WAITING at Sydney Airport for a Monday morning flight to Canberra, Peter Sturrock picked up a copy of the Australian Financial Review.
The year was 2005 and the then-CEO of the Federal Chamber of Automotive Industries had been at the front of an intense lobbying effort after the New South Wales government decided to move the majority of the state’s freight task away from Sydney Harbour.
The push had culminated with a meeting with two ministers, Joe Tripodi and Eric Roozendaal the previous Friday. Mr Sturrock thought his efforts had won over the politicians.
“I was given what I thought was a commitment from them that they hadn’t made a decision, and the government was still thinking about it,” Mr Sturrock told DCN.
That day’s copy of the AFR proved otherwise. Premier Morris Iemma had announced that all NSW vehicle imports would now pass through Port Kembla.
“Clearly they had made their decision and they went against our recommendations and it remained at Port Kembla.”
Two decades later, as the NSW government prepares to make another decision about the future of Glebe Island, the consequences of 2005 highlight the folly of moving freight without a plan to connect the port inland.
Cars unloaded at Glebe Island. Image: The Federal Chamber of Automotive Industries
The genesis for the radical change was a report released in October 2003 by then-NSW Premier Bob Carr.
The so-called Ports Growth Plan determined the vehicle import terminal at Glebe Island would be wound up, with the growing number of new cars imported to NSW to be received at Port Kembla.
This plan kicked off a furious lobbying effort by industry and advocates. Mr Sturrock was the voice of the vehicle industry, which feared the cost of new vehicles would increase and there were not adequate connections between Port Kembla and the car yards of Western Sydney.
While recognising that Glebe Island “had an end date” the industry favoured moving imports to Newcastle.
“It was very clear that we needed to consider the port that could be easily accessible to the major freeways.”
Others, including the shipping lines and the operator of Sydney Ports preferred retaining vehicle imports at Glebe Island, given recent investments in car handling facilities.
P&O informed a parliamentary committee at the time that Glebe Island was the most efficient car terminal in Australia.
But the case for Port Kembla was also strong. A who’s who of Illawarra representatives lined up before the same inquiry to state the case for a greater role for Port Kembla.
Once the manufacturing powerhouse of NSW, by the early 2000s the Illawarra had staggering levels of poverty and unemployment, with Port Kembla itself afflicted by high youth suicide rates.
The future of Port Kembla also looked shaky. The port’s primary export was thermal coal from the western coalfields near Lithgow and volumes were declining.
The advocates from the ‘Gong wanted the container trade to come to town, but also noted the “success” Port Kembla had in handling car imports during the Sydney Olympics. Eager to secure jobs and investment, some said that the existing road and rail infrastructure would be enough to serve an expanded terminal.
Ultimately, this won over the government, with Mr Sturrock noting the political dynamics at play.
“The government was very keen about going to Port Kembla, I suspect because that local electorate had Labor and a need for further financial support.”
A critical factor in the move of the car trade from Glebe Island to Port Kembla was the question of cost. Car importers made the case that increasing freight costs would increase the price of a new car.
Looking back now, Mr Sturrock, who led the FCAI until 2007, said this was less significant a factor as expected at the time. Some estimates put the additional cost at $100 to $150 per car by 2008. Rather, the limited connections between Port Kembla and the Sydney basin have proven a challenge.
“All the vehicles, they’re loaded onto semi-trailers, which carry seven, eight, nine, vehicles, they’d be crawling up the hill back into Sydney,” he said.
“The return journey would be empty, B-double semi-trailers whizzing down and that would create a significant risk, traffic wise.
“It was a very poor road for heavy duty transport.”
Belatedly, the government is spending millions upgrading the Mount Ousley interchange and Picton Road, both notorious blackspots, with dozens of motorists losing their lives on the roads. In addition, the freight industry’s concerns about the overloaded South Coast Line were belatedly illustrated in 2023, when heavy rains damaged both rail lines serving Port Kembla and a lane on Mount Ousley was washed away, limiting access.
At the time of the decision to move vehicle imports from Glebe Island, the government dismissed calls for the completion of the Maldon to Dombarton rail link, calls that have since resurfaced.
There have also been suggestions that the decisions taken in the early 2000s played into the monopolisation of Australian ports by a limited number of industry players. The proposal to extend the life of Glebe Island terminal, submitted by AAT, would have operated on a multi-user basis, according to a federal court statement by former Sydney Port Corporation CEO Gregory Martin, allowing access to third party stevedores.
However, the automotive industry alleged that AAT, which operates the Port Kembla, Port of Brisbane and Port of Melbourne car import facilities, is able to use its monopoly of east coast vehicle import ports to raise prices unilaterally and that no new stevedores have utilised AAT’s automotive port terminals.
“The effects of leveraging the market power of AAT’s bottleneck monopoly automotive terminals into the automotive stevedoring services market are so great that no independent third party stevedore can enter the market,” the FCAI said in submissions to the ACCC in 2009.
The decision to shift car imports from the heart of Sydney to Port Kembla casts a long shadow to this day. As the government contemplates what to do with Glebe Island and potentially displacing construction materials imports, it may not be the marginal additional cost of construction materials that is the deciding factor.
Instead, it is the connections between the port and markets, where suburbs and commuters bear the brunt of sharing the roads with b-doubles, where the legacy of the decision is felt.
With local businesses in the Illawarra already saying Picton Road is full, and a lack of any additional freight rail paths, without significant investments in the billions of dollars, any move to shift more of the freight task away from Sydney and to the Illawarra would only compound the decisions made in 2005.