2014 International Association of Ports and Harbors Mid-Term Conference
8th April, 2014
Thank you for the words of welcome Bob (de la Lande, GM Corporate, Sydney Ports).It is a pleasure to have the opportunity to join you for your mid-term conference.
And I welcome our international contingent of guests to Sydney.
Your association represents the interests of ports and harbours around the world and I would like to acknowledge
* Sydney Ports Chairman Nicholas Whitlam;
* Secretary General Susumu Naruse (Secretary General IAPH).
And respected international experts...
* Communications Specialist and Engineer, Mr Luis Ferreira from the Panama Canal Authority;
* Dr Yvo Saanen Managing Director of the Netherland's arm of leading terminal design company TBA;
* Chuck Schneider, Vice President Operations, Integration and Automation at California's Cargotec Corporation;
* Tero Kokko, Vice President of Finland's Horizontal Transportation;
and
* from London, Neil Davidson, Senior Analyst - Ports and Terminals with Drewry Maritime Research.
Can I also thank Sydney and Newcastle Ports CEO Grant Gilfillan for the invitation to speak to you today and also congratulate him on his appointment as President of IAPH.
I have met with members of Australia's ports and shipping industry many times and I am pleased to be back at the helm of the portfolio as Deputy Prime Minister and Minister for Infrastructure and Regional Development.
I'm told it is 20 years since Australia had the pleasure of hosting this prestigious gathering, and as I said in your conference program -- I can think of no better host than Sydney Ports Corporation.
From the arrival from England in 1788 of the First Fleet bringing European settlers to our shores through to the present day, Sydney and her ports remain an important gateway to international trade and the global economy.
It is interesting to note that in 1913 Sydney Harbour was the thriving commercial hub of the nation and the Sydney Harbour Trust produced a visionary and strategic Master Plan for future development of the port.
The forward thinkers of 1913 recognised that Australia, the world's largest island nation, the only continent without a land bridge or a lander border was going to need efficient and productive waterfront operations to cope with the import/export task.
I doubt they would comprehend what that task has grown to today.
The Coalition Government's message to the global trade community is that Australia is most definitely open for business and, as you know well, much of that business flows through our major ports.
Australian ports manage 10 per cent of the world's entire sea trade, which amounts to $200 billion worth of cargo each year.
Australia relies on sea transport for 99 per cent of our exports by volume while a substantial 20 per cent of domestic freight also uses our coastal shipping routes and regional ports.
The booming cruise industry has seen Sydney Ports investing strongly in new facilities.
Last year a new $57 million facility was built at White Bay and a multi-million facelift is planned for the Overseas Passenger Terminal, along with an extension to accommodate bigger ships like the Queen Mary 2. That work gets underway in September.
But it is not just the cruise industry that is steaming ahead.
While world largely trade remains soft following the GFC, activity through Australian ports remains strong.
Over the past decade, total throughput for our 46 trading ports is up by 418 million mass tonnes, or close to 68 per cent.
Total international cargo handled by Australian ports increased last financial year by just over 9 per cent (9.1 per cent) by value.
Latest two-way trade figures are due to be released this month but for the year ended June 2012, it totalled A$625 billion, around 43 per cent of nominal GDP and up more than 9 per cent on the previous year
Australia's top two export items, iron ore and coal, were valued at A$111 billion accounting for 35 per cent of Australia's total exports of goods and services.
And on that note, I am pleased that this conference includes discussion around bulk ports.
Australia operates some of the biggest in the world including Sydney's historic sister Port of Newcastle -- Australia's first commercial export port and today the world's largest coal export port.
At Newcastle, coal-handling capacity has more than doubled in the past eight years with further capacity expansion underway.
Around the country, Australia's bulk ports have witnessed extraordinary growth in the last decade, with tonnage rising by over 75 per cent. Mining exports account for most of this growth.
The growth in activity has been achieved by expanding port infrastructure capacity along the logistics chain.
For example, Western Australia's Port Hedland -- the world's biggest bulk export port -- has expanded its iron ore handling capacity five-fold in the last decade and iron ore capacity has more than doubled at Dampier and Cape Lambert.
Last financial year the total through-put at Port Hedland was more than 288 million tonnes, and this year it is expected to exceed 320 million tonnes -- a jump of 11 percent.
It is Australia's trade with Asia-Pacific Economic Cooperation (APEC) economies that underpins this growth - representing 70 per cent of total trade worth almost A$450 billion.
Eight of Australia's ten largest trading partners are within Asia, reflecting our strategic location and increased economic participation within this fast-growing region.
China, Japan, the United States and the Republic of Korea are the nation's top four trading partners -- they have been for several years -- and that is unlikely to change.
Our biggest container ports - here in Sydney, Melbourne and Brisbane - have also experienced strong growth over the decade - mainly in imports.
Sydney up 75 per cent, Brisbane up 72 per cent, Melbourne up 62 per cent -- rates well above GDP growth over the same period.
Importantly, our container ports have also seen improvements in multifactor productivity of about 20 per cent over the last decade -- well above economy-wide productivity performance which has declined slightly over the same period.
