vehicles.

BlueScope Steel terminal berths 109 and 110, a RoRo berth, are adjacent to its steel making plant and are used for exporting finished steel products and importing raw steel products. Other Bluescope berths handle imports and exports of bulk raw materials e.g.

iron ore and coke.

Berth 104 is the bulk Grain Terminal (Grain Corp) which is not only used for grain export/import but is also available for motor vehicle and break bulk operations on as needed basis. In the Outer Harbour, in addition to existing break bulk berths, new general cargo berths have been planned in Port Kembla’s development blueprint in the Outer Harbour as well.

The Coal Terminal berths are 101 and 102. 7.2.1 Break Bulk Cargo Traffic

Port Kembla was initially established to handle dry bulk cargoes such as coal and coke exports and later steel products and raw material imports principally iron ore. The Grain Terminal was later established at the Inner Harbour adding to dry bulk cargo which still accounts for the majority of total cargo trade handled through the port. The PKPC is keen to diversify cargoes further to add to the general and break bulk cargo, cars and containers now handled.

To illustrate, 99% of overseas non bulk export cargo in 2007/2008 was steel products manufactured by BlueScope Steel (Figure 10). The principal break bulk imports carried by shipping lines for discharge at Port Kembla are steel products, timber products, machinery and farm equipment, water craft and wind turbines. General cargo and steel products represent 86% of total overseas imports for which various importers are involved. PKPC stated that a large proportion of steel imports are ready-to-market steel products from Japan, China and Korea and are imported by CMC and Stemcor.

–  –  –

Figure 10: Break Bulk Exports (overseas) Figure 11: Break Bulk Imports (overseas) at Port Kembla at Port Kembla 38  A substantial amount of machinery and equipment imports e.g. mining machinery and farm machinery are imported by Caterpillar. Another caller at Port Kembla discharges paper pulp cargo as well as wind turbines and associated equipment. It is worth mentioning that 280 wind turbines sets were discharged at Port Kembla in 2008. Two Lines commented that the import of this turbine equipment is expected to increase during 2009 and in the following years. The PKPC also expect a steady trade in the volume of break bulk cargo coming through the port which will have significant economic benefits for the Illawarra region (PKPC – Trade Opportunity).

7.2.2 Existing Port Operations Ship Visits Port Kembla can be classified as one of the most prominent break bulk ports in Australia with 70% of major carriers loading and unloading their break bulk cargoes through various facilities at the port. One line had 65 ship calls at Port Kembla in 2008.

The size of vessels carrying break bulk cargo mainly falls into the range of 15,000dwt to 30,000dwt. However, large RoRo vessels especially Wallenius Wilhelmsen vessels up to 240 metres long are frequent visitors of Port Kembla.

Break Bulk Berths and Facilities AAT Terminal Description AAT Terminal is the main break bulk facility at Port Kembla and is used by all break bulk shipping lines. The dominant cargo handled at the terminal, in addition to break bulk cargo, are new motor vehicles. AAT provides three mobile cranes and a wide range of cargo handling equipment including forklifts suitable for RoRo ships. This

facility consists of four berths in the Inner Harbour of Port Kembla as follows:

Berth 103. A A$40 million construction project completed in November, 2008, converting the old ANL RoRo berth to a new general cargo berth.

At 200-metre in length and a depth alongside of 12.3 metres, the berth is able to accommodate up to Panamax sized vessels. Nonetheless, the typical size of vessel visiting Berth 103 is usually in the Handymax range (35,000 tonnes to 58,000 tonnes).

AAT is planning to move one of its land based cranes from Berth 107 to Berth

103. Other shore side facilities are also provided to handle all kinds of break bulk cargoes including oversize cargoes e.g. wind turbines.

Berths 105 and 106 were originally designed for handling container and motor vehicles although at this stage the number of containers handled is small. The continuous length of Berths 105 and 106 is 550 metres which enables two large vessels to dock simultaneously; the depth of water alongside is 15 metres. Due to the limited volume of container traffic, this berth is currently a dedicated car berth which can be also used for break bulk cargo.

–  –  –

Berth Priority At the AAT Terminal, first-arrive-first-berth approach is applied to all berths except at the dedicated car berths 105 and 106. In addition to routine first priority to PCC/PCTCs, depth dependent vessels also receive an 8 hours berthing window priority as well as the priority for pilotage and tug allocation. This is the same as the priority protocol at AAT Fisherman Islands Terminal.

Shipping lines and agents indicated their dissatisfaction with this procedure. However, the CEO of the PKPC, Mr Dom Figliomeni, emphasised three points that he believed justified this procedure.

1. The discharge time and storage time for cars is short which will not greatly affect break bulk cargoes’ operation.

2. Port Kembla is offering maximum flexibility of berth operations that will enable the delivery of break bulk cargo to take place at other alternative berths. In particular, the depth of most berths is ranging from 12.3m-15.5m which is enough for most all kind of ships carrying break bulk cargo. Despite the 10metre depth constraint exists at Port Kembla Gateway, this facility still can be used for pulp and timber cargo.

3. The corporation pays a lot of attention to minimizing queuing time at berths and is trying its best to avoid congestion.

Cargo storage Both stevedores and the major break bulk shipping lines stated that the storage area at Port Kembla AAT Terminal is sufficient. There is 15,000m2 of shed space at Berth 107 and four small backup sheds at Berth 105-106 provide 18,000m2 undercover storage facilities for weather sensitive cargo. Construction was completed in November, 2008 on another storage shed which provides 5,000m2 for vulnerable cargoes e.g. steel.

AAT Terminal is able to accommodate 26,000-27,000 units of cars which is 3-4 times more than Glebe Island, with space for another 5,000 cars at the PDI Processing Precinct. With sufficient car storage areas, the expected increase in motor vehicle imports in the future is not likely to cause any wharf congestion or threaten the break bulk operation on the wharf.

Although cargo sheds at AAT Terminal have sufficient handling capacity and adequate shed condition, every steel importer and a few shipping lines, are trying to avoid 40  discharging steel cargoes at the AAT Terminal. The reasons, as disclosed by one importer are the excessive facility fees charged by AAT and the impractical storage period for steel cargoes.

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