Direct Sea Freight

As part of the Commission’s commitment to driving down the cost of doing business in the region, the cost of inbound freight was regularly identified as a key cost barrier for competitive operations for local businesses. The vast majority of freight entering the Pilbara from overseas is shipped in containers from Asian ports to Perth or Melbourne. From there it is de-stuffed, loaded onto pallets and then trucked back north to the Pilbara, a journey of some days.

Seeing a more efficient alternative, in 2018, the Commission, in partnership with the City of Karratha, prepared reports on the commercial and logistical viability of a direct sea freight service from Asia to Dampier or Port Hedland. The findings were extremely positive and projected a reduction of approximately 50 per cent in both shipping time and cost, based on these services obtaining just a 10 per cent market share of goods entering the region. 

The Commission consistently promoted the findings of this work with the shipping industry and the local business community. Building local confidence in a potential new supply route was critical, as it would be the users of the service who would guarantee the future viability of the service. 

The Commission was delighted to understand that the reports were the catalyst for shipping companies to begin planning and investing in a direct Asia to the Pilbara service. Within 24 months of the research work commencing, ANL became the first company to commence operations with a direct Singapore to Port Hedland sea freight service. Two other companies, SeaSwift and Bengal Tiger Line, joined them in early 2021 with services into Dampier.  As the financial year drew to a close, a fourth company, Swire Shipping, was weeks away from landing its first vessel in Port Hedland. 

This is an extraordinary result and a development which could be truly transformational for businesses in the region. While a reduction in import and freight costs will likely be the primary short-term benefit, these services also have the potential to open new export opportunities for local producers and manufacturers. The Commission is encouraged to learn that there are multiple Pilbara businesses already using the service to export large quantities of goods directly into foreign markets, all of which were simply not commercially viable prior to the service commencing. 

The Commission is proud of its role in this transformational development for the region’s economy and is eager to see where it leads.