The Hurdles and Solutions to the Land Transport task in Australia 13'06'07

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The Hurdles and Solutions to the Land Transport
task in Australia13.06.07
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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

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The Australian Supply Chain
Regulation / Policy
Manufacturer
Terminals / Warehouses / DCs
Road / Rail Distribution
Retailers
Consumers
Importer
Sea
Port
Infrastructure
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Key Players in Australian Supply Chain
Australian Government State Governments Port
Authorities
Regulation / Policy
Terminal Operators
Road / Rail
Retailers
Terminals
Importer
Sea
Consumers
Port
Road operators Rail operators Freight Forwarders
Stevedores Landside Port Logistics Services
Infrastructure
Track Owners (Government and Private) Port
Authorities Road owners (Government and Private)
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Inefficiencies in the Supply Chain

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

Regulation / Policy
Road / Rail
Terminals/ DCs
Retailers
Importer
Sea
Consumers
Port

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

Infrastructure

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

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Why do we need to fix this?
The task is growing.
(btk)

• Total Domestic Freight Task Australian land
  freight task has been estimated to double between
  20002020

International Trade
Containerised cargo in Australian ports is
forecast to grow 6.5 p.a. indefinitely
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Why do we need to fix this?
Demand is changing

• Increased choice
• Lower prices

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

Road / Rail
Terminals / DCs
Retailers
Importer
Sea
Consumers
Port

• Quicker supply chains
• Increase in time sensitivity reliability
• Lower unit costs

• Bigger ships
• Compressed sailing schedules

Environmental sustainability is expected
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What can we do to fix it? individual components

• 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

• Continued investment in existing and new
  terminals
• Improve rail terminal productivity through
  design and operating procedures
• Construction of more efficient, better located DCs

Road / Rail
Terminals/ DCs
Importer
Sea
Retailers
Consumers
Port

• Continued investment in rolling stock
• Broaden range of services
• Improve reliability of services
• Encourage freight on rail to achieve
  environmental and social benefits

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Rail Mounted Gantry
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Port Botany - RMGs
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Post Panamax Cranes arriving at Port Botany
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AutoStrads
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Fishermans Island
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What can we do to fix it? individual components

• Continued investment to increase quay line
  efficiency
• Optimisation of port productivity through
  technology and people
• Minimise Govt. intervention to allow market
  forces to drive efficiency

• Continued investment in existing and new
  terminals
• Improve rail terminal productivity through
  design and operating procedures
• Construction of more efficient, better located DCs

Road / Rail
Terminals/ DCs
Importer
Sea
Retailers
Consumers
Port

• Continued investment in rolling stock
• Broaden range of services
• Improve reliability of services
• Encourage freight on rail to achieve
  environmental and social benefits

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New NHWH coal wagons
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What can we do to fix it? individual components

• 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

• Continued investment in existing and new
  terminals
• Improve rail terminal productivity through
  design and operating procedures
• Construction of more efficient, better located DCs

Road / Rail
Terminals/ DCs
Importer
Sea
Retailers
Consumers
Port

• Continued investment in rolling stock
• Broaden range of services
• Improve reliability of services
• Encourage freight on rail to achieve
  environmental and social benefits

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Kewdale Precinct
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What can we do to fix it? interdependencies

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

Road / Rail
Terminals/ DCs
Importer
Sea
Consumers
Port
Retailers

• 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)

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What can we do to fix it? Governments role
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

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What can we do to fix it? Governments 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
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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

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Conclusion Our skinny constrained supply chain
becomes..
Regulation
Road / Rail
Terminals/ DCs
Retailers
Importer
Sea
Consumers
Port
Infrastructure
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A bigger fatter unconstrained supply chain and
a platform for economic growth
Regulation
Road / Rail
Retailers
Terminals/ DCs
Importer
Sea
Consumers
Port
Infrastructure