‘When competition gets too close, release a report’ seems to be the tactic adopted by the current leaseholders/operators of Port Botany and Port Kembla, following a run of successes by the Port of Newcastle with the ACCC and in the media.
The report, by KPMG, on the “long-term container needs of NSW has confirmed Port Botany is the State’s key container port, and a new container terminal will not be needed until the mid-2040s”, they say.
The report claims the NSW Government’s container port strategy, which would see Port Kembla developed as the next container port in NSW to augment capacity at Port Botany, still stands as the most efficient and effective way of meeting the State’s container export and import demands.
The KPMG report, titled Quay conclusions: Finding the best choices for additional port capacity in NSW finds:
Premature port investments will result in higher costs for NSW businesses and families;
Port Kembla makes the most sense for containers, but only once Botany nears capacity; and,
Containers at the Port of Newcastle makes the least sense for NSW and would impose the highest overall costs and offer the lowest overall benefit.
NSW Ports CEO, Marika Calfas, said Port Botany will remain the first choice in container freight. “Port Botany is closer, better and cheaper for most container freight in NSW.
“Port Botany is less than half full, is directly connected to dedicated freight rail, road and intermodal infrastructure and is supported by modern warehousing and logistics facilities in Sydney’s west and south west.
“The KPMG modelling shows Port Kembla is the obvious next choice for the state’s next container port, once Port Botany nears capacity.
“It is less than half the distance to Sydney’s booming west and south west and has better existing and planned freight infrastructure connections than a container terminal at Newcastle.
“It’s the population and business needs of NSW that determine the most efficient container terminal locations.
“NSW container ports are most efficient when close to consumers and connected to the market by good rail, road and intermodal infrastructure.
“Sydney and the south west population is set to grow from 5 million now to 6.5 million by 2036. Port Botany then Port Kembla makes sense as the ports to service this growth and is the right decision for the people and businesses of NSW,” Ms Calfas said.
The report found that 80 per cent of containers are consumed within 40 km of Port Botany, with massive Commonwealth, state and port investments made over the past 10 years to develop a major freight and logistics sector in Sydney’s west and south west growth areas.
According to KPMG’s research, the current proposal for a container port in Newcastle had significant issues including being furthest away from the freight consumption and employment growth in western Sydney and the most expensive to develop, connect and use for containers.
Even with massive taxpayer investments in rail and road projects, a container port at Newcastle would introduce thousands of heavy vehicles onto Newcastle’s streets, the F3 motorway and across Sydney, the report found. Or does it?
The report is also notable for what it doesn’t reveal, although it is hardly surprising considering NSW Ports paid over $5 billion to the NSW Government for the pleasure of operating the two ports.
A joint study by the state and federal governments into a rail freight bypass of Sydney was reported in February 2012 (page 37). A container terminal at the Port of Newcastle would provide the container cargo to pay for the new line.
Long-time Port of Newcastle proponent Greg Cameron said: “The [KPMG] report says it was commissioned in August 2018. The purpose of the report is to justify government policy that sees Port Botany as the state’s only port for container ships.
“Port of Newcastle Investments has been making the point that a container terminal will be built if the infamous fee is removed. There is plenty of demand from northern NSW to support a Newcastle container terminal.”
Mr Cameron further said: “ ‘Determining an estimate of public expenditure required to overcome rail constraints between Sydney and Newcastle is difficult, given that transport agencies have not released their estimates,’ KPMG says. Presumably, the studies are confidential because they relate to the commercial viability of building a rail freight bypass of Sydney.
“A container terminal at the Port of Newcastle would provide the base load cargo for privately building and operating a rail freight line to serve all of NSW, not just Sydney.
“Port Botany is the state’s only port with the dedicated facilities required by container ships. Every container ship that visits NSW must use Port Botany. At present, container transportation requires one million truck trips a year at Port Botany. By 2040, the estimated number of container truck trips will be 5 million a year.
“The reason why 85 per cent of containers are delivered within 50 km of Port Botany is because trucking is the highest cost method of transporting containers. The lowest cost method of container transportation is by rail.
