Competition in Irish Ports

The study

As an island nation Ireland is heavily dependent on its ports and Ireland’s future economic success depends on its ability to trade. Exports have been Ireland’s star performer in recent years. If port charges are unnecessarily high, this will increase the cost of importing and exporting goods.

The study was carried out by the Competition Authority (Authority) following a request by the Minister for Jobs, Enterprise and Innovation under Section 30(2) of the Competition Act 2002 and was carried out in the context of the Action Plan for Jobs 2012. The main focus of the study was to examine whether competition in the sector is working well for consumers and the economy.

Recommendations and outcomes

We found that:

  • Competition between ports is always going to be limited as we are a small island nation
  • Ensuring there is competition within ports is especially important
  • Leasing and licensing arrangements for Lo-Lo (load on-load off) terminal operators in Dublin Port are too long and appear to restrict competition
  • The current licensing arrangements for stevedore services in Dublin Port also appear to restrict competition
  • More data collection and performance measures are needed for effective oversight of the ports sector
  • We made six recommendations aimed at improving competition in the ports sector.

Recommendation 1 – Leasing and licensing of Dublin Lo-Lo terminals

The way that leasing and licensing of Dublin Lo-Lo terminals is managed should be changed to substantially reduce the duration of the leases (sometimes over 100 years) and to change the way in which licences are automatically renewed.

Recommendation 2 – Stevedore licensing

In Dublin Port, at least two new general stevedore licences should be issued. General stevedore licences should be granted to applicants on a fair, reasonable and non-discriminatory basis, or through a tendering process. General stevedore licences should not be automatically renewable. Ports should not require applicants to demonstrate that they will attract new business to the port. Self-handling licences should be granted by Dublin Port Company on a fair, reasonable and non-discriminatory basis. Where stevedore services are provided exclusively by the port directly, this should be clearly justified by the port authorities in question.

Recommendation 3 – Port closure and amalgamation

Policy focus should be on preserving competition and ensuring larger ports are operating efficiently and competing with one another. While port closures may result in lower administrative costs, they are unlikely to enhance competition among ports. The Authority recommends that the Department of Transport, Tourism and Sport should be required to seek the views of the Authority on any proposed port mergers, or that ports with turnovers below the existing merger thresholds should be designated as a class of merger that must be notified to the Competition Authority regardless of whether it meets the merger thresholds.

Recommendation 4 – Management models

The Department of Transport, Tourism and Sport should ensure that effective competition within ports is a key objective for port authorities.

Recommendation 5 – Investment in port-related road and rail infrastructure

It is unlikely that future Government investment in port-related road and rail infrastructure could be justified purely on the grounds of improving competition, and therefore any decision to invest in infrastructure in this context should be carefully considered.

Recommendation 6 – Data collection and performance measures

Data collection and port performance measures are vital in order to analyse the level of competition within the sector and to guide future policy-making. However this study has highlighted a lack of both. The Department of Transport, Tourism and Sport should prioritise the development of performance measures and data collection for the main ports.

We believe that implementing the recommendations of the ports study will contribute to improving Ireland’s competitiveness and economic growth.

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