VTA relocates to Webb Dock

The Victorian Transport Association (VTA) has announced it is moving from its premises in Fishermans Bend in Port Melbourne to a modern new office space two kilometres away, at Webb Dock.
From Monday, 26 June, the VTA and the Victorian Waste Management Association will be located at Mirrat House, Webb Dock.
“After almost 20 years at Fishermans Bend, the opportunity arose to relocate to new premises with modern features and amenity that is much better-suited to our staff and membership,” said Peter Anderson, CEO, VTA.
“The new office features training rooms and facilities that are better equipped for the types of programs we are offering, and cater to various sizes and configurations in line with the growing number of participants we are experiencing.
“We can also better support members that may require use of some of our facilities, with plans to make offices, meeting and training rooms available to members by arrangement.”
“We look forward to welcoming members and other visitors to our new home next week,” Anderson added.

VTA urges operators to pass on Patrick fees increases

The Victorian Transport Association (VTA) has advised members to pass on in full increases to infrastructure surcharges announced on 9 June by stevedore Patrick.
Patrick will introduce a new surcharge at its Sydney and Fremantle terminals, $25.45 per box and $4.76 per box, respectively.
The surcharge at its Fisherman Islands and East Swanson Dock terminals will increase by $32.55 per box and $32 per box, respectively. It will also increase its ancillary charges due to increased labour and energy costs.  The new rates will take effect on 19 July.
Peter Anderson, CEO, VTA, said operators had no choice but to pass on the higher surcharge.
“At a time when operators are facing unprecedented increases to infrastructure and road user charges in and around the Port of Melbourne, it is important to ensure the increases are passed on through the supply chain for freight businesses to remain sustainable and viable in a competitive trading environment,” he said.
“Customers need to understand that the costs of doing business for transport operators are increasing rapidly, and that transactional costs such as this surcharge ultimately must be worn by consumers of goods and services.”
Anderson commended Patrick for extending one-stop trading terms from seven to 30 days, which will help operators transition and adjust for the changes to the surcharge.
 

VTA celebrates project progress and industry resilience

Victorian Transport Association (VTA) CEO Peter Anderson has highlighted the major productivity challenges facing Australian freight and logistics operator in opening remarks to the VTA’s annual State Conference at Lorne.
Anderson said in a big-picture sense, it is a challenging time for all freight operators.
“Freight movements are generally down thanks to a stagnant economy, and operator margins that are already stretched thin are being further squeezed by higher input and variable costs. We are also operating in an increasing regulatory environment and having to adapt our businesses to satisfy and comply with additional regulatory oversight.”
Anderson explained operators are also facing higher road and infrastructure user charges, which eat into profits and erode margins.
“These factors highlight the need for operators to extract greater productivity from their systems, their equipment, their people, their customers and their suppliers to remain viable and successful.”
Anderon noted that there are a lot of exciting things happening in the industry across technology and innovation, safety and training and human resources, and infrastructure.
“We now have a North East Link Authority established and are actively putting together the business case and corridor study for the connection, which will finally link the M80 to EastLink or the Eastern Freeway,” he said.
“This has long been the VTA’s priority road infrastructure project and we are playing an active role in the consultation and planning for the connection, which the current Victorian Government has committed to take to the next election.
Anderson also reflected on the considerable progress made on the West Gate Tunnel project. The Victorian Government last week released additional plans and environmental modelling for the project, which will provide better access to the Port of Melbourne for heavy vehicles.
“While we support the project, we are unimpressed with plans to permanently curfew trucks from existing roads and force them to use a toll road. We’re working closely with the treasurer and the roads minister on incentives for trucks to use the new freeway, such as toll rebates and reduced tolls at nights, as well as exempting modern and efficient vehicles from the proposed curfews.”
Anderson explained that the Association is encouraging infrastructure planning and investments in the Port of Melbourne to ensure it remains Australia’s biggest.
“There are many issues working against freight volumes increasing within the Port of Melbourne, so it’s important we plan now for short- and long-term infrastructure needs at the Port to keep it competitive,” he said.
“This includes improving rail access via Port Rail Shuttles, proper road and rail infrastructure planning for freight movements in and out of the new Webb Dock Terminal, and upgrading infrastructure to accommodate high productivity freight vehicles.”

