DCN December Edition 2019

INDUSTRY ANALYTICS
Container volumes contract
for the second time in a decade
The Australian Competition & Consumer Commission has released its 2018-19
monitoring report for container stevedoring. Here are some key excerpts
A WEAKENING ECONOMY
COMPETITION EVIDENT
and since the third stevedores entered the
dampened demand for stevedoring services
Competition has resulted in further shifts
industry at the east coast ports. Revenue
in 2018–19, with growth rates far below
in the stevedores’ shares of national lifts.
per lift grew by 1.8% to $268.50.
those reported in the previous year,
Most notable was the share of lifts handled
The industry generated $167m in revenue
according to the Container stevedoring
by DP World falling from 44.4% in 2017–18
from infrastructure charges in 2018–19,
monitoring report 2018–19.
to just 39.1% in 2018–19. However, fellow
an increase of 63% from 2017–18. After
The number of lifts made by the
incumbent stevedore Patrick fared much
DP World’s decision to increase charges in
international container stevedores fell for
better during the year, with its share of
Melbourne from around $49 to $85 from
only the second time in the last decade. The
national lifts increasing from 41.5% to
1 January 2019, Patrick and VICT followed
stevedores reported 5.11m lifts in 2018–19,
43.5%, after it reported having won several
with increases of their own. Patrick now
down 0.5% from the previous year. Lifts
new contracts during the period.
has the highest charges in Sydney ($77.50)
of full containers fell by 4.9% while empty
The dominance of the two largest
and Brisbane ($71.50).
containers increased by 14.6%.
stevedores was diluted further in 2018–19.
Industry volumes were slightly better
The combined share of lifts by the two
INDUSTRY-WIDE PROFITABILITY
when measured on a TEU basis, as cargo
firms represented 82.6% of national lifts,
REMAINS LOW
owners continued to increasingly adopt
the lowest on record.
Some industry profitability indicators fell
40-foot containers instead of 20-foot
After just two years of operations, VICT
in 2018–19, continuing the trend reported
containers. The container terminals reported
has now established itself as an effective
in recent years. Industry operating profit
handling a combined 7.88m TEU in 2018–19.
competitor in Melbourne. Its share of lifts
fell by 4.7% to $81.3m and operating profit
This represented growth of 0.2%, the second
in Melbourne more than doubled to around
margin fell slightly to 5.9%. While the
lowest rate over the past ten years.
15% after it won several shipping services
industry’s return on tangible assets was
The slowdown in container volume
during the period. On the other hand,
unchanged at 3.8%, this figure has fallen
growth reflects weakening economic
Hutchison’s share of total lifts in Brisbane
from a high of 27.8% in 2011–12.
activity in goods distribution industries
and Sydney remained at 13%.
While stevedores have had to face
such as retail and manufacturing. In
growing bargaining power of the shipping
addition, the drought in eastern Australia
HIGHER INFRASTRUCTURE CHARGES
lines in recent years, the significant fall
and floods in Queensland negatively
Higher infrastructure charges helped
in this latter figure also represents a
impacted on volumes of various export
commodities such as grain, hay and cotton.
to drive growth in unit revenues for the
stevedores for the first time since 2011–12
much larger asset base due to the new
container terminals in Brisbane, Sydney and
Patrick
60 December 2019
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