In a world-first, the CBH Group, a Perth-based operator of the four (4) main Western Australian grain export ports, has implemented a high tech online auction system to manage port capacity allocation, fluctuating demurrage costs and demand spikes.

Developed by auction technology company Tradeslot, a Microsoft partner and government auction operator (VicForests), the leading-edge auction approach has received ACCC approval in what is seen as a significant step for the grain industry.  

The site provides equitable access and manages the high demand from the grain export industry over its busiest period.  

“The world-first online auction site for ports is critical for the optimal use of the existing infrastructure” says Jesco d’Alquen, Chief Executive of B2B online auction developer Tradeslot.  

“Managing capacity supply and demand is a complex task with many unknowns. Over- or under-allocation of capacity is costly for the port operator as well as for exporters trying to get their grain to the docks.  

“This process of using an online auction will ensure that access to the ports is fair and equitable – an approach that was reviewed and accepted by the ACCC.”  

Port capacity in Western Australia is sold in monthly events that take between 3 and 5 days, with the first auction in October alone transacting almost 5 million tonne of capacity.  

Exporters bid across Ports and timeslots, offering flexibility to shift demand in response to lot prices and giving the operator an accurate picture of demand for port capacity.  

The use of a web-based auction system reflects a growing trend across large resource and logistics companies as well as Government agencies to address allocation problems of various kinds, from telecommunication spectrum to timber, all the way through to carbon permits.

A case in point is the Federal Carbon Permit Auction system which is scheduled to commence operation in 2011. This particular system will use an ‘ascending clock auction’ format which is very similar to the Port capacity auction platform.  

This groundbreaking use of high end auction technology is now an integral component of the WA port operation and a benchmark for related industries.