2014 International Association of Harbours and Ports Mid-Term Conference



08 April 2014

Four Seasons Hotel, Sydney

Thank you very much, Bob (de la Lande, Sydney Ports Corporation), for that welcome, and it's certainly a pleasure to have the opportunity to be at this important world conference today.

I particularly welcome the international visitors who are in Sydney. I hope you enjoy what is one of Australia's great harbour cities and, indeed, the place where more Australians live than in any other part of the continent. We are always proud and pleased to welcome visitors and I hope that your conference is fruitful, but that you also enjoy Australian hospitality while you're in our country.

Your association represents a very wide range of people involved in the ports and harbours around the world and can I particularly acknowledge today Nicholas Whitlam, who is chairman of the Sydney Ports Corporation, the Secretary General, Mr Susumu Naruse, the Secretary General of IAPA, and, of course, many other respected international visitors.

You've come from all around the world. You bring to a conference like this many ideas from your own experience, but hopefully come also to learn.

As a nation, an island nation, Australia has had to learn much of what we know about international commerce and business from listening and talking to others. But in other areas, we've been able to be leaders, to develop new technology and to find ways in which we can bridge the gap between our island continent and the rest of the world.

Can I particularly acknowledge at this conference also the Sydney and Newcastle Ports CEO Grant Gilfillan for the invitation to speak today and to also congratulate him on his appointment as the president of IAPH.

I've had the opportunity of meeting with members of Australia's ports and shipping industry many times over the years and I'm pleased now to be back with the privilege of government and involved in portfolios directly related to the ports industry.

The provision of infrastructure, transport, regional development all fall within my particular ministerial responsibilities and they are areas which I consider to be absolutely fundamental to the growth and progress of our country and our linkage with the rest of the world.

You’ve just heard that it's 20 years since Australia's had the pleasure of hosting this prestigious gathering and, as I said in the introduction to your conference program, I can think of no better host than the Sydney Ports Corporation.

From the arrival from England in 1788 of the first fleet bringing European settlers to our shores right through to the present day, Sydney and her ports remain an important gateway to international trade and the global economy.

It's 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 as the world's largest island nation, the only continent without a land bridge or a land border, was going to need efficient and productive waterfront operations to cope with the import/export task. But I doubt they would have comprehended that the task that they spoke of then has, indeed, blossomed and has grown to be the busy port and maritime industries that we have 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 accounts for around $200 billion worth of cargo every year.

Australia relies on sea transport for 99 per cent of our exports by volume while a substantial 20 per cent of the domestic freight task also uses our coastal shipping routes and our 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 Wide Bay and a multimillion dollar facelift is planned for the overseas passenger terminal, along with an extension to accommodate bigger ships like the Queen Mary II. That work gets underway in September.

But it's not just the cruise industry that's steaming ahead.

While the world largely remains soft in its trade 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 nine per cent by value.

Latest two way trade figures are due to be released with month, but for the year ended June 2012, it totalled $625 billion Australian, around 43 per cent of the nominal GDP of our country, and up more than nine per cent on the previous years.

Obviously, free trade agreements, which are currently the topic of discussion with our biggest trading partners in northern Asia will do nothing more than continue to boost those trading numbers.

As we open up export opportunities and make our own doors more open to imported products, clearly the task of our ports will become even more important.

As the globe moves towards more open trade, less tariffs, less obstructions to the free trade of movement of goods around the world, ports play a more important role and Australia which is a country which already has amongst the lowest of tariffs and trade barriers of any country in the world, stands to gain as much as anyone from freer and fairer global trade.

So we're excited about the opportunities that lay ahead. The new optimism and initiatives surrounding the efforts of nations to bring together broad ranging free trade agreements certainly bode well for global trade into the future, and the shipping industry therefore, has a strong, prosperous and key role in ensuring the future of the economies of the world.

I'm pleased to note that this conference is including some discussion about bulk ports.

Australia's top two export items are iron ore and coal, valued at about $111 billion or 35 per cent of Australia's total export of goods and services last year.

Australia operates some of the biggest bulk ports in the world, including, of course, ports like Karratha and Gladstone and Newcastle—Australia's first commercial port which today is the world's largest coal export facility. 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 whole 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 capacity has more than doubled at Dampier and Cape Lambert

Last financial year, the total throughput at Port Hedland was more than 288 million tonnes and this year it's expected to exceed 320 million tonnes, a jump of 11 per cent.

It is Australia's trade with the Asia Pacific Economic Cooperation economies that underpins this growth. That trade represents 70 per cent of Australia's trade worth almost $450 billion.

Eight of Australia's 10 largest trading partners are within Asia, reflecting our strategic location and increased economic participation within this vast growing region. China, Japan, the United States, and the Republic of Korea are the nation's top four trading partners and they have been so for several years, although the order of their priority has changed a little. I think their dominance of our trading relationship is set to continue.

Our biggest container ports here in Sydney and in Melbourne and Brisbane have also experienced strong growth over the decade, mainly in imports. Sydney is up 75 per cent, Brisbane up to 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 multi-factor productivity of about 20 per cent over the last decade, well above economy wide productivity performance, which has actually 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, but many believe there's still plenty of room for improvement.

Our ports handled more than 32,000 container cargo ships 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 ten 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 the Hutchison Port Holding new container terminal in Brisbane.

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.

Our 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 this growth.

We understand that transport network planning for freight has to cross some tradition modal barriers and fully capture issues associated with ports and broader land use planning.

We're working closely with the states and territories on port freight initiatives to ensure that these critical linkages are strengthened to unlock the full potential of our ports.

This includes investigating 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 New South Wales better 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 40 kilometres of the Port of Botany.

When you consider container handling is expected to double to 3.2 million TEUs 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 three 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 enterprise, the Moorebank Intermodal Company, to facilitate the delivery of 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 separate terminals 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 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 the continued growth of freight through our ports, means that 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 marketplace.

Right now our domestic shipping industry is treading water, bound in too much red tape and unable to be competitive in international waters. If allowed to continue without removing the previous government's tangle of dead weights, the industry will simply 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 stories that it is cheaper to freight goods from an overseas country to Australia than to ship from one Australian port to another.

Attempts to save jobs on Australian ships may be costing jobs in Australian industry. We must turn this around and our new Government is intent on getting on with the job.

Today I'm 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 regulatory settings for the cruise industry in Australia.

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'd encourage all with an interest in the future of this industry to make submissions by the May 31 deadline.

On the basis of these submissions we will develop a new policy platform to deal with domestic shipping in this country, in the hope that we can set a target of making it a more prosperous and viable sector, but also ensuring that it plays a much bigger role in the future in our domestic freight task.

Our roads and eventually our rail lines will be clogged. If we are not able to make better use of domestic shipping then our domestic freight task will also stall and that means our economy ceases to grow.

In closing today, can I acknowledge the joint work that's been undertaken between governments, port authorities and industry in this country.

This work has been crucial in encouraging long-term thinking and 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've achieved in Australia has been learned from observing best practice around the world or 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.

So I thank you again for the opportunity to speak to you today and it is certainly my very great pleasure to declare the 2014 International Association of Ports and Harbours Mid-term Conference officially open.

Thank you