Months of speculation over the fate for shipping company Hanjin Shipping came to an end on Friday when a South Korean court declared it bankrupt.
Hanjin’s fall from grace from one of the world’s top 10 shipping companies to today has shocked the global cargo movement industry in its speed and finality.
Hanjin’s troubles first emerged in August 2016, when it was revealed that the company had debts of US$5.4 billion ($7 billion) and creditors would not give any more money.
Hanjin – then South Korea’s biggest shipper and number seven in the world – went into receivership and applied for court protection.
At that stage all was not yet lost, with the help of an investor or the South Korean Government, Hanjin could have soldiered on, though no such aid was forthcoming.
The company’s ships were then stranded at sea as ports refused them entry, due to a fear of not getting paid for loading and unloading the cargo.
Over the following months, many of the company’s better assets got sold to other global shipping companies.
The bankrupy court will now handle the liquidation process, selling off Hanjin’s remaining assets and handing the money to the creditors.
Danielle Green, the Parliamentary Secretary for Regional Victoria, has launched the Portland Industrial Land Strategy, with a $150,000 contribution from the Victorian Government.
The strategy has identified land for future industrial development in the Portland region to 2050, and follows years of industrial zoning issues in Portland, with substantial amounts of industrially zoned land unable to be used because of proximity to sensitive areas, such as housing and schools.
The strategy has now defined and analysed appropriate sites for industrial use and has produced an investment prospectus for the zones identified as ready for development. Recommendations have also been given on action to deal with inappropriately zoned industrial areas.
A statement issued by Green asserts that the Industrial Land Strategy presents opportunity for new businesses to establish themselves in Portland, particularly those servicing the Port along the supply chain, including freight, timber, mineral sands and truck maintenance.
“The Port is critical to the local economy, and many businesses supporting the Port will be able to establish or expand now that the zoning issues have been addressed,” the release stated.
“There is now a way forward to attract new manufacturers and service industries to Portland which will accelerate the growth and employment opportunities of the city,” added Green.
Financial services company Deutsche Asset Management (Deutsche AM) purchased two logistics facilities located in Melbourne and Brisbane from Australian real estate investment trust PropertyLink on Monday 14 February.
The US$56.07 million ($73 million) transaction was conducted off-market on behalf of a German institutional client.
The facilities located in Derrimut, Melbourne, and Parkinson, Brisbane, offer a total of 64,000sqm over two single-story warehouses with offices and parking.
The purchase follows Deutsche AM’s acquisition of a grade-A logistics warehouse in Tokyo in December.
The cold-storage facilities in Melbourne and Brisbane were originally designed for refrigerated interstate transport and warehousing company Rand Transport, and were purpose-built in 2010 to connect to the local port, airport, railway stations and major transport routes in both Melbourne and Brisbane.
“We are pleased to add Rand Transport’s facilities to our portfolio,” said Victoria Sharpe, Head of Real Estate – Asia Pacific, Deutsche Asset Management. “With good quality, cold storage accommodation in prime Australian locations in small supply, over the long term we expect the assets to deliver stable cash flows with low volatility in line with the strategy for our investors.”
Volatile yet potentially very profitable, the logistics industry is full of opportunities to seize, and threats to overcome. Here are some of the current trends to consider and the challenges that port operators face in their quest to become more efficient. The lay of the land Consolidation via mergers and acquisitions appears to be the new normal, at least within the shipping line sector as the industry reacts and adjusts to overcapacity and a drop in trade. However, it will not be too long before we witness similar trends in the port sector who are struggling to remain efficient. New modalities such as rail and road and trade routes are emerging and currently being explored for long-haul cross-continental trading.
Rapidly developing economies in the Asian region, together with the prospect of free trade agreements in key markets, are driving strong growth in the global container shipping industry. As a result, port operators of all sizes are on the hunt for ways to improve efficiencies and lower costs.
The much-publicised increase of larger vessels has changed the economies of scale for shipping operators and offers new alternatives for manufacturers keen to boost their distribution capacity.
Such increases in capacity also bring challenges for port operators. For the largest ports, loading and unloading must be completed as quickly and effectively as possible. Even relatively minor delays in turning such large ships around can have significant knock-on effects further along the supply chain.
There are flow-on effects for smaller ports too. Vessels that have been displaced from the largest facilities by the new mega ships are then redirected onto routes that they traditionally have not served. This means smaller ports now have to deal with much larger ships than was previously the case. In turn, this puts pressure on everything from loading equipment to control systems. The challenge for operators To meet these challenges, smaller port operators must also find ways to make their facilities more efficient. Traditional methods must be examined and new approaches introduced. Any failure to take these steps will inevitably result in rising operational costs and an inability to compete with more nimble competitors.
