OPINION: Infrastructure Australia misses the boat

INFRASTRUCTURE Australia (IA) recently released the IA 2026 Priority List (IPL). I would like to make some comments on the Ports Capacity and Connectivity segment of the IPL Report.

The report comments on the low ranking of Australian ports in the Container Port Performance Index 2024. I have previously commented in the DCN on how some of these rankings do not necessarily represent the true performance of our ports.

The report mentions that “the value of sea freight has increased at an average of 6.4% each year over the five years to 2023-24”. It should be noted that the volume of sea freight has grown substantially less and consequently, port capacity is not as constrained as the report suggests.

Similarly, the report quotes the National Freight Data Hub as stating that container import volumes at major ports such as Brisbane, Fremantle and Adelaide are projected to increase by 34%, 55% and 66% respectively, by 2029-30. These projections are clearly overstated and an annual growth of three percent of container volumes is more realistic.

It also suggests that “vessels of 15,000 TEU could arrive by the late 2020s with 18,000 TEU vessels possible by the early 2040s”. These figures are sourced from the “Westport, 2020, Future Port Recommendations Stage 2 Report” which deals with the establishment of a new port in WA to provide additional capacity once the Port of Fremantle is full.

When designing a port, it is prudent to ensure the port is capable of handling vessels that might be calling in 50 years’ time, hence the above figures are quoted in the Westport Report. However, those vessels will not be calling in late 2020s or early 2040s, if ever, as it is difficult to see how our relatively small population in Australia will be able to sustain regular calls of vessels of this size. Currently some Australian container ports are capable, in theory, of handling 14,000 TEU vessels but none have ever called at Australian ports. The average size of container vessels currently calling Australian ports is 5,000 to 6,000 TEU with the occasional visitor in excess of 10,000 TEU.

The IPL also addresses the issue of dedicated rail connections, or lack thereof, to our ports and mentions the dismal numbers of containers that arrive or leave the port on rail, especially in Brisbane and Melbourne. The most successful port is Fremantle where 20% of container are moved by rail. This is largely due to a generous subsidy by the WA government, owner of the port.

The report makes reference to the Port Rail Shuttle Network in Melbourne and a six-year-old document Our Plan for Rail from the Port of Melbourne, completely missing the point that there is currently no rail connection, and none planned in the near future, to Webb Dock. More than a third of the port’s throughput is currently being handled at Webb Dock East where the port plans to construct another international container terminal to handle more capacity.

Since the opening of the Melbourne Intermodal Terminal in Somerton, the port has offered incentives to shift import containers on rail, but with the majority of throughput of containers in the future being handled at Webb Dock with no rail connection, and unlikely to have one soon due to the high cost, you will have to ask how this will help to increase a shift of containers on rail.

An increase of container on rail at the Port of Brisbane is also unlikely due to significant cost differences between road and rail transport and a large number of logistics providers being situated on Fisherman Island, close to the port.

Most of our capital city ports are privately owned, the exemption being Fremantle, while state and territory governments are responsible for land use, planning of adjacent land and connections to and from the ports. Unfortunately, private owners and governments have different priorities and do not always work together to achieve the required outcomes.

I believe the IPL Report overstates the growth of container volumes and expected size of container vessels calling Australian ports and subsequent lack of capacity of our ports. However, we should not underestimate the importance of our ports and inland infrastructure, especially rail connections and industrial corridors which are required to operate our ports efficiently.