VTA stresses need for Port of Melbourne access strategy

A Victorian Government submission by new Port of Melbourne owner the Lonsdale Consortium has exposed flaws in planning for future growth and the Port’s capacity to handle an anticipated increase in the volume of freight expected to be moved in and out of the Port of Melbourne, according to the Victorian Transport Association (VTA).
The VTA has warned that if road and rail access issues are not suitably addressed, the Port of Melbourne will lose business to ports in other states, impacting the Victorian economy and threatening jobs.
“The VTA has long held the view that road and rail access to the Port has been neglected, and this submission confirms that if meaningful and significant changes aren’t made now that caters to future freight movement increases via road and rail, Victoria will lose business to other states,” said VTA CEO Peter Anderson.
“We need all of the infrastructure flagged in the submission, such as rail access to the new Webb Dock terminal, strengthening of bridges for longer and more efficient High Productivity Freight Vehicles, a freeway between CityLink and the Western Ring Road, and even East-West Link.
“And while we may not be able to afford it now, we at least need a sensible, long-term blueprint that prioritises future construction so that we aren’t wasting money on piecemeal solutions that are based on election cycles instead of the genuine needs of the economy,” he said.
Anderson said recommendations in the submission for the government to encourage more truck movements at night made complete sense.
“The best way to free up traffic during the day for commuters is to create policy settings and incentives for road and rail operators to access the 24-hour Port of Melbourne at night,” he said.
“This would also create amenity improvements for residents and efficiencies for operators, leading to productivity improvements for operators. Instead of banning trucks from port access roads and increasing tolls disproportionally, why not reduce tolls for trucks at night and actually encourage them to use the road? This is the sort of creative thinking that has been lacking to date, and we welcome discussion the submission will inevitably create that will lead to greater productivity and efficiency at the Port of Melbourne,” he said.
 

New $440 million logistics hub opens in VIC

On Tuesday 11 April Wade Noonan, Minister for Industry and Employment, officially opened Drystone Estate – a 95-hectare industrial precinct that supports the likes of Target, Woolworths, The Reject Shop, Laverton Cold Storage, Rand Transport and Couriers Please.
The site is located 20km from Melbourne’s CBD, and sits close to the Western Ring Road, the West Gate Freeway and the Princes Highway.
The Victorian supply chain and logistics sector is worth $21 billion to the state’s economy each year – or seven per cent of the state’s Gross State Product – and employs 260,000 people state wide. The industrial estate is expected to create jobs for 1,200 people.
“Melbourne is the city of choice for major logistics and supply chain companies to do business,” said Noonan.
“This massive precinct will accommodate some of the biggest names in retail, and create more than a thousand jobs – which is great news for the city’s west.”

M&A activity buoyed by ‘megadeals’

