When manoeuvring in a port environment a ship can be significantly influenced by the presence of nearby lateral banks. Restrictions due to lateral banks can cause an asymmetrical pressure distribution on the submerged portion of a ship hull, which gives rise to a net sway force and yaw moment. This bank induced sway force and yaw moment can cause a ship to unexpectedly deviate from its course. The development of a swing basin and berth pocket on the eastern side of the main shipping channel in the Port of Townsville, Queensland, Australia has created an asymmetrical lateral bank configuration. Ships have experienced bank effect in this section of the channel causing them to slew off course, making ship-handling difficult and sometimes dangerous. Townsville Port Authority, in collaboration with the Australian Maritime College, conducted a study with the aim to mitigate the effect of lateral banks on ship-handling. The study involved conducting a series of physical scale model tests in the Australian Maritime College towing tank to investigate a series of proposed dredging configurations tor the western side of the main channel. Three different widened channel configurations have been studied, along with three different stepped bank configurations. The bank induced sway force and yaw moment for the proposed dredge configurations have been compared to that for the existing channel case to establish the most suitable channel configuration with respect to the mitigation of bank effect.