Fremantle Ports Portfolio August 2021

The Port of Fremantle handled its highest number of containers last financial year, in spite of the COVID-19 pandemic affecting supply chains around the world. In 2020-21, there were 807,061 TEU (standard container measure) handled at the port. This represents a 3.0% increase since 2019-20 and included a full container trade increase of 0.7%. Full container imports were up 5% with major increases due to people buying furniture (up nearly 23%) and household appliances (up 38%). Full container exports were down as hay and animal feed, a major export in containers to Japan for its dairy and horse racing industries, slowed. Wheat exported in containers was also down on the previous year as Western Australia had, in recent years, picked up some overseas markets usually supplied by eastern states that were affected by drought. Now that the eastern states have recovered from drought conditions, they are recovering their markets.

Non-containerised trade in the Inner Harbour increased by 12% mainly due to imports of passenger vehicles (up 29% to 100,907 vehicles), industrial and agricultural vehicles (up 38% and mostly destined for mining and farming activities) and iron and steel (up 26% and destined for house building and other construction industries). Used vehicle imports were up a whopping 131% to 27,575 vehicles. Used vehicles are usually imported from the eastern states by road and rail but this product had a major shift to sea transport due to the pandemic. Cattle and sheep exports were down considerably (34% and 40% respectively) but scrap metal exports rose 15%. This export is influenced by the price of iron ore; when the iron ore price rises, the scrap metal trade becomes more lucrative and increases.

Fremantle Ports' two bulk-handling facilities in the Outer Harbour (Kwinana) handled seven million tonnes of bulk products (a combined increase of more than 11% in trade volume). Kwinana Bulk Terminal started exporting iron ore in February 2021. At Kwinana Bulk Jetty, imports of refined petroleum jumped 236% due to the BP refinery in Kwinana no longer refining crude petroleum. Fertiliser imports increased (UAN up 65% and phosphates up 12%) as a bumper grain crop is expected.

There were 1,523 ship visits (excluding naval visits) to the port. This figure decreased by 109 visits (nearly 7%) from the previous financial year because of a number of factors, not necessarily connected to trade volumes. While livestock vessel visits were down due to the trade decreasing from the previous year and there were no international cruise ship visits due to the pandemic, container vessel visits were down by 56 visits (or nearly 14%) due to major shipping agent conglomeration and larger vessels visiting. Ro-ro (roll-on, roll-off) ships that carry cars, trucks, caravans, campervans and machinery are also getting bigger and carrying more cargo. Fremantle is now being visited by the biggest vehicles carriers ever built. The 200-metre-long ships can carry 8,000 cars on 13 decks.

Fremantle Ports welcomed the Western Australian Government's announcement earlier this month of a new alignment of road and rail bridges to replace the ageing Fremantle Traffic Bridge. In addition to a new traffic bridge, a new rail bridge will be built east of the current rail bridge with both rail bridges operational.

Fremantle Ports CEO Michael Parker said a dedicated freight rail crossing was necessary to reduce truck movements on roads for the community in the years ahead, by putting a larger share of containers on rail: "The new rail bridge will allow freight and passenger trains to be on separate bridges, which will result in more containers being moved by rail and fewer trucks on the road. Currently, freight and passenger services share one rail bridge which restricts the hours that freight trains can travel on the bridge."

Michael Parker started as Fremantle Ports' CEO in early May. Mr Parker was formerly Business Unit President and Managing Director/Chairman of Alcoa Alumina and Alcoa of Australia between 2015 and 2019. Fremantle Ports Chair Ross Love said the board was delighted to have selected, from a very strong field of applicants, a candidate of Mr Parker's calibre to lead the organisation through its next phase of development, planning and sustainable operations. Mr Love said Fremantle Ports' most significant tasks ahead included high-level future planning for the Port of Fremantle, creating certainty for the future by supporting customers' requirements and improving supply chain efficiency, all in the context of State Government intentions for a new container port and terminal in Kwinana.