The Hurdles and Solutions to the Land Transport task in Australia 13.06.07

The Hurdles and Solutions to the Land Transport task in Australia

13.06.07

Agenda

– The Australian Supply Chain– The Players in the Australian Supply Chain– The Inefficiencies within the Australian Supply

Chain– Why do we need to fix it?– What can we do to fix it?

• Within individual elements• The interdependencies• The role of Governments

– Conclusion

The Australian Supply Chain

Importer Sea

Road / Rail Distribution

Port

Regulation / Policy

Manufacturer

Retailers ConsumersTerminals /

Warehouses / DCs

Infrastructure

Key Players in Australian Supply Chain

Importer Sea Road / Rail

Retailers ConsumersPort Terminals

Regulation / Policy

Australian Government State Governments

Port Authorities

Track Owners (Government and Private)Port Authorities

Road owners (Government and Private)

Terminal Operators

Road operators

Rail operators

Freight Forwarders

Stevedores

Landside Port Logistics & Services

Infrastructure

Inefficiencies in the Supply Chain


Retailers ConsumersPort Terminals/DCs

Regulation / Policy

Fragmented regulatory environment State and Federal jurisdictions Government Interference in port and rail operations Mismatch in infrastructure pricing mechanism for road and rail

Maintenance deficit on track Inadequate port – land interface infrastructure Inconsistent signalling and communications Increasing rents for port land

Infrastructure

Underinvestment in rail terminals (interstate and port related) Complexity in port – land interfaces

Why do we need to fix this?

Total Domestic Freight Task Australian land freight task has been estimated to double between 2000–2020

The task is growing….

0

100

200

300

400

500

600

700

800

196119651969197319771981198519891993199720012005200920132017

Road Rail (Public access) Rail (Private) Sea Air

0

2,000

4,000

6,000

8,000

2000–01 2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10

Con

tain

eris

ed T

ota

l tra

de

('00

0 te

us) CAGR = 9.2%

CAGR = 6.5%

(btk)

Containerised cargo in Australian ports is forecast to grow 6.5% p.a. indefinitely

International Trade


Retailers ConsumersPort Terminals /DCs

Bigger ships Compressed sailing

schedules

Demand is changing…

Manufacturing moving off-shore Higher level of imports Consolidation of deliveries off-shore

Quicker supply chains Increase in time

sensitivity & reliability Lower unit costs

Increased choice Lower prices

Why do we need to fix this?

Environmental sustainability is expected

What can we do to fix it? – individual components



$ Continued investment in rolling stock

$ Broaden range of services

$ Improve reliability of services

$ Encourage freight on rail to achieve environmental and social benefits

$ Continued investment in existing and new terminals

$ Improve rail terminal productivity – through design and operating procedures

$ Construction of more efficient, better located DCs

$ Continued investment to increase quay line efficiency

$ Optimisation of port productivity – through technology and people

$ Modify Govt. policy to allow market forces to drive efficiency, and to motivate investment by private sector

Rail Mounted Gantry

Port Botany - RMGs

Post Panamax Cranes arriving at Port Botany

AutoStrads

Fisherman’s Island






$ Minimise Govt. intervention to allow market forces to drive efficiency








New NHWH coal wagons






$ Modify Govt. policy to allow market forces to drive efficiency, and to motivate investment by private sector








Kewdale Precinct

What can we do to fix it? – interdependencies

Importer Sea Road / Rail Retailers ConsumersPort Terminals/

DCs

$ Joint management of key interface points, such as Port Botany Rail Yard and inland terminals

$ Investment in IT to provide visibility of product movements

$ Joint planning of interfaces to accommodate operational challenges of each (eg time slots, returns of empty containers)

Regulation / Policy

Standardise regulatory environment Not in theory but in practice Ensure it provides reduced complexity and cost

Clarify and manage State and Federal jurisdictions Clearly identify areas of accountability Clearly identify areas of collaboration / joint investment Establish working groups as required to tackle real challenges, rather than

finger pointing

Minimise Government Interference in port and rail operations Government monitoring must reflect output measure Focus must remain on achieving maximum efficiency of ports

Balance infrastructure pricing mechanism for road and rail to ensure appropriate

Provide incentives to operators and shippers to utilise more environmentally conscious technologies, operating models and equipment

What can we do to fix it? – Government’s role

Reverse maintenance deficit on track Government (Auslink, ARTC and States) increase

expenditure on rail networks, linking ports and major centres

Improve port – land interface infrastructure Governments (Auslink, ARTC and States) increase

expenditure on enhancing port – land infrastructure Governments to provide land and zoning for private sector

development of inland terminals and new interstate terminals

Standardise signalling and communications Government financial contribution to move to standard, world

best practice signalling and communications nationally

Infrastructure

What can we do to fix it? – Government’s role

The Saudi Model

• Over 1000 km of new track• Over 1000 km existing track to be

upgraded• All to be built to AAR standards• 50 years single freight operator

concession• Government capital contribution

to construction costs• Government gifting of rail corridor

Conclusion – Our skinny constrained supply chain becomes…..



Infrastructure

Regulation

A bigger fatter unconstrained supply chain – and a platform for economic growth

Importer SeaRoad / Rail Retailers ConsumersPort Terminals/

DCs

Regulation

Infrastructure

Documents

The Hurdles and Solutions to the Land Transport task in Australia 13.06.07