NSW Ports CEO Marika Calfas provides an update on industrial action at Port Botany, COVID-19 trends and ongoing investment in the ports supply chain.
Throughout the COVID-19 pandemic, we have witnessed its widespread effects on virtually every sector of the economy. One of the notable successes of this period has been the resilience of the ports and freight supply chain. Port Botany and Port Kembla have demonstrated their important role as key trade gateways servicing NSW.
In recent weeks however, significant delays at Port Botany’s container terminals have impacted capacity, productivity, reliability and cost throughout the NSW container supply chain.
While we welcome news that protected industrial action at DP World Australia and Patrick Terminals at Port Botany has been suspended to allow enterprise bargaining to continue, it is critical that these agreements are finalised without further industrial action, to ensure our ports and supply chains continue the efficient flow of goods to support NSW and Australia and avoid further impacting on the NSW economy during this difficult economic period.
Container Supply Chain Congestion
Much has been said about the recent industrial action at Port Botany. In recent months, congestion has built up within the NSW container supply chain caused by a range of factors including protected industrial action at some Port Botany container terminals over an extended period of time, COVID-19 disruptions, weather related port closures, port development activities to improve port capacity and productivity, and the upcoming closure of Sydney’s largest empty container park (24% of Sydney’s empty container capacity) to make way for construction of the Sydney Gateway road.
In September, the expansion of protected industrial action at Port Botany to include all three container terminals significantly exacerbated the congestion issue, such that:
- Many shipping lines introduced shipping surcharges – either at Port Botany or across all Australian container ports of US$285-$350 per TEU.
- Some vessels omitted Port Botany, or suspended bookings to Port Botany, whilst other shipping lines cancelled some vessels to Australia or suspending bookings on certain services to Australia or coastal services within Australia.
- Some importers are having to transport their container cargo overland from Melbourne to Sydney, at substantial cost, others may have to wait an extra 3-4 weeks to receive their cargo by sea from Melbourne.
- Empty container parks in Sydney are essentially full as ships were not evacuating, or not able to evacuate, the full complement of empty containers due to servicing delays.
- Vessel servicing time deteriorated by up to 80% with containers spending extra time waiting on the terminal.
Following the suspension of industrial action at DP World Australia and Patrick Terminals, shipping schedules remain off-window at all ports and may take a couple of months for schedule integrity to be restored.
Containers that should have been handled at Port Botany during September will now be handled during October and November. However we are seeing productivity and capacity improvements at Port Botany following the suspension of the industrial action. As at Friday 9 October:
- There is 1 container vessel waiting to enter Port Botany, 2 container vessels approaching the boarding ground and 6 container vessels at berth. Some vessels have changed the order of their port calls to minimise waiting time.
- There are 4 vessels that are still scheduled to omit Port Botany, with no new omissions announced in the past week.
- DP World Australia and Patrick Terminals have more cranes in operation and greater throughput through their terminals.
- DP World and Hutchison are permitting shipping lines to exceed proforma window exchanges, by agreement, to assist with the evacuation of empty containers. The trade-off being a 1-2 day delay to berth at the terminal at the present time.
- In terms of clearing the ‘backlog’ of vessels and containers at Port Botany we understand that DP World Australia will have cleared the backlog within the next 10-14 days and Patrick Terminals is experiencing up to 21 days delay in scheduled vessel arrivals.
- There are containers that have been delivered, or are en-route to Port of Melbourne, and will need to be transhipped to Port Botany. We understand that process could add up to 3-4 weeks.
We will continue to provide updates on the operational situation at Port Botany as information changes.
NSW trade trends during COVID-19
Over the past seven months, we have continued to see the impact of COVID-19 on the type of trade at Port Botany and Port Kembla.
Investing to support NSW's growing trade volumes
Throughout the pandemic, NSW Ports and port operators have continued to invest in initiatives that will enable the ports to support NSW as our population and trade volumes grow.
Sustainable wharf structures
At Brotherson Dock, Port Botany, we are undertaking a multi-year project to protect and enhance the life of the container berths using an innovative hybrid cathodic protection system which will be offset by renewable energy generation – creating sustainable wharf structures with net zero greenhouse gas emissions. A similar project is also being undertaken to protect the wharf infrastructure at the Bulk Liquids Berth at Port Botany.
Increasing efficiency of landside supply chains
Investment also continues on landside infrastructure to sustainably grow the use of rail to transport cargo and reduce the growth of trucks on our roads. Port Botany is the only container port in Australia with on-dock rail at every container terminal and our $190 million joint project with Patrick Terminals to double on-dock rail capacity at its Port Botany terminal is progressing well, with the first trains expected towards the end of the year. When fully complete in 2023, it will deliver significant benefits for importers and exporters with more capacity and faster train turnaround times.
We continue to progress our $250 million development of the Enfield Intermodal Logistics Centre as a key logistics hub for Sydney. The rail terminal, operated by LINX Cargo Care Group, and logistics warehouses are connected by 18km of dedicated freight rail to Port Botany. Together with other metropolitan rail facilities, these logistics hubs will reduce the kilometres travelled by trucks on Sydney’s road network.
We also welcome progress on the Australian Rail Track Corporation’s project to complete the duplication of the Port Botany Freight Line (3km). The project will support increased volumes of containers being moved by rail to and from Port Botany with improved supply chain efficiency and resilience.
Lastly, we have collaborated with industry to bring online new capacity to increase empty container storage supply in NSW. This includes creation of an additional 4,500 TEU at ACFS in Port Botany which commenced operations in August, and the opening of a new empty container park on Simblist Rd, operated by Tyne Container Services, in June which delivered an additional 5,000 TEU empty container capacity.
These investments in building sustainable infrastructure capacity will ensure that our key port trade gateways can effectively service NSW’s long-term growing trade needs.