Australia's Maritime Logistics System
This report was released on 9 January 2023. It examines the performance of Australia's maritime logistics system, long-term trends in system performance, competition, industrial relations, infrastructure constraints and technology uptake.
Download the overview
- Overview - Lifting productivity at Australia’s container ports: between water, wharf and warehouse - Inquiry report (PDF - 805 Kb)
- Overview - Lifting productivity at Australia’s container ports: between water, wharf and warehouse - Inquiry report (Word - 2205 Kb)
Download the report
- Lifting productivity at Australia’s container ports: between water, wharf and warehouse - Inquiry report (PDF - 5213 Kb)
- Lifting productivity at Australia’s container ports: between water, wharf and warehouse - Inquiry report (Word - 6619 Kb)
Download the technical paper
- Container port productivity - Technical paper (PDF - 1428 Kb)
- Container port productivity - Technical paper (Word - 2634 Kb)
- Key points
Higher productivity at Australia’s container ports is achievable and would deliver significant benefits.
- Considerable variation in performance both within and across Australia’s container terminal operators points to potential productivity gains from more consistent (high) performance.
- Inefficiencies at Australia’s major container ports directly cost the Australian economy about $600 million a year. Ports also have large indirect impacts on Australian businesses and consumers, so that any sustained disruptions to imports or exports magnify these costs across the economy.
- Australia’s major container ports rank poorly in work that just looks at ship turnaround times. But the international ports with the fastest turnaround times have considerably more capital than they need to efficiently handle current throughput. Use of more capital in Australia would reduce ship turnaround times but raise costs; the outcome would not necessarily be efficient. Faster turnaround times are good, but not at any cost.
Infrastructure needs in the maritime logistics system are being addressed.
- Container port operators are investing to accommodate bigger ships, as are operators in other parts of the marine logistics system. There is no need for government intervention to encourage the use of bigger ships.
- Plans are in place to increase the share of freight moving to and from most major container ports by rail over the coming decades. Any further government investment needs clear cost–benefit assessment.
- All state governments have freight and transport strategies that cover future port infrastructure needs. Evidence does not suggest that more plans are required or existing plans will not be implemented.
- The adoption of technology at Australia’s container ports is broadly in line with international practice.
Workplace arrangements lower productivity — incremental changes to the Fair Work Act are needed.
- Disruptions during recent enterprise bargaining imposed large costs on businesses dependent on maritime freight. The Government has amended the Fair Work Act to seek to limit intractable bargaining, but more effective remedies are needed to reduce industrial action that harms consumers, importers and exporters.
- Limits should be placed on clauses in container terminal operators’ enterprise agreements that are highly restrictive and constrain the ways that workers and equipment can be deployed.
Lack of competition in some parts of the maritime logistics system means consumers pay too much.
- Transport operators have no choice about which terminal they use when picking up or dropping off a container, so must pay whatever price a terminal operator sets. Recent rapid increases in terminal access charges (TACs) have flowed through to cargo owners (and consumers). Voluntary protocols to address terminal operators' abuse of market power should be strengthened.
- Transport operators and cargo owners are paying fees to shipping lines for the late return of containers even where the delay is because empty container parks are full. The exemption for shipping contracts, which means that these fees fall outside the scope of the Australian consumer law, should be removed.
Concerns about domestic shipping capacity and training can be met through modest measures.
- The resilience of Australia’s maritime supply chain could be improved by reforms to coastal shipping and repealing Part X of the Competition and Consumer Act.
- Australian‑flagged vessels are not a prerequisite to meeting maritime skill requirements. If skills shortages were to occur, these are best addressed by cadetships and skilled migration.
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- Preliminaries: Cover, Copyright and publication detail, Transmittal letter, Terms of reference, Disclosure of interests, Acknowledgements and Contents
- How well are Australia’s container ports performing?
- Is market power impeding system performance?
- Infrastructure needs are being addressed
- Workplace arrangements lower productivity
- Skills and training raise few productivity concerns
- Australian ports are adopting technology where desirable
- National shipping concerns
- Recommendations and findings
1. About this inquiry
- 1.1 Context for the inquiry
- 1.2 The Commission’s task
- 1.3 The Commission’s approach
- 1.4 Conduct of the inquiry
2. Australia’s maritime logistics system
- 2.1 What is the maritime logistics system?
- 2.2 Container trade handled by the maritime system
- 2.3 What are the main parts of the system?
3. Container port performance
- 3.1 What the Commission has been asked to do
- 3.2 Motivating concerns about port performance
- 3.3 Why port performance matters
- 3.4 Measuring port performance
- 3.5 A framework for assessing port performance
- 3.6 How productive are Australian container ports?
- 3.7 How do Australian container ports compare internationally?
- 3.8 What are the potential economy wide gains from improving Australian container port productivity?
4. Framework for analysing competition
- 4.1 Why market power matters
- 4.2 A framework for analysing market power
- 4.3 When should government intervene in a market?
5. Market power of port operators
- 5.1 Port ownership models vary
- 5.2 A port is in a market for freight movement
- 5.3 Are Australia’s container ports natural monopolies?
- 5.4 Assessing constraints on market power for container ports
- 5.5 Should there be extra regulation to stop port operators from exercising their market power?
- 5.6 Market power issues have been raised with tugs
6. Market power in other markets
- 6.1 Shipping lines operate in a market for container freight
- 6.2 Shipping lines and container terminal operators
- 6.3 Container terminal operators and transport operators
- 6.4 Use of contract terms in the maritime logistics system as a form of market power
- 6.5 ECPs and transport operators
7. Container port capacity and landside infrastructure
- 7.1 Port capacity and the use of bigger container ships
- 7.2 Road and rail connections to ports
- 7.3 Empty container imbalance and storage
- 7.4 Planning and coordination
8. Workforce arrangements: background and framework
- 8.1 A snapshot of the workforce in the ports
- 8.2 An overview of Australia’s workplace relations system
- 8.3 Bargaining power in labour markets
- 8.4 Effect of workplace relations on productivity and efficiency
- 8.5 The Commission’s approach to assessing potential reforms
9. Workforce arrangements: issues
- 9.1 The content of enterprise agreements unduly restricts the allocation of labour and capital in container terminals
- 9.2 Improving bargaining practices in the ports
- 9.3 Addressing the harmful impacts of industrial disputation
10. Skills and labour supply
- 10.1 Skills and training in Australia’s ports
- 10.2 Labour supply and mobility
- 10.3 Is the skills system equipped to deliver future skills needs for the ports?
11. Technology, information and innovation
- 11.1 Why technology, information and innovation matter
- 11.2 Inquiry participants focused on three key technology, information and innovation issues
- 11.3 Automation and related technologies
- 11.4 Data sharing technologies and trends
- 11.5 Coordination technologies used to exchange documents and clear cargo
- 11.6 International comparisons
12. Australia’s national shipping concerns
- 12.1 Coastal trading faces ongoing challenges
- 12.2 Establishing and sustaining a strategic fleet would be a complex undertaking
- A. Public consultation
B. Restrictive content in container terminal enterprise agreements
- B.1 Introduction
- B.2 Recruitment, promotion and training are based on tenure, not merit
- B.3 Container terminal rosters are very complex raising questions about how well they accommodate flexibility for employers and certainty for employees
- B.4 EAs contain strict rules about which employees can be picked for a shift
- B.5 EA clauses constrain subcontracting
- B.6 Decisions to automate processes are constrained by EAs