City-shaping agenda at Australia’s largest port

As population and container trade grow in tandem, the future of the Port of Melbourne – the largest in Australia – is an exciting proposition in a growing city, says Caryn Anderson.

Covering 5 hectares of land along 21 kilometres of waterfront, Port of Melbourne is Australia’s busiest general cargo and container port, as well as one of the single largest land holders in inner Melbourne.

But the physical location of the port is small in comparison to the geographic area it services, with the port acting as an important trade hub for regional areas across Victoria, southern NSW, South Australia and Tasmania.

Caryn Anderson (pictured), Port of Melbourne’s executive general manager, says trade through the port “is a lead indicator” of the economy it supports.

“Following the GFC we saw a restabilisation of growth rates in the order of three to four per cent. More recently however, strong agricultural production, project investment and consumer confidence has delivered stronger than expected trade growth, with figures currently tracking at six per cent year to date.”

Trade value through the port now exceeds $100 billion annually, as more than 2.64 million TEU – or twenty-foot equivalent units – pass through the docks each year, including on average 7,200 containers and 1,000 new motor vehicles every day.

Located adjacent to the Docklands precinct and a short distance from Melbourne’s CBD, the Port of Melbourne is a ‘city port’, integrated into the fabric of the built environment.

“What was once seen as a challenge in terms of the city port location is a great opportunity as we plan for and grow Melbourne and Victoria,” Anderson adds.

Anderson says strategic planning and investment, both inside the port and beyond the port gate, will be crucial for the Melbourne of the future. 

“With Melbourne’s population set to climb to around eight million by 2051, and compound container trade growth forecast to be three-to-four per cent annually, we can expect to see increasing pressures over port operations, land use and amenity come to the fore.”

Linda Allison, Property Council’s Victorian senior policy advisor for infrastructure says that the Victorian industrial and freight sector has been concerned that other Australian ports have been seeking to increase their market share by heavily investing in infrastructure and technology, potentially leaving Victoria behind.

“The privatisation of the Port of Melbourne is an opportunity to drive efficiencies and attract new investment to the sector. We’re confident the new consortium can deliver this,” says Allison.

In 2016 the Port of Melbourne was leased for years to a private consortium, comprising Australia’s sovereign wealth fund the Future Fund together with QIC, New York-headquartered Global Infrastructure Partners and Canadian pension fund OMERS.

This -year lease provides “a level of investment and planning certainty that was simply not available under changing governments and election cycles,” Anderson explains.

“The transition of Port of Melbourne from a public to a private entity in 2016 has, in many ways, allowed the business to become better placed to meet many of the challenges we face.”

The port lease contains specific conditions and requirements around the maintenance of assets, the development of masterplans, a rail strategy, and the maintenance of open space and buffer areas to preserve local amenity.

“As port manager, or landlord, of this sizeable strategic asset, Port of Melbourne is uniquely placed to take a long-term strategic view of what an efficient and accessible port of the future might look like, and how it might operate.”

Forecasts, including those recently published by Infrastructure Victoria, indicate trade demand of around 12 million TEU – or twenty-foot equivalent units – by 2065, and the state government has acknowledged that the Port of Melbourne’s capacity is expected to peak prior to the conclusion of the lease.

Linda Allison adds the industry needs certainty on future ports planning.

“The Property Council supports Infrastructure Victoria’s recommendation that the future second port should be located at Bay West. While a second port may not be needed in the near future, strategic planning, land acquisition and appropriate zoning should be under way.

“A second port could take a decade to develop. Industry needs certainty that the Bay West precinct has bipartisan support. In time it should become Melbourne’s second major ports precinct so that the industries that support port operations, like freight, logistics and industrial property can co-locate. The precinct will need the right planning controls and infrastructure to ensure its success.”

Meanwhile, as Melbourne’s population expands, redevelopment around the port poses both challenges and opportunities.

The redevelopment of Fishermans Bend, currently in the planning stages, is a case in point. A 480-hectare site previously given over to industrial use, the redevelopment of Fishermans Bend is Australia’s largest urban renewal project, right at the port boundary. As a multi-zone residential and commercial precinct, an additional 80,000 residents and a further 80,000 workers are expected to travel to Fishermans Bend by 20.

“While consideration of how this area will be developed is crucial for the future of Melbourne as a ‘liveable city’, any comprehensive plan must seek to balance population growth with the task of adequately servicing it,” Anderson says.

“Foresight and planning will be crucial, but it cannot occur in isolation,” she says, adding that the notion of amenity “includes the efficient movement of freight”.

“Shaping the Melbourne’s future port will be a key challenge for the growing city, and we will only meet this challenge if we recognise that one cannot grow and prosper without the other,” Anderson concludes.