Geelong seeks car trade flag: how it stacks up with the stakeholders

Lloyd’s List DCN spoke with Mark Guscott, vice president of Wallenius Wilhelmsen Logistics (Wilhelmsen) for the Oceania region, who said the company has a number of concerns about the Geelong proposal.
Mr Guscott said the first issue is the “possible space constraints”, which would need to be addressed to cater for future growth.
As mentioned above, the proposed lay-down space for the vehicle trade at Geelong is 29% less than the 35ha currently used at Melbourne.
Another source, who asked not to be named, also shared concerns about whether there would be sufficient lay-down area available at Geelong.
“They would need to ensure there’s sufficient lay down area for the cargo. The amount of space the paper has allocated for cars at Geelong is less than what’s currently being used at Melbourne. And that would be an issue,” the source said.
Mr Guscott said there is also “probability of additional cost”.
He made reference to the relocation of the car trade from Darling Harbour to Port Kembla in 2005, which resulted in an additional cost per vehicle moved of about $80.
“This relocation was undertaken with the agreement that the same port charges that applied at Sydney would apply at Kembla. It will be important to see what infrastructure costs will be applied to port users for the proposed Geelong development,” Mr Guscott said.
Wilhelmsen took part in the development of the discussion paper, supporting simulations which demonstrated that Geelong can handle the company’s largest vessel, the Mark V RoRo class, which is 265 metres in length.
However Wilhelmsen is concerned about the effect the relocation will have on vessel operations, Mr Guscott said.
Channel
“The main ‘operational’ concern exists around the narrow channel and ability of Geelong port to cope with a further 700 vessel movements. The channel will only allow one vessel to transit at any one time and car carrying/ro-ro vessels will need a tug to complete the 24km transit due to winds,” Mr Guscott said.
The time it would take a single vessel to transit the channel is between 2 and 2.5 hours, he said.
In support of this view is Bill Thomas, Hoegh Autoliners manager port and cargo operations, who said the company is worried about possible vessel delays.
“We are concerned about vessel delays if the channel is not widened to allow two way movements. In its current state the channel only allows one way movements. Also, part of the proposal looks at the need for new tugs that are considerably more expensive than the current ones in use,” Mr Thomas said.
If the current proposal were to go ahead, companies would face “significant delays and increased costs, which would make Geelong less efficient and cost effective when compared to other ports,” Mr Thomas said.
And according to Craig Heron, Seaway Agency’s line manager, the current proposal would make Geelong less competitive when compared to the other ports and this may “change the traditional stronghold Victoria has enjoyed in the ro-ro market.”
Meanwhile the unnamed source said there are also other efficiencies that could also be problematic.
Analysis
“For example the stevedores would be working out of two sites, which means split labour forces and split equipment,” the source said.
The source said the logistics and overall supply chain will determine if the proposal is feasible, the source said.
“I’ll have reservations until it’s proven that it could work. So far it is just a discussion paper; there has been no commitment from the government, nor any proof or analysis. They are only asking for feedback from the industry at this stage.”
Similarly Rose Elphick, chief executive officer of the Victorian Freight and Logistics Council (VFLC) said the most critical element will be the landside logistics.
“The really important element here is the landside logistics connection and how effective it will work for this specific trade. The auto trade needs have real certainty if they’re going to invest in the car terminal,” Ms Elphick said.
However Geelong may present opportunities for the vehicle trade, granted the infrastructure and supply chain can work efficiently, she said, adding that the VFLC is currently looking into the issue.
“There are some great opportunities at Geelong, such as the use of higher productivity car carrier vehicles, which are more efficient and slightly bigger. These vehicles have to potential to double productivity,” Ms Elphick said.
This would be possible because many car wholesale and storage facilities are located on the south western side of Melbourne, meaning car carrier vehicles can avoid the congested area.
According to heavy machinery carrier Skelton Sherborne, the relocation will also affect the earthmoving and mining sector, as ro-ro vessels are used to transport equipment for these industries.
Perspective
There are a number of issues the government must consider, such as road infrastructure and the availability of AQIS facilities and wash pads in the Geelong port precinct, a Skelton Sherborne statement said.
“From the perspective of earthmoving, construction and industry, there will be an impact on the additional transport and crane hire costs through travel time, lack of availability of service providers for mechanical work and similarly on imported equipment and Wash Pad space,” the statement said.
“There are currently no AQIS-approved premises in Geelong and there will certainly need to be a number of them in operation to provide the space and turnaround of equipment to service the industry.”
Next month the government will carry out a “compilation of assessment and recommended strategy paper for government assessment”.
In December the government’s “strategic decision making” process will begin.