7.1.4.3  Sector outlook and findings

The Audit projected that growth in the demand for Australia's port services will vary across the nation. Ensuring that investments in ports and the supporting landside infrastructure are delivered in accordance with specific regional demand trends will require planning by governments and service providers.

While containerised trade is likely to grow in accordance with broader population and economic growth, demand for Australia's bulk commodities is likely to exceed domestic GDP growth.

The Bureau of Infrastructure, Transport and Regional Economics recently released forecasts of trade through Australia's ports to 2032-33.207 At a national level, the Bureau forecasts an annual average growth rate of 5.1 per cent between 2011-12 and 2032-33 in the number of containers moved through Australia's ports (measured in TEUs). Non-containerised trade is projected to grow at an annual average growth rate of 3.9 per cent over the same period. Table 21 summarises the results over the audit period from 2011 to 2031.

Table 21: Projected increases in trade volumes through Australian ports - 2010-11 to 2030-31

Source: Infrastructure Australia analysis of Bureau of Infrastructure, Transport and Regional Economics (2014f) data

Demand from China and trading partners in South-East Asia will be a strong driver of economic growth in Australia. It is important that Australian port infrastructure has sufficient capacity to meet this demand.

The Audit found that significant investment will be required in order to ensure that capacity can meet the forecast growth in demand. Key ports identified as requiring investments to ensure that capacity can meet demand in 2031 include bulk ports in Fremantle, the Pilbara, Gladstone, and container ports in Fremantle and Melbourne.

Expanding port facilities can often involve long lead-in times due to requirements to assess and manage issues such as land use controls, dredging, environmental management and improving supporting landside logistics.

None of Australia's major container ports currently have sufficient channel depths or draft limits to accommodate the new generation of 18,000 TEU ships. Sea side infrastructure will need to be improved if Australian ports are to remain major sea freight hubs in the container network.

While there is an important role for governments in supporting the operational requirements of port operators and considering community expectations through planning processes, the commercial operations of Australia's port infrastructure are considered largely self-supporting.

Rising demand for Australia's port infrastructure should allow commercial operators to meet their growing infrastructure demands through user charges and private financing.

While the majority of Australia's ports are operated as private entities, there is an important role for governments from a regulatory perspective. Ensuring that growth occurs efficiently and sustainably is in the national interest.

The sea channels supporting the operation of our ports are also nationally important assets, especially environmental assets such as the Great Barrier Reef and other local ecosystems. This is a key consideration in the planning and operational processes of port and sea freight service providers.

While the Audit projects significant growth in demand for Australia's port services, it is important to consider the implications of this growth for the landside connections required to support the overall cargo supply chains.

Governments will continue to have a key role in supporting the development of intermodal facilities and landside road and rail infrastructure, while facilitating productivity improvements through pricing and regulatory reform and competition policy oversight. Supporting regulatory changes such as introducing curfew-free operations where the effects on local communities are limited can deliver significant productivity improvements.

A bottleneck in landside infrastructure can lead to underperformance of the whole supply chain. For this reason, Australia's best-performing logistics chains in the Pilbara are operated by mining companies that own mines, rail and port facilities. Where ownership of rail and ports is not practical, supply chain coordination is required to ensure that all links in the chain complement each other - a good example of this is the Hunter Valley Coal Chain.

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207.  The Bureau of Infrastructure and Transport’s projections assume a slightly lower rate of growth in GDP over the period covered by the audit. The assumed rate of growth is 2.7 per cent per year, compared to 3.1 per cent per year in the Audit.