Competition for Australia terminal operators

Competition for Australia terminal operators    The Australian Competition and Consumer Commission said last week it is encouraging the participation of new terminal operators in its major container ports to ensure competitive fees for carriers and shippers.
   The ACCC issued a monitoring report on the competitive situation at its largest ports — Brisbane, Fremantle, Melbourne and Sydney — noting most containers are handled by two companies, domestic company Patrick and Dubai-based DP World.
   The ACCC monitors prices, costs and profits of container terminal operators at the largest container ports as well as two, single-operator container terminals at the smaller ports of Adelaide and Burnie.
   “The ACCC’s report shows that performance of the stevedores was affected in 2008'2009 by the global economic slowdown,” ACCC chairman Graeme Samuel said. “The number of containers handled fell in 2008'2009 which impacted the stevedores’ profits. However, even during these tough economic times, the stevedores were able to maintain prices and achieve rates of returns of close to 18 percent.
   'By comparison, the average return on assets for the (Australian stock exchange benchmark) companies was 9 percent. That the stevedores could achieve such results reinforces the ACCC’s concerns about the degree of competition in the industry. It seems that the stevedores are not forced to compete for business.'
   Samuel said that other operators should be encouraged to compete with the established companies.
   “We have seen in Brisbane and Sydney that there are other stevedores willing to take up the opportunity to compete against the Patrick-DP World duopoly when given the chance,' he said. 'Melbourne, Australia’s largest container port, is reportedly considering whether to bring forward a new terminal development to cope with expected future growth. These opportunities for new entry provide a real chance, now more than ever before, to facilitate more competition in Australian stevedoring.”