The Port of Newcastle will axe more than 20 jobs following a significant downturn in trade volumes and revenue last year.
The value of trade at the port dropped by $23 billion, or 32 per cent last year, primarily due to a fall in the price of coal.
Port of Newcastle chief executive Craig Carmody said, while the port had introduced cost saving measures in an effort to maintain its workforce, the ongoing impacts of external factors meant the organisation had been forced to cut 22 jobs.
"Over the past 24 months, Port of Newcastle has been significantly impacted by reduced trade volumes, which means reduced revenue," he said.
"Port of Newcastle charges by the tonne not the price the exporter receives. Along with the rise in interest rates and inflation, this has resulted in increased costs across the business, and considerable pressure has been placed on the Port's financial performance."
The Port of Newcastle is jointly owned by China Merchants Port Holdings and The Infrastructure Fund, which is managed by Macquarie Infrastructure and Real Assets.
The port's board recently signed off on the job cuts to the 135-strong workforce.
"This is an incredibly difficult decision, one that was not taken nor considered lightly."- Port of Newcastle chief executive Craig Carmody.
Staff, who will be cut from across the organisation, were advised on Tuesday.
Mr Carmody said the port would fully honour all consultation requirements for its employees.
"This is an incredibly difficult decision, one that was not taken nor considered lightly," Mr Carmody said.
"However, to ensure our day-to-day operations and services are maintained and to enable us to continue to work towards our strategic objectives and diversification goals, we must make these changes."
In an unrelated departure, the port's chief commercial officer Simon Byrnes announced last weekend that he was leaving the organisation after five years.
"It's with a heavy heart that I have decided to leave Port of Newcastle," he wrote in a Linkedin post.
The volume of coal, the port's primary export, increased by 6 per cent from 136.2 million tonnes in 2022 to 144.4 million tonnes in 2023.
Total trade volumes also increased by 5.2 per cent from 140.3 million tonnes in 2022 to 147.7 million tonnes in 2023.
But the fall in the price of coal was the main factor in the for the drop in the port's overall economic contribution, which went from $71billion in 2022 to $48billion in 2023.
Last year's trading results would have been worse if the Chinese government had not lifted restrictions on the import of Australian coal in 2023. As such, coal exports to China represented a quarter of the port's coal exports in early 2023.
Port of Newcastle chief executive Craig Carmody said last week that the return of China to the Australian coal market was responsible for boosting the port's overall volumes.
"The port's exposure to carrying volume risk is evident, put simply, if China did not lift their restrictions, the port's volumes would have been the lowest experienced in several years," he said.
"Our Clean Energy team will continue to progress the project, and we expect to move into a new phase of our development in 2024," he said.
"Trans-Tasman container operations have already begun. We will consolidate operations across this year as we await the IPART determination on any compensation payable to the NSW government, with a view to expanding into new markets in 2025."
The NSW Parliament passed legislation in November 2022 to try to resolve a long-running dispute over whether the privatisation of the Newcastle, Botany and Kembla ports had imposed unfair restrictions on Port of Newcastle's ambition to develop a large container terminal.
The Independent Pricing and Regulatory Tribunal is assessing how much Port of Newcastle must pay the government in one-off compensation to extinguish controversial container handling fees imposed on the port during its privatisation in 2014.