Australia’s ports drive trade but face inefficiencies; investments aim to ease bottlenecks and improve freight productivity.
Every hour, thousands of tonnes of goods move through Australia’s ports – fuelling industries, sustaining jobs, and connecting the nation to global markets.
From iron ore in the Pilbara to consumer goods arriving at Port Botany, maritime trade underpins nearly every sector of the economy.
Ports Australia’s inaugural State of Trade report quantifies this impact, highlighting $650 billion in trade value and nearly 700,000 jobs directly linked to port operations – 99 per cent of Australia’s international trade.
Each year, 31,000 vessels move 1.6 billion tonnes of trade, along with 1.25 million cruise passengers. Iron ore leads exports at 36 per cent, followed by coal (14 per cent) and agriculture and food (13 per cent). Mining accounts for 64 per cent of total export value.
On the import side, oil, gas, and fuel represent half of inbound trade by volume, while seven million containers carry essential goods, including building materials and machinery.
All economic weight, challenged productivity
Despite their economic weight, Australia’s ports face mounting challenges, leading to congestion and bottlenecks. Infrastructure struggles to keep pace with growing demand, creating logistical headaches across supply chains.
Mike Gallacher, CEO of Ports Australia, emphasised the often-overlooked role of ports in sustaining industries and communities.
“This inaugural State of Trade report provides a snapshot of Australia’s port industry unlike anything we’ve seen before,” Mike says.
“It highlights the interconnectedness of key industries and supply chains, allowing us to plan for the future.
“Quite frankly, our security relies on our ports. We need to ensure they thrive so they can connect us to the world into the future.”
Gallacher also points out that Australia’s port landscape is highly diverse, with distinct challenges facing regional and capital city ports.
“There’s the distinction between import-related ports and export-related ports,” he says. “For Australia, decarbonisation and fuel security remain key challenges. We need certainty around future fuel types to ensure our ports remain globally competitive.”
Another critical issue is cybersecurity. Gallacher highlights the importance of protecting critical infrastructure to maintain operational continuity.
“This isn’t just an Australian challenge; it’s a global issue. How do we keep our ports secure from cyber threats to ensure they keep running?”
Furthermore, the role of international collaboration cannot be overstated. Gallacher emphasises the need for Australia to work closely with regional partners, particularly in the Pacific.
“We are a massive geographical landmass, but we are not a large player in the global shipping debate,” he explains. “Where I see an opportunity for Australia is to bring together New Zealand and the Pacific nations so we can work cooperatively as a region in those discussions on decarbonisation and the downstream effects of it, particularly on fuel and vessel sizes.”
Gallacher adds that Ports Australia has already been facilitating knowledge sharing among Pacific nations, particularly regarding sustainability initiatives and best practices.
“We’ve been doing that for the last couple of years. We don’t deal at the government level; we deal at the industry level. And what we see there is a real thirst from our Pacific neighbours to understand the investment we’re making in research.”
What’s being done?
To address congestion, an investment of $400 million will be made over the next two years to expand the rail terminal at Port Botany.
The project, starting in June, will introduce five new rail sidings for 600-metre-long regional trains, boosting productivity at one of Australia’s key ports.
In addition, NSW Ports is investing $148 million in a new rail facility. Once completed, the upgraded infrastructure is expected to more than double annual throughput, from 400,000 to 1 million twenty-foot equivalent units (TEUs).
Marika Calfas, CEO of NSW Ports, highlighted the significance of this investment:
“This collaboration with DP World continues the growth of on-dock rail capacity at Port Botany, supporting the state’s import and export trade.”
With these investments, the industry aims to ease bottlenecks, improve supply chain efficiency, and reduce reliance on road transport, ensuring ports remain a critical link in Australia’s trade future.
Preparing for future shocks
While COVID-19 disrupted industries globally, Australia’s ports remained resilient. Gallacher recalls how ports adapted quickly to health protocols to ensure trade continued.
“During COVID, while air travel virtually stopped, ports never closed,” he says. “All the protocols we put in place ensured operations continued, and we only had one confirmed case among port pilots in the far north of Queensland. That speaks volumes about our preparedness.”
Looking ahead, Gallacher believes preparedness for future global shocks is crucial.
“We need to ensure our ports remain competitive by continuing to invest in infrastructure and improving productivity,” he says. “Ports Australia plays a key role in sharing knowledge across the region, ensuring we stay ahead of emerging challenges.”
Australia’s productivity also comes into question when compared internationally. While many point to the potential for larger container ships to increase efficiency, Gallacher cautions that bigger vessels bring additional challenges.
“People say we should just go to larger ships, but there are many questions that need to be addressed,” he says. “Is our population demand strong enough for larger vessels? What would larger vessels mean for congestion in our capital cities? What impact would they have on dredging requirements and on-water changes?”
Gallacher highlights that while bulk exports such as iron ore and coal maintain high productivity, there is always room for improvement.
“There is continual room for improvement on both sides, in terms of organised labour and the port terminal operators themselves,” he says. “We need to ensure that as vessel sizes grow and productivity gains come from larger ships, our rail and road infrastructure is also prepared.”
The future of Australian ports is closely tied to strategic planning, government collaboration, and industry investment. As demand grows and trade patterns evolve, addressing productivity challenges will be critical to ensuring that Australian ports remain globally competitive for decades to come. ν