Berth productivity at all our container ports is now equal to, or better than, comparable international ports .
New technology has contributed greatly to this excellent report card, but many believe there is plenty of room for improvement.
Our ports handled more than 32 thousand cargo ship visits last financial year - and it's been increasing by more than five per cent a year for the past five years.
Australia's bulk commodity exports and metropolitan container imports are both expected to double in size every 10 years.
With that growth comes an equally strong need to harness smart stevedoring technology and improve the intermodal connections of our landside transport modes, to boost the efficiency of the supply chain.
I was in Brisbane recently for the official opening of Hutchison Port Holding's new container terminal.
Brisbane is the fastest growing container port in Australia, and the entry of Hutchison Port Holdings helps place the Port of Brisbane at the cutting edge of stevedoring technology.
It also ends the duopoly that has existed on our waterfronts for many, many years and formally marks the entry of one of the world's largest port developers and operators into Australia.
The automated stacking cranes and other systems are significantly increasing container handling capacity and are providing a smooth and efficient flow through the terminal which of course means better service to shipping lines, importers and exporters.
IMPROVING PORT ACCESS AND CONNECTIONS
Better service means increased productivity and the Coalition Government recognises that the time has come to ensure that our freight infrastructure including road, rail, intermodal terminals and ports, is geared to meet growth.
We understand that transport network planning for freight has to cross traditional modal barriers and fully capture issues associated with ports and broader land use planning.
We are working closely with the states and territories on port and freight initiatives to ensure that these critical linkages are strengthened to unlock the full potential of our ports.
This includes investigation of a dedicated 24/7 rail freight link from the Melbourne to Brisbane Inland Railway via the Acacia Ridge Intermodal Terminal to the Port of Brisbane.
This line would not only feed the Port but also connect the mines and agricultural regions of South East Queensland and Northern NSW to international markets.
Here in Sydney one of our great transport challenges is boosting productivity, improving transport links and reducing road congestion in Australia's biggest city.
As we speak, 85 per cent of containers originate from, or are destined for, a location within 40km of Port Botany.
When you consider container handling is expected to double to 3.2 million TEU (Twenty-Foot Equivalent Unit) by 2020, we face a major challenge necessitating ongoing improvements to rail infrastructure at Port Botany.
The Australian Government is investing $75 million to get Stage 3 of the Port Botany Rail Line Upgrade underway to increase load capacity and complement existing works... but more needs to be done.
We have also established a Government Business Enterprise, the Moorebank Intermodal Company, to facilitate the delivery of a one of the most important freight infrastructure projects being developed in Australia.
Moorebank is a major intermodal facility in the south west of Sydney and will include a rail 'port shuttle' between Port Botany and the 220 hectare precinct that will incorporate warehousing and a separate terminal for interstate freight.
These investments will go a long way towards alleviating congestion at the busy Port Botany/Sydney airport precinct.
Of course, Australia's distance from the major global trade hubs is the one thing we can do nothing about -- but it does put added pressure on our ports to offset the higher costs of shipping with best practice port and landside efficiencies.
It is clear that with the continued growth of freight through our ports, opportunities will need to be explored to ensure land freight capacity continues to meet the demands of our ports.
We have to ensure that our ports, and indeed our shipping industry, are productive and competitive in the global market place.
COASTAL SHIPPING REFORM
Right now our domestic shipping industry is treading water, bound in red tape and unable to be competitive on international waters.
If allowed to continue without removing the previous government's tangle of dead weights, the industry will sink to the bottom of the harbour.
There is a growing disparity between the cost of shipping domestically and the cost of shipping to Australia from overseas.
Too often we hear that it is cheaper to freight goods from overseas than ship them from one Australian port to another. Attempts to save jobs or Australian ships may be costing jobs in Australian industry.
We must turn this around and our new government is getting on with the job.
Today I am launching an Options Paper canvassing reforms to relieve the shipping industry of costly and cumbersome red tape.
The Paper includes a separate analysis of the appropriate regulatory settings for the cruise industry.
As an island nation, Australia's competitiveness, to an ever-growing extent, depends on local industries exporting our world-class products overseas in the most cost-effective way possible.
The Options Paper is available from my Department's website and I strongly encourage all with an interest in the future of this industry to make submissions by the May 31 deadline.
CONCLUSION
In closing today, I would like to acknowledge the joint work that has been undertaken between governments, port authorities and industry.
This work has been crucial in encouraging long-term thinking and the sharing of best practice and performance information to drive the development of efficient, safe ports, fed by seamless landside supply chains.
Much of what we have achieved in Australia has been learnt from observing best practice around the world of from the global participants who invest in our industry.
Conferences of this calibre are an excellent ideas factory for local and international stakeholders to share their experiences and contribute to finding the best solutions.
Once again, I thank you for the opportunity to speak to you today and it is my pleasure to declare the 2014 International Association of Ports and Harbors Mid-term Conference open.
Thank you.
[ENDS]
