The Port of Newcastle is the largest port on the east coast by trade volume and has the capacity to more than double its current trade. It is undertaking an ambitious diversification program to grow and diversify all trades, including containers.
Last year Port of Newcastle joined other port corporations as an affiliate member and sponsor of the Australian Peak Shippers Association (APSA) and Freight and Trade Alliance (FTA).
Paul Zalai, Director FTA and APSA Secretariat, speaks to Geoff Crowe, Chief Executive Officer, Port of Newcastle.
1. PAUL ZALAI - Geoff, thank you for speaking with Across Borders. What sets the Port of Newcastle apart from other ports?
Our connectivity, capacity and capability. We are one of the best connected ports in Australia with national road and rail links to the berth and plenty of capacity to grow all of our trades. We are therefore well placed.
Our shipping channel is only 50% utilised and can accommodate the largest bulk vessels as well as container vessels up to 10,000 TEU along with some of the largest cruise ships. It's not just the channel capacity, we've got 792 hectares of land including 200 hectares of key portside land available for the right trade and development.
Our connectivity is unrivalled in terms of both road and rail. Newcastle is currently revitalising and reinventing itself to become a true global city and it has the enviable geographic location that offers a fantastic lifestyle for people who live and work in and around the city with great educational facilities like the University of Newcastle, affordable housing and Newcastle Airport.
2. PAUL ZALAI - The Port of Newcastle transferred to private sector ownership in May 2014. Can you provide an overview of your ownership and what the company has achieved since then?
Our shareholders, China Merchants Group and The Infrastructure Fund, have global expertise in the infrastructure sector including ports.
In 2016 China Merchants Group had $1,000 billion in global assets under management across 18 countries including 35 port-related investments.
The Infrastructure Fund is one of Australia's top performing infrastructure funds with an asset portfolio of more than $2.4 billion.
We have a strong and motivated team who are driven and motivated to see trade grow at the port. Highlights include investing $30 million for a new bulk terminal facility, delivering services to the Mayfield Site, optimising the shipping channel via vessel scheduling, survey and dredging to reduce the customer impact of weather events etc, securing the import of 140 plus wind turbines including the largest to enter Australia, welcoming a record 1.3 kilometre long grain train directly into the port, securing Thales Australia to establish a new east coast maritime hub, and achieving $13.5 million in Government funding for a cruise terminal and new mooring bollards to attract more and larger cruise ships to Newcastle and the Hunter region.
During this time the port has continued to handle large volumes of coal, bulk fuel imports and wheat. This has all been achieved while maintaining a strong safety, environmental and social record.
3. PAUL ZALAI - Geoff, you have been CEO of Port of Newcastle for nearly three years now. What is your vision moving forward?
In 2015 when I started with Port of Newcastle we committed to grow our port through a strategy of diversification by design. We are on that journey which means that we want to further develop and design a port that has a very diversified trade base - to be a port that's operating in the future at full capacity. Currently we are only operating at half our capacity and we have a great opportunity to grow existing trades within the port as well as develop containers further, more bulk fuel imports, motor vehicle imports, more coal, to expand agricultural products and mineral concentrates from upcountry and to continue to contribute significantly to the local and state economy.
Currently we trade in over 25 different cargoes including coal. We want to grow existing trades and find new trades. Our vision is to work with our existing and new customers to support and to find ways to improve the service that we deliver and optimise the benefits from load points and the farm gate to the port in terms of supply chain efficiencies and costs, and to provide a competitive choice for both export and import.
4. PAUL ZALAI - Port of Newcastle's intent to develop a container terminal is on the record. A Newcastle container terminal has been flagged several times over the years. What makes now different?
Port of Newcastle is the commercial operator of the port. It has embarked on an ambitious trade diversification strategy. Whilst seeking to protect existing trade we can see the great potential to grow new trade including containers. The market, everyone from the local government areas, growers to the logistics providers and shippers and stevedores, are telling us that they need a container terminal.
It is clear that the capital city ports are now reaching capacity in terms of connectivity and a huge investment is required by the Government to service some of these ports, whereas we have existing and unconstrained road and rail infrastructure that can already service that increasing demand. The Port of Newcastle can be the solution to the population growth and congestion that is occurring in the capital cities. Being only 160 kilometres from Sydney we are well positioned to provide that solution through our port's superior connectivity and ample available capacity.
5. PAUL ZALAI - What are the advantages of a Newcastle Container Terminal for the market?
It gives the market a choice on where to import and export their product, e.g. growers, shippers, logistics providers etc. A Newcastle container terminal could deliver cost savings for exporters in the central west and northern NSW of more than 30% - that's a huge saving for a farmer from Narrabri or Tamworth and goes a long way towards making our industry and our NSW exporters more internationally competitive.
We can build one now – Government and industry don't need to build new road and rail infrastructure – we are already connected to national road and rail networks which have huge capacity for growth.
We are the closest port to the major NSW export production areas, which are major regional centres that also require a lot of imports. The inland rail project is an opportunity for regional areas. The Port of Newcastle already has up country rail connectivity through the Hunter Valley Network which we can leverage off and works closely with the ARTC on realising the benefits that this provides.
Our port has been in operation since 1799 so we have learnt a thing or two about trade and the importance of the port, and the connectivity and using it in the right way as a gateway for trade.
6. PAUL ZALAI - How will you grow containers alongside a huge coal export operation?
We have the vacant land, we have the channel capacity and we have the port capacity to double current ship movements. The coal industry already demonstrates a world class Hunter Valley coal chain model and that is delivered by collaboration from the load points to the coal terminals and all the infrastructure providers and producers in between. A collaborative approach can be applied to the movement of other trade including containers and within the port non coal trade already co exists with the coal trade. Given our connectivity advantages and ample port capacity, there is opportunity for all trades to grow along with new trades.
7. PAUL ZALAI - On behalf of APSA, FTA and our members, thank you for taking the time to participate in this interview. We look forward to working closely with you and your executive team in the years ahead
