NSW Ports report takes aim at Newcastle

‘When competition gets too close, release a report’ seems to be the tactic adopted by the current leaseholders/operators of Port Botany and Port Kembla, following a run of successes by the Port of Newcastle with the ACCC and in the media.
The report, by KPMG, on the “long-term container needs of NSW has confirmed Port Botany is the State’s key container port, and a new container terminal will not be needed until the mid-2040s”, they say.
The report claims the NSW Government’s container port strategy, which would see Port Kembla developed as the next container port in NSW to augment capacity at Port Botany, still stands as the most efficient and effective way of meeting the State’s container export and import demands.
The KPMG report, titled Quay conclusions: Finding the best choices for additional port capacity in NSW finds:

  • Premature port investments will result in higher costs for NSW businesses and families;
  • Port Kembla makes the most sense for containers, but only once Botany nears capacity; and,
  • Containers at the Port of Newcastle makes the least sense for NSW and would impose the highest overall costs and offer the lowest overall benefit.

NSW Ports CEO, Marika Calfas, said Port Botany will remain the first choice in container freight. “Port Botany is closer, better and cheaper for most container freight in NSW.
“Port Botany is less than half full, is directly connected to dedicated freight rail, road and intermodal infrastructure and is supported by modern warehousing and logistics facilities in Sydney’s west and south west.
“The KPMG modelling shows Port Kembla is the obvious next choice for the state’s next container port, once Port Botany nears capacity.
“It is less than half the distance to Sydney’s booming west and south west and has better existing and planned freight infrastructure connections than a container terminal at Newcastle.
“It’s the population and business needs of NSW that determine the most efficient container terminal locations.
“NSW container ports are most efficient when close to consumers and connected to the market by good rail, road and intermodal infrastructure.
“Sydney and the south west population is set to grow from 5 million now to 6.5 million by 2036. Port Botany then Port Kembla makes sense as the ports to service this growth and is the right decision for the people and businesses of NSW,” Ms Calfas said.
The report found that 80 per cent of containers are consumed within 40 km of Port Botany, with massive Commonwealth, state and port investments made over the past 10 years to develop a major freight and logistics sector in Sydney’s west and south west growth areas.
According to KPMG’s research, the current proposal for a container port in Newcastle had significant issues including being furthest away from the freight consumption and employment growth in western Sydney and the most expensive to develop, connect and use for containers.
Even with massive taxpayer investments in rail and road projects, a container port at Newcastle would introduce thousands of heavy vehicles onto Newcastle’s streets, the F3 motorway and across Sydney, the report found.
Or does it?
The report is also notable for what it doesn’t reveal, although it is hardly surprising considering NSW Ports paid over $5 billion to the NSW Government for the pleasure of operating the two ports.
A joint study by the state and federal governments into a rail freight bypass of Sydney was reported in February 2012 (page 37).  A container terminal at the Port of Newcastle would provide the container cargo to pay for the new line.
Long-time Port of Newcastle proponent Greg Cameron said: “The [KPMG] report says it was commissioned in August 2018. The purpose of the report is to justify government policy that sees Port Botany as the state’s only port for container ships.
“Port of Newcastle Investments has been making the point that a container terminal will be built if the infamous fee is removed. There is plenty of demand from northern NSW to support a Newcastle container terminal.”
Mr Cameron further said: “ ‘Determining an estimate of public expenditure required to overcome rail constraints between Sydney and Newcastle is difficult, given that transport agencies have not released their estimates,’ KPMG says. Presumably, the studies are confidential because they relate to the commercial viability of building a rail freight bypass of Sydney.
“A container terminal at the Port of Newcastle would provide the base load cargo for privately building and operating a rail freight line to serve all of NSW, not just Sydney.
“Port Botany is the state’s only port with the dedicated facilities required by container ships. Every container ship that visits NSW must use Port Botany. At present, container transportation requires one million truck trips a year at Port Botany. By 2040, the estimated number of container truck trips will be 5 million a year.
“The reason why 85 per cent of containers are delivered within 50 km of Port Botany is because trucking is the highest cost method of transporting containers. The lowest cost method of container transportation is by rail.
“A rail freight bypass line would enable a container terminal established at the Port of Newcastle to operate interchangeably with a container terminal established at Port Kembla. Every container would be railed.
“Intermodal terminals would be established along the rail freight bypass line to maximise logistics efficiency.
“Intermodal terminals established in regional areas would enable very long term planning of the state’s future economic development based on rail transportation of containerised goods,” Mr Cameron said.

Glencore's Chemoil introduces further competition into Australian fuel market

Chemoil, a wholly owned subsidiary of Glencore, will commence physical bunker fuel supply operations from Port Kembla in New South Wales from 2 April 2016.

Subject to final approvals, Chemoil will also deploy a bunker barge, capable of supply both marine fuel oil and marine gas oil, to support its operations and offer bunkering via barge in Newcastle, Port Botany and Eden. 

Chemoil will partner with United Maritime Australia for its barging operations.

Established in 1981, Chemoil is one of the world's leading fuel suppliers (diesel and marine fuels) to industrial customers across the sea, air and land sectors.

Mr Brett Crawford, Manager of Glencore's Oil business in Australia, said: "While Glencore does not own refineries in Australia, our global network and marketing expertise allows us to efficiently and competitively source, ship, store, blend and deliver a broad range of fuels for our customers."

"The addition of Port Kembla will further strengthen Chemoi's supply network throughout Australasia and is an important strategic step for the company as it expands its offering to ship owners, cruise lines, brokers and agents," said Mr Crawford.

Egyptian sailors fly home after wage dispute

A dispute onboard a coal ship at Port Kembla which saw seven crew members refuse to sail the vessel has ended as the men agree to be flown home.

The Illawarra Mercury reports the crew agreed to board flights home from Sydney last night after being paid wages owed.

The industrial dispute started last week when crew members accused the ship’s owner, Egyptian-owned National Navigation Co of halving their wages and prohibiting access to food and water between 7pm and 7am daily.

Maritime Union of Australia branch secretary Gary Keane, who helped resolve the dispute between the Wadi Alkarm's owner and its crew, said it was a good result.

"We're happy enough to have had the resolution, on the industrial side of it, that we set out to do," Mr Keane said.

The boat will remain docked at Port Kembla until the company can send crew members.

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