Global consultancy PwC has released the newest edition of its quarterly analysis of mergers and acquisitions (M&A) in the global transportation and logistics (T&L) sector.
The analysis covers all T&L transactions worth US$50 million or more, across passenger air, passenger ground, shipping, logistics, trucking and rail industries.
Global transportation and logistics M&A activity remained stable in 2016, though Q3 2016 was slightly less active. With over 50 deals, the quarter saw a decline of 11 per cent in deal volume compared to both Q2 2016 and Q3 2015.
Despite a gradual decline in volume, M&A activity remains strong with respect to volume and value. There were five transactions over US$1 billion ($1.4 billion), known as ‘megadeals’ in Q3 2016, with the takeover of the Port of Melbourne (PoM) Corp in Australia the largest at $9.7 billion.
According to the report, five megadeals held around a 54 per cent share of the total disclosed deal value in Q3 2016.
Shipping was stable in deal volume in Q3 2016 but saw a surge in deal value driven by the PoM lease. Rail recorded growth from Q2 2016, although from a low basis, and the logistics sector saw a 20% increase in deal volume compared to Q3 2015. In addition, deal value in the sector grew over the past year by more than three times to US$4.6 billion ($6.6 billion).
PwC suggested that general uncertainties related to the US presidential elections, the long-term impact of Brexit, and China’s economic growth paired with reduced forecasts of international trade activity may have impacted recent M&A activity.
While the report states the Asia & Oceania region continues to lead in M&A activity, South America and Europe (excluding the UK and the Eurozone) saw an uptick in deal volume and a sizeable increase in deal value.
“We believe that underlying fundamentals in the industry – a drive to globalisation, corporate outsourcing of the logistics function, the continued global growth in e-commerce and the fragmented nature of some of the key subsectors—will continue to drive growth and associated M&A activity,” the report stated.
“Further, we expect Asia to continue to be a strong contributor to this M&A activity, as consolidation of the sector continues in many countries in the region and companies continue to seek access to the capital markets that help them capture these opportunities.”

ALC says port sale must be backed up by infrastructure investment

The long-term lease of the Port of Melbourne for $9.7 billion must be accompanied by significant investment in road and rail infrastructure linking the port to the wider transport network to maximise its economic contribution to Victoria and the nation, says the Australian Logistics Council (ALC).
“Now that an agreement has been reached on the long term lease of the Port, ALC encourages the State and Commonwealth Governments to prioritise infrastructure investment to the port to ensure it can meet its economic potential,” said Michael Kilgariff, ALC Managing Director.
“This includes an appropriate investment of the $58 million set aside for the port rail shuttle, which has been on hold while the Port lease transaction was being finalised.
“An appropriately regulated port, supported by efficient road and rail links, is vital to sustaining the Victorian economy and driving productivity improvements across the supply chain.
“Today’s confirmation that the Port has been leased for 50 years to a consortium comprising of the Future Fund, QIC, GIP and OMERS provides certainty to the logistics industry and unlocks significant funds for reinvestment.
“ALC looks forward to the Government prioritising logistics infrastructure investment from the proceeds of the sale, and from the 15% dividend to be provided to the state under the Federal Government’s Asset Recycling Scheme.
“Infrastructure Australia has predicted the volume of containerised trade going through our ports and airports will increase by 165% from 2011 to 2031.
“This significant growth underscores the need for all governments, including Victoria, to invest in appropriate national infrastructure to ensure our landside infrastructure can keep pace with waterside growth.
“This investment must incorporate all modes of transport, including short haul rail, which needs to play a greater role into the future as our ports continue to move greater number of containers each year.
“With the Victorian Government securing a record $9.7 billion windfall from the Port of Melbourne lease, now is the time to get Victoria’s supply chains right by investing in the state’s logistics infrastructure to maximise the port’s future potential,” he concluded.

Port of Melbourne sold for $9.7 billion

The Port of Melbourne has been sold to a consortium including Queensland Infrastructure Corporation, Global Infrastructure Partners and Canada’s Borealis for $9.7 billion, a price the Victorian treasurer Tim Pallas called a “pleasant surprise”.
The ABC reports that state legislation enabling the 50-year lease to the Lonsdale consortium passed parliament in March. A price of $6 billion was initially predicted.
According to AAP, Treasurer Tim Pallas said “”I think we’ve been very lucky in terms of timing … couldn’t have picked a better time to go to the market.”
Premier Daniel Andrews called it a vote of confidence in the state’s economy, and said over $970 million of the sale would be spent on rural and regional projects.
Final bids were due in last Friday, with Lonsdale beating a rival consortium including IFM and Macquarie Infrastructure and Real Assets, notes The Australian.