There are a range of areas in which port operators can find efficiencies, including: Ship movement planning: Effective scheduling of vessels can ensure the port maintains a constant level of operation, rather than oscillating from quiet periods to times of frenetic activity.
Such planning will also aid the shipping companies themselves as they will be able to forward plan arrivals and departures much more accurately. The last thing a firm wants is for its freight vessels to have to anchor nearby and wait for a berth to become available. Labour management: Some industry estimates put the cost of labour at between 40 and 60 per cent of total port operational expenses. This means careful attention must be given at all times to how it is deployed.
Operators cannot afford to have staff rostered on when there are no ships in dock, but at the same time must ensure they are available as soon as loads need to be handled.
They also need the ability to change rosters quickly if ship movements are altered. Adverse weather conditions and delays at other ports can mean ships arrive much earlier or later than planned. Port operators need to have the mechanisms in place to alert staff and ensure they are available when required. Warehouse management: Many port operators have traditionally relied on paper-based systems or spreadsheets to track the movement of goods into and out of their facilities. While this may have worked in the past, as volumes increase they cannot be scaled to match demands.
Instead operators need to deploy electronic cargo management tools designed specifically for the shipping and logistics sector. These tools can readily handle everything from whole container movements to break-bulk shipments.
Accessed either via traditional PCs or the growing range of wireless mobile devices, the tools can significantly streamline the flow of goods through the facility. Ship turnaround times can be reduced and bottom-line profits increased. Reporting: Having a real-time view of what is happening within every port is critical. Vessel arrivals and departures, staffing rosters and freight movements all need to be constantly monitored to ensure that any issues can be solved before they have a significant impact on operations.
Real-time reporting tools need to be linked to systems throughout the facility, ensuring they can access data and provide port operators with a clear view of exactly what is going on at all times. Invoicing: At the end of the day, port operators of all sizes need to generate profits. Having an efficient invoicing and client management system in place is therefore critical to ensure revenue is received as swiftly as possible.
Invoicing needs to be tightly integrated with the cargo management tools to ensure all billable activities and resources are captured and prevent revenue leakage.
An effective invoicing and financial system will also remove many of the manual processes that may exist, freeing up staff to focus on more value-adding business activities.
By focusing on these key areas, large port operators will be able to meet the demands created by new massive ships while their smaller counterparts will also be well placed to deal with the changes this means for them.
Overall, shifting from manual, paper-based workflows to digital tools will drive efficiency and boost customer service levels.
Information and communications technology (ICT) solution providers face unprecedented challenges and opportunities in the maritime logistics space and these are not just simply about ‘automation’ or even ‘digitisation’ – the latest buzz.
The growing democratisation in ICT calls for a rapid paradigm shift in the way ICT is produced, delivered and consumed in our industry.
In the near future, innovations will be largely driven on the basis of a shared economy. It will be a more distributed, trusted, shared and hence more innovative environment”. Written by Kaustubh Dalvi, President Global Sales at Jade Software.
Australia’s first live sea-bound shipment left Portland, Victoria, for China on Saturday, 4 February.
A consignment of 1,200 cattle is headed for Shidao in the northern Shandong Province, under the new health protocol agreement for feeder and slaughter cattle signed between Australia and China and the regulatory conditions set out in the Australian Standards for the Export of Livestock (ASEL) and the Exporter Supply Chain Assurance System (ESCAS).
The Australian Livestock Exporters’ Council (ALEC) welcomed the historic first. “This first seaborne shipment to China is a ground-breaking moment for our industry and for Australia’s entire beef sector,” said ALEC Chairman, The Hon Simon Crean.
The cattle were sourced by Elders’ North Australian Cattle Company (NACC) within Victoria and South Australia. Patrick Underwood, Manager, NACC said animal welfare is paramount to any Elders shipment, and particularly when opening a new supply chain.
“Elders has been working very closely with Australian and Chinese authorities to ensure this supply chain operates above ESCAS standards,” Underwood said. “Processing of the entire shipment will occur within 14 days of arrival, and Elders will have its own supply chain specialists in attendance the entire time, to monitor compliance and provide additional assistance.”
Crean said the opening up of the China market for feeder and slaughter cattle reflected the growing global demand for live animals as a source of protein. “This exciting emerging market is built on the values Australia shares with China around biosecurity, traceability, welfare and an appreciation for high-quality cattle and beef,” he added. “These values have been the foundation Australia’s existing exports of beef and dairy breeder cattle to China, and so it is a natural progression for the trade