AN AGREEMENT that sees Svitzer provide services on behalf of fellow tug company Smit-Lamnalco at four ports has been extended for four years.
In August 2015 the companies settled on an agreement for Svitzer to provide service delivery on behalf of Smit-Lamnalco at Melbourne, Botany and Newcastle.
Under the agreement, both parties maintained their own commercial activities and continued to compete.
The agreement began in August 2015 and was due to expire in mid-2018.
In November 2017, Svitzer and Smit-Lamnalco renewed the existing arrangement in the Ports of Melbourne, Botany and Newcastle by an additional two years until September 2020 and extended the arrangement to Port of Brisbane.
The agreement has been extended by four years for all ports, Melbourne, Botany, Newcastle and Brisbane until 31 August 2024.
Under the extended agreement, Svitzer is to continue to charter six vessels from Smit.
“We are pleased to announce the extension of our existing agreement with Smit-Lamnalco at the Ports of Melbourne, Botany, Newcastle and Brisbane until 31 August 2024,” said Svitzer Australia managing director Nicolaj Noes.
“Since the commencement of this agreement in 2015, Svitzer has continuously provided high quality service in those ports and we are committed to continue to do so.”
Mr Noes also spoke of the safety aspects of the arrangement.
“The extension means we will continue to facilitate and promote safe and efficient operations in each of the ports, preserving competition between both parties and maintaining their direct relationships with customers,” he said.
“We see this as a good solution for the industry and part of our contribution to safer and more efficient ports in Australia”.
Smit Lamnalco commercial manager Aaron Wood said the extension of the towage agreement would allow Smit Lamnalco to continue to provide high standard towage services, while providing an alternative commercial option to the current major player.
Our Australian network has never been bigger, and we welcome discussions with any operator looking at options for their towage,” Mr Wood said.
Smit Lamnalco managing director David Fethers said, “Whilst not perfect, the SLA model at least allows for commercial competition in ports which would otherwise not support two operators”.
“Smit Lamnalco will continue to champion the benefits of exclusive licensing as the only real method of enabling competition in Australia’s natural monopoly ports,” Mr Fethers said.
“You’ve only got to look at the difference in service levels, and the cost of towage between Newcastle and Gladstone to see the benefits.”
In conjunction with SLA, Svitzer is to continue to charter six of Smit Lamnalco’s modern, high bollard pull tugs, which will remain deployed in Australian ports.
These tugs help Svitzer perform its various towage obligations under the SLA, in addition to servicing its own customers efficiently.