Hope on the horizon for Port Botany

Concrete details are finally beginning to emerge on the NSW Government’s program to reform Port Botany’s landside operations, with penalty-enforceable performance measures to be forced on stevedores.

 

Both Ports Minister Joe Tripodi and Sydney Ports CEO Grant Gilfillan have committed themselves to have the new measures in place and operational in time for the 2009 peak Christmas shipping season, beginning in August-September.
 
The reforms, hereon in to be referred to as the “Port Botany Landside Improvement Strategy” (PBLIS), will be instituted over a series of three trials between now and August. The first trial, over a two week period commencing February 16, will benchmark the port’s existing performance to support greater transparency of industry logistics chain performance.
 
Trial 1 will look at:
· Slot availability and utilisation – number available, number utilised.
· Vehicle processing time – from queuing to out gate.
· Container dwell times – impact on efficient terminal operations.
· Dual slot running – use of dual slots, export / import.
· Electronic processing – gauging benefits of full electronic processing.
· Industry communications – frequent and transparent communications.
 
The second trial will be centred on commercial pricing around performance measures only.
Taking place in mid-April (post Easter long weekend), it will also last for 14 days and will be used for the additional collection of data and refinement of processes (refining recording methods, templates and reports based on ‘lessons learnt’ from Trial 1). It will also be used to calculate commercial pricing implications around operational performance measures, and should lead to a determination of stevedore performance measures and penalties for non-performance.
 
Trial 3 will be focused on commercial pricing around peak pricing mechanisms. Taking place in mid-June for again a period of 14 days, it will see the additional collection of data and refinement of processes (based on lessons learnt from the two previous trials). Sydney Ports will review commercial pricing implications around peak pricing and test applicable people, process and technology changes.
 
The major trust of the reforms is twofold: one is to encourage off-peak container movements to and from the wharf by the way of charging for peak- and shoulder-period slots (provisionally determined to be 5 am to 1 pm and 1 pm to 7 pm on weekdays only, respectively), and thereby flattening out demand.
 
The reform’s intention is for the charge to be passed on to the beneficial owner of the cargo and thereby provide a commercial incentive to have warehouses etc. open at other than peak times, however, many transport operators express the view that it will be another tool that big companies will use to kill off smaller ones, by not passing the peak-hour surcharge on or by picking up containers at night and not passing the cost of staging on to customers.
 
The second thrust of the reforms is to drive performance improvements at the stevedoring interface, by encouraging dual slots (the truck that is dropping off an export container to pick up an import container at the same time), and forcing enforceable performance standards onto the stevedores, who until now had little incentive to look after landside operations when ships were waiting to be worked.
 
The proposed changes, charges and system of penalties has the potential to finally kick-start landside productivity at the wharf, a situation that has been allowed to develop through chronic indifference and continued underestimation of the growth of container volumes.
 
It may be too late to save some transport operators and it may not suit everybody to the ground, but if the government and SPC carry through the reforms as promised, Port Botany may at last become a reasonably efficient gateway.

NSW ports continue unabated growth

Newcastle Port.

Aerial view of Newcastle Port.

Cargo throughput volumes at NSW ports have showed strong growth in the 2007-08 fiscal year, Port Minister Joe Tripodi has announced.

Port Botany has recorded its seventh consecutive year of growth, with the rate of container movement increasing nearly 10 per cent to over 1.78 million TEU during the period.

“While trade in containerised goods is increasing, so is that of bulk liquids and gases. This trade increased by 18.1 per cent over last year,” Mr Tripodi said.

“The future of trade through Sydney’s ports is in containerised trade and bulk liquids, which is why we have started construction of a five-berth expansion of Port Botany and have approved plans for a new bulk liquids berth to cater for this growth.”

The $1 billion port expansion project underway is expected to double its capacity from 2010.

According to Mr Tripodi, Newcastle Port also showed robust performance in cargo throughput, with imports and exports passing through the port increasing by 7.7 million tonnes to 93 million tonnes, worth over $10 billion.

The increased result came despite the impact of chronic drought on the grain transport market, with coal continuing to be the port’s main export. 

“Rural drought conditions have significantly impacted on grain movements through Newcastle for the past few years, but this was offset slightly this year by import of fertiliser products,” he said.

Along with these two ports, Port Kembla recorded positive grains throughput.

Port Kembla will soon become the state’s vehicle importing hub after the relocation of car import facilities from Sydney’s Glebe Island.

Christmas at risk from port congestion

Road and rail transport operators have warned the Sydney Ports Corporation that many will go out of business and Christmas goods destined for Sydney stores will not get delivered in time, unless immediate productivity increases are made by the two stevedores.