Melbourne Port increases rent 750 per cent

One of the world’s biggest stevedoring companies has been hit
with a massive rent increase which will make the Port of Melbourne the most
expensive port in the world.

DP World managing director Paul Scurrah said the rent
increase was around 750 per cent.

“I thought there was a decimal point missing when I saw
the rent increase for the first time, and there needs to be common sense
prevailing around any increase in rental,” he said.

“We have had rental increases before and there is
provision in the contract to negotiate rental fees every two years, but an
increase of this size will cause job losses and may see shipping companies
avoid using the Port.

The rental increases at the Port of Melbourne have caused
concerns to be raised by The Australian Logistics Council (ALC), the peak
industry body for freight logistics industry.

Managing director Michael Kilgariff said ALC was generally
supportive of the Port’s long term lease as a way of unlocking much needed
funds for logistics infrastructure in Victoria, but that rental increases would
undermine supply chain efficiency by affecting the ability of industry to make
long-term commercial decisions about their operations at the port.

“Any proposed rental increase, particularly of this
magnitude must be visible and transparent, and we are concerned that proposed
new rents at the Port of Melbourne appear to be linked to rents allegedly paid
by new entrants to the stevedore market,” he said.

“The reported price paid by Melbourne’s third stevedore to
secure port space should not directly impact on the price asked of legacy stevedores
to operate at the port.

“This issue has been raised repeatedly by senior members of
the logistics industry.

“This matter highlights the need for the
logistics industry to be engaged in all consultations with government on the
future lease of the Port of Melbourne, including arrangements for pricing,
lease structure and proposed regulatory frameworks.

“Too often in the past when these processes have commenced,
the logistics industry has been locked out of discussions on the grounds of
‘probity’.

“The Victorian
Government has committed to involving the logistics industry in this process
and this matter reinforces how important it is for that to occur.”

Kilgariff said the focus needs to be on the efficiency of
the entire supply chain for Melbourne to maintain its claim of being
Australia’s freight and logistics capital.

“As ALC said in its submission to the Senate Inquiry into
asset recycling, the need for a published business case in relation to proposed
infrastructure projects is paramount to building community support for them,”
he said.

Kilgariff said the issue would feature at the upcoming ALC
Forum 2015 on March 11, when senior logistics executives will discuss
regulatory and investment issues relating to the port, rail and intermodal
sectors of the industry.   

Port of Melbourne profit increase despite decrease in volume

Port of Melbourne Corporation recorded an overall profit $65.9 million for 2012-13 despite a small drop in trade of 1.6 per cent on the previous year.

Port of Melbourne Corporation’s (PoMC’s) 2012-13 Annual Report, tabled in the Victorian Parliament this week, showed that while container volumes declined slightly from last year’s record peaks, new motor vehicles, dry bulk and liquid trades all recorded growth.

The port handled a total of 2.51 million TEUs in the year to June 30, 2013, signalling a decrease of 2.6 per cent.

Container import volumes also fell due to soft retail conditions, however full overseas export containers recorded a modest increase of 0.6 per cent.

The Port of Melbourne handled over 370,000 new motor vehicles in 2012-13, up 3.6 per cent on the previous year.

Victoria’s Minister for Ports David Hodgett told parliament the port was in a strong position.

“PoMC has backed up a strong financial position and trade result with capital expenditure totalling $56.8 million including work on the Port Capacity Project, extensive wharf rehabilitation at Appleton Dock, together with a major redevelopment of the Port Operations Control Centre,” he said.

Trade summary:

  • Total trade of 85.6 million revenue tonnes (down 1.6 per cent).
  • Total container throughput of 2.51 million TEU (down 2.6 per cent).
  • 370,527 new motor vehicles handled (up 3.6 per cent).
  • Total dry bulk trade of 4.4 million revenue tonnes (up 4.4 per cent).
  • Total liquid bulk trade of 6.5 million revenue tonnes (up 2.6 per cent).

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