ACCC welcomes proposal for competitive towage services at Port Hedland

The ACCC welcomes a proposal from the Port Hedland Port Authority to facilitate the introduction of competition in the provision of towage services at the Port of Port Hedland.

The port is Australia’s largest port by annual throughput, and is the largest bulk minerals export port in the world. ^[1] The primary export from the port is iron ore, and users of the port include BHP, Fortescue Metals Group, Atlas and, in the future, Roy Hill Infrastructure.

All vessels entering and exiting the port (other than small craft, such as fishing vessels) must use a towage service provider that has been licensed by the port authority. To date, the port authority has only licensed BHP Billiton Minerals Pty Limited to provide these services to all port users.

Following consultation with interested parties and the ACCC, the port has recently committed to an open, transparent and accountable process to facilitate opportunities for new entrants in the provision of towage services at the port. This followed consultation with interested parties and the ACCC.

“The ACCC welcomes the decision by the Port Hedland Port Authority to facilitate the introduction of competition in the provision of towage services at the Port of Port Hedland,” ACCC Commissioner Dr Jill Walker said. 

“The Port of Port Hedland is one of Australia’s busiest ports and throughput continues to grow. The ACCC considers that the port is likely to be capable of supporting more than one towage operator.”

“Competition in the provision of towage services is likely to result in benefits in terms of service quality, efficiency and price. The process to appoint an additional towage service provider should be genuine, transparent and timely in order to ensure that the benefits of competition are realised as soon as possible,” Dr Walker said.

In light of the port’s proposal, the ACCC has decided to take no further action at this stage in relation to a notification lodged by the port authority which provides protection from legal action for the notified conduct under the Competition and Consumer Act 2010 in relation to the existing towage arrangements at the port.

The ACCC may review this decision at any time. If the ACCC is satisfied that the likely public benefits will not outweigh the likely public detriments of the conduct, it may take steps to remove the legal protection provided by the notification.