Australian ports pave way for more competition

Australia’s three largest container ports - Brisbane, Sydney and Melbourne - are moving closer to competition reforms that will bring widespread economic benefit, the Courier-Mail reported.

Each port is moving to break the decades-long duopoly of stevedoring companies loading and unloading ships.

Last financial year, the two stevedores achieved rates of return of nearly 18 percent, more than double the average return on assets for ASX200 companies (about nine percent).

Allowing a third stevedoring company to compete could potentially slash millions of dollars off Australia's import and export costs.

In its paper on The Potential Benefits of the National Reform Agenda, the Productivity Commission in 2006 suggested productivity improvements of nearly 10 percent were possible at Australia's container ports, a saving of about US$143.4 million in 2005-6 dollars.

The commission examined the likely impact of a range of reforms that would provide for more investment and competition in stevedoring.

The commission's estimate of $143.4 million is based on the effect of competition constraining the prices the stevedores could charge. Beyond this, there are likely to be additional benefits to Australian exporters and importers as stevedores would need to be responsive to their customers' requirements for more efficient supply chains.

(source: Cargo News Asia)