“A rail freight bypass line would enable a container terminal established at the Port of Newcastle to operate interchangeably with a container terminal established at Port Kembla. Every container would be railed.
“Intermodal terminals would be established along the rail freight bypass line to maximise logistics efficiency.
“Intermodal terminals established in regional areas would enable very long term planning of the state’s future economic development based on rail transportation of containerised goods,” Mr Cameron said.
Container handling technology manufacturer Kalmar, part of Cargotec, will deliver 38 new machines to DP World Australia’s recently launched logistics arm, DP World Logistics Australia.
The order includes seven Kalmar reachstackers, and 11 loaded and 20 empty container handlers. So far, 22 units have successfully been delivered to DP World Logistics Australia’s Botany Intermodal terminal, with the remaining equipment to be delivered by September 2017.
The new machines add to DP World Australia’s existing fleet of Kalmar rubber-tyred gantry cranes (RTGs), straddle carriers and terminal tractors and will serve operations in Sydney, Melbourne, Fremantle and DP World Australia’s semi-automated terminal in Brisbane.
The Kalmar reachstackers will be equipped with Kalmar K-Motion transmission technology, which secures uptime and productivity while reducing fuel consumption and emissions. Four units will also include overheight legs. All the Kalmar machines will be powered by Volvo IV Final engines to meet emissions standards and will feature the Kalmar SmartFleet system for performance-boosting remote monitoring and reporting.
“Kalmar won a competitive tender to renew, and increase, our fleet of machines in all our facilities around Australia,” said Ron French, National Engineering Manager at DP World Australia. “Our existing relationship gave us leverage to secure the best outcome for DP World Australia, with respect to pricing, service and ongoing support. The K-Motion option was very attractive due to lower fuel consumption and environmental impact.”
Michael Wahab, Director Mobile Equipment at Kalmar, added, “We are happy to continue to serve DP World Logistics Australia with reliable and efficient equipment tailored to their needs. The units are also equipped with environmentally conscious technology, including innovative K-Motion technology to significantly lessen fuel usage and reduce emissions by up to 40 per cent.”
SCT Logistics will partner with DP World Australia on a joint capabilities initiative, focusing on improving freight services for operators moving goods from the Parkes region in New South Wales to the Port of Sydney, the Parkes Champion Post has reported.
Through the initiative, the two companies will together service regional trains providing exporters and importers direct access to the DP World Australia’s Sydney dock via the recently announced Botany Intermodal.
“Botany Intermodal will offer will offer fast and efficient container coordination, movement, cleaning, repairs, refurbishment and storage services to customers who are transiting container freight into and out of the terminals,” said Mark Hulme, Chief Operating Officer – Logistics, DP World Australia.
“Botany Intermodal’s connection to the Southern Sydney Freight Line will drive improved rail efficiency and speed of service to adjacent stevedoring operations.”
Geoff Smith, Managing Director of SCT Group added, “We currently move freight from Perth to Sydney via Parkes.
“We are well positioned to expand these services to include your export into Port Botany to meet vessel cut offs.
“Furthermore, we have 324 hectares in our regional intermodal estate that would be ideal for exporters or importers to situate themselves in the strategic Parkes rail hub.” Parkes Champion Post noted that the partnership is expected to result in reduced truck dependency in the region, along with environmental benefits.
Cr Ken Keith OAM, Mayor of Parkes Shire, welcomed the joint initiative by the companies.
“This partnership will further connect our region to a global market via one of the major ports of Australia, placing Parkes and the Central West into an economically advantageous position,” he said.
“We compete in global markets and as such transport efficiency is critical to our competiveness.”
The Australian Logistics Council (ALC) has welcomed a new publication from the Greater Sydney Commission, noting that it underscores just how important proper planning and the preservation of key freight corridors is to ensuring the efficient operation of Sydney’s freight transport network over the next four decades.
“[The] ALC welcomes Directions for a Greater Sydney, particularly its emphasis on sustained investment in freight corridors, such as the Northern Sydney Freight Corridor and the Moorebank Intermodal Terminal,” said Michael Kilgariff, Managing Director, ALC.
