Port Botany “inhibiting” Australian growth

Australia: serious congestion at Port Botany in Sydney over the last eighteen months has resulted in significant cost impacts for exporters and importers in the state of New South Wales, and the country as a whole, according to Llew Russell, CEO of Shipping Australia.

"In a seven-week period from September 1 to October 20 this year, twelve of our container carriers alone lost AU$12.12 million (US$12.3 million) over 84 voyages in additional fuel costs as a result of delays waiting at the berth and/or speeding up in an attempt to maintain schedule integrity," said Russell. "Extrapolating over twelve months the cost would be in the vicinity of AU$156 million for only twelve container shipping lines let alone all the container carriers serving the Australian trade. An important issue is the cascading effect on other ports of call in Australia."

Russelll notes that major congestion in one port results in both direct and indirect costs. For example, shipping companies face the requirement to occasionally omit both Australian and overseas port calls to recover the sailing schedule. Omitted port calls create headaches for repositioning containers to meet future demands. Other costs include:

• Re-stow costs because programmed loading/discharge is completely disrupted.  
• Land-bridging costs if another Australian port is used.  
• Additional handling charges and transhipment costs.
• Additional charter hire costs for delays waiting for berths.
• Vessel bunching waiting for a berth.
• Great pressure on empty container parks.

One Shipping Australia member container line advised that over a nineteen-week period Sydney port calls had to be omitted nine times.  The average cost for transhipment for omitting Sydney was AU$110,056, with a high of AU$163,300. On the occasions Sydney could not be omitted it was decided to endure the delay, which resulted in Melbourne having to be omitted twice and overseas ports six times in an attempt to get the vessel back on schedule. The cost of transhipping alone over the nineteen weeks for all port omissions totalled approximately $1.4 million.

Sixty four vessels in the same period were delayed for a combined total of 104 days resulting in additional charter hire costs that equate over US$1.56 million. For one member alone it has directly cost them over US$3 million in nineteen weeks for transhipment and additional chartering costs. Russell pointed out that, while a number of lines have introduced congestion surcharges, these recoveries do not compensate for all direct costs incurred or past losses.