Trade grows through Sydney ports

The global financial crisis has yet to have an impact on trade through Sydney ports, with 7.3 million mass tonnes of total trade moving through the trade for the first quarter of 2008/09, an increase of 0.7 per cent compared to the same period last year.
 
Total container throughput for year to date (YTD) September 2008/09 was 0.49 million TEU – up 13.2 per cent on the same period last year.
 
September 2008 container trade reached another record high of more than 165,000 TEU, which was 12.8 per cent higher compared to September 2007. This performance was driven by higher container movements through New Zealand, the US and China.
 
Total full container imports for YTD September 2008/09 reached 247,300 TEU – up 11.3 per cent on the corresponding period last year. The leading import regions were dominated by East Asia (45 per cent), Europe (16 per cent) and South East Asia (15 per cent), which combined account for 76 per cent of total full container imports through the ports of Sydney.
 
Total full exports also increased by 20.5 per cent, recording 109,700 TEU. The higher exports of timber, machinery and transport equipment, cereals and chemical products have been the primary drivers of this growth.
 
The leading containerised exports in TEU through the ports of Sydney for YTD September 2008/09 were chemical products, machinery and transport equipment and paper products. These increases were partially offset by the decline in agricultural products such as cotton (59.0 per cent) compared to previous YTD. The change was primarily a result of the drought.
 
Empty container exports increased by 10.8 per cent to 127,800 TEU compared to the same period last year. Non-containerised imports for YTD September 2008/09 decreased by 8.5 per cent to 3.3 million mass tonnes as a result of a decrease in crude oil imports.

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.

Enfield Intermodal Logistics Centre progress report

The Intermodal Logistics Centre (ILC) at Enfield is a key freight transport link that internalises the movement of over 60,000 Twenty Foot Equivalent Units (TEU) per annum. It will be part of a network of existing and planned intermodal terminal facilities in Sydney and will service around a quarter of the total intermodal demand.
 
The development involves a 60 hectare Intermodal Logistics Centre comprising intermodal terminal, empty container, warehouse and Industrial/commercial facilities. Milestones achieved as at the end of September 2009 include:
 
Design
  • Sydney Ports is progressing final authority approvals following completion of the 100% design documentation for the ILC base infrastructure and off site works.
  • On this basis, the project’s design consultant Maunsell Aecom is preparing tender documents for the main construction contract.
Construction
  • The Wheel Lathe rail corridor works were completed on 25 August 2009.
  • The demolition of all existing site infrastructure is nearing completion. The south sidings rail lines will soon be removed now that the north sidings rail corridor has been constructed and commissioned to provide access to the wheel lathe facility.
  • Following approval of the Remediation Action Plan in July 2009, the majority of the remediation works are expected to be completed by late 2009.
  • The remaining site preparation works will be carried out during the remainder of 2009 and in early 2010. These works include various electrical works and the relocation of heritage structures to an area in the south of the site.
Tenant/operator procurement
  • The Request for Proposals for ILC tenants/operators closed on 2 April 2009.
  • A number of proponents have submitted responses to the RFP and the final evaluation of proposals is on target for completion by the end of 2009.
Communications and stakeholder management
  • The second meeting of the Community Liaison Committee was held on site on 26 August 2009.
  • In the last three months, Sydney Ports has also provided site tours for key stakeholders including local and state government officials as well as rail operators and authorities.
Road Transport Coordination Group
  • Sydney Ports established the Road Transport Coordination Group (RTCG) for the project in May 2008. The RTCG includes representatives of Sydney Ports, the Department of Planning, the RTA, Strathfield Council and Bankstown City Council. The RTCG oversees and coordinates the management of traffic and road issues associated with and affected by the project. RTCG meeting minutes can be viewed on the ILC website.
  • The next meeting of the RTCG is planned once the outstanding design matters for the Norfolk Road/Roberts Road intersection have been addressed to the satisfaction of the Roads and Traffic Authority.
ILC Delivery Program
  • In late July Sydney Ports invited Registrations of Interest (ROI) for the construction of base infrastructure and off-site works (Civil and Rail). The ROI has now closed, with the shortlisted proponents expected to be invited to tender in October 2009.
  • Main construction works are expected to commence in 2010.
  • The project is tracking well in accordance with the approved program.

Stevedores warned of duopoly

The Port of Melbourne.

The Port of Melbourne…warned.

The Australian Competition and Consumer Commission (ACCC) has warned a lack of competition in the stevedoring sector would get in the way of future growth.

According to the ACCC’s latest annual monitoring report of container stevedoring, throughput volumes recorded an increase of 10.7 per cent in 2007-08, with productivity levels jumping almost 47 per cent over the last decade.

ACCC chairman Graeme Samuel said the report showed decade-old waterfront reforms have significantly boosted the stevedoring sector, but a lack of competition in the industry was worrying. 

“During this time, demand for stevedoring services has doubled. The cost of using stevedoring services has fallen in real terms.

“In turn, the stevedoring businesses have become more productive and profitable, even during a period when significant expenditure on assets was made,” Mr Samuel said.

“However, as the ACCC has noted in previous reports, questions remain about the extent to which the stevedores actually compete to win each other’s business. This is important when we look forward ten years and consider the high rates of demand that are forecast to continue.”

Mr Samuel said while the ports of Sydney and Brisbane were well progressed in testing the market for new competitors, the Port of Melbourne was lagging behind with a third container terminal not set to open until 2017.

He said the delayed development at Australia’s largest port would make its two incumbents, Patrick and DP World, settle for the convenience of the current duopoly.

“Any unnecessary delays in establishing additional container terminal facilities could result in lost opportunities for greater competition.

“More intense levels of competition can not only improve efficiency but may also result in a greater share of the benefits being passed on to users and the wider community that reply on the movement of goods into and out of Australian ports,” he said.

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