“As the Commission correctly notes, the construction of Western Sydney Airport will be the catalyst for significant additional economic expansion in Western Sydney in the years ahead. This facility will complement the freight activity that already occurs at Sydney Airport and Port Botany, and help a burgeoning city meet its future freight task.
“It’s pleasing to note the Commission has also highlighted the importance of the Port Botany rail line duplication – a project which [the] ALC has long argued is vital in ensuring the city’s freight network is able to keep pace with growing demand,” Kilgariff added.
“[The] ALC strongly supports the WestConnex project and its potential to improve traffic flows and alleviate congestion for freight logistics operators using the Sydney road network.
“There is no doubt the Sydney Gateway has improved the project, and ALC looks forward to clarification as to how it will connect with Port Botany and Sydney Airport, given the critical role these two facilities play in the city’s freight network.
“The recurring theme that emerges in Directions for a Greater Sydney is that all stakeholders accept the need for strategically planned investments that will provide certainly and clarity for investors and local communities alike.”
The Freight & Trade Alliance (FTA) has reported that it continues to receive enquiries from its members about storage and ‘dehire’ (return) detention fees for import sea freight consignments targeted for Container Examination Facility (CEF) processing.
As a part of their joint submission to the Federal Government’s Inquiry into Freight & Supply Chain Priorities, the FTA and the Australian Peak Shippers Association (APSA) has recommended that CEF-targeted containers have storage arrangements prescribed in Melbourne, Brisbane and Fremantle ports, to meet the benchmark established in Sydney under the Port Botany Landside Improvement Strategy (PBLIS) Mandatory Standards. Specifically, PBLIS clause 17, which mandates that stevedores must provide free storage for the day the container is returned from the CEF, and the two following days.
While the Australian Border Forced and the PBLIS have introduced a level of relief against stevedores fees for CEF-targeted containers, the FTA noted, to date there are no similar arrangements in place with shipping lines. Whether or not reporting has been completed within prescribed timelines, shipping lines commonly charge a fee if containers are not dehired to an empty container park within agreed terms.
The FTA and the APSA have brought this matter to the attention of the Inquiry, seeking a fairer and more reasonable operational outcome allowing extended free container dehire periods.
A fact sheet has been prepared which outlines the current statutory and operational procedures for dealing with CEF targeted containers.
Supply chain management company CEVA Logistics has signed a four-year lease at the Calibre industrial development – owned by property group Mirvac – at Eastern Creek, New South Wales.
Construction of the building CEVA will occupy has yet to complete, though it will consist of approximately 18,000sqm of warehouse and 1,000 metres of office space, allowing CEVA to consolidate three existing warehouse operations from different locations into one.
“As a world leading supply chain management company, CEVA will benefit from Calibre’s unmatched transport links. At the nexus of the M4 and M7 motorways, the site has a dedicated multi-directional signalised intersection connecting to major transport links,” said Stuart Penklis, Mirvac’s Group Executive, Industrial.
“The advanced specification of the facility sets a new standard of quality and amenity for industrial estates in Australia, whilst delivering long-term efficiency and flexibility for CEVA,” he added.
Penklis said that the state government investment in infrastructure is drawing large-scale users to Western Sydney.
“The upgrade of the M5 Motorway and WestConnex has stimulated demand as it will improve access and connections between Western Sydney, Port Botany and Sydney CBD. Calibre is ideally placed adjacent to the motorway, catering for logistics and manufacturing occupiers looking to benefit from this investment in infrastructure.” Carlos Velez Rodriguez, Managing Director Australia and New Zealand, CEVA, said, “We’re very pleased to have secured the first facility at this new premium logistics hub. Calibre raises the bar for contemporary industrial estates, and the quality and design make it an exceptional opportunity to have secured.
“This transaction allows us to consolidate from different locations across the state, creating a huge value proposition and bottom line efficiencies. Against the back drop of high demand for industrial sites in Sydney’s west, Calibre’s prime location makes it an unmatched opportunity.”