The Sydney Port Corporation held an information session yesterday to update industry on the proposed landside productivity improvements. While the presentations gave a high-level overview of planned action to improve access and productivity in the medium to long term, there was no immediate relief for long-suffering transport operators.

Horror stories told by representatives of container cartage operators told of trucks taking up to five hours to pick up import containers, with the stevedores lacking information and relying on truck drivers to give them the missing details.

Others told of instances where the stevedores closed their gates at 2 pm sharp on Saturdays, notwithstanding trucks with valid slots still waiting outside. “We had booked the slots on the VBS as required,” one operator told T&Lnews. “their equipment breaks down or they have a staff shortage and are slow to load the containers, but they make us bear the cost of it – they go home and to hell with the trucks still waiting!”

Many operators expressed the concern that the reduced productivity is causing them to lose money and be forced out of business, and that containers arriving during the current Christmas rush will not be delivered to stores in time.

Some rail operators are equally affected. A company spokesperson who did not wish to be named, said his trains take, on average, 10 hours for the return trip from suburban Sydney to Botany. “The best we ever had was eight hours, but often it takes a whole day,” he said. “We have to change crews on the track because they run out of working hours.

“It takes 15 minutes to shunt in and another 15 to shunt out of the stevedores’ sidings. We only have a one-hour window, but they take the shunting time off that. They go to lunch early, and return late, but they take that off, too, from our time. When the time’s up, we have to leave – every single day we are forced to leave containers behind.”

He said the stevedores’ productivity is less than half of what they achieve every day in their own yard.

The Sydney Ports Corporation representative attempted to reassure operators that new KPIs and penalties will be incorporated into the stevedores’ leases, however, this will not have an effect for many months. The peak period surcharge mooted by ports minister Joe Tripodi will not be in place until at least the end of the current financial year.

Five shortlisted for the third terminal at Port Botany

Port Botany.

Five stevedoring groups have entered a bidding war over the third container terminal at Port Botany.

Sydney Ports Corporation has announced that five stevedoring companies have been invited to tender to operate the third container terminal at Port Botany.

The company’s CEO Grant Gilfillan said the invitation was the second part of a two-stage process for choosing the terminal operator for the Port Botany expansion project.

A total of 13 groups expressed interest in operating the terminal, responding to the call for expressions of interest due on September 1.

“The healthy response indicates there is strong industry confidence in the long-term commercial viability of Sydney’s container port,” Mr Gilfillan said.

The company asked the applicants to provide information concerning their financial and resource capacity, container terminal expertise and experience, as well as capacity to resource and manage the new terminal.

Ports Minister Joe Tripodi said bids would entail fixed and variable rental elements, and a level of investment and intended work volumes.

Mr Gilfillan said the shortlisted groups included domestic and international operators, without revealing their names.

“We regard the process as commercially confidential and will not be announcing the names of those who have been invited to tender.

“We expect the stevedore to be chosen by mid-2009, with the first berths available for trade from 2012,” he said.

It is speculated among the contenders were Patrick, DP World, Hong Kong-based Hutchison Port Holdings and the Singapore Ports Authority. Former Patrick chief Chris Corrigan was also reported to have expressed interest.

It is expected the selected operator will inject around $350 million into new facilities, with initial expenditure on gantries of about $150 million.

Third stevedore sought for Port Botany

port botany

International stevedores are expected to line up to win the rights to operate Port Botany’s third terminal.

The NSW Government has called for expressions of interest for port operators to take charge of the third terminal, which will start handling shipments from 2012.

As part of the Government’s $1 billion Port Botany exapnsion project, construction work on the third terminal will commence before the end of this year, with the successful bidder to be announced early next year.

Ports minister Joe Tripodi said: “This is an exciting development for the economy. It will deliver 9,000 new jobs to NSW and boost the state’s economy by $16 billion in the next 20 years.”

He said bids for the right to operate the terminal will entail a fixed and variable rental element as well as a level of investment and intended work volumes.

Among the potential bidders are the Hong Kong-based Hutchinson Ports, the Singapore Port Authority, and Anglo Ports. Local contenders are also expected, including former CEO of Patrick Corp Chris Corrigan. 

While the expression of interest process is open to all stevedores, the key factors are likely to include maintaining a level of competitive tension with the existing operators.

The two existing terminals at Port Botany are being operated by Asciano and the Dubai-based operator DP World.

It is expected the chosen operator will inject around $350 million for new facilities, with initial expenditure on gantries of about $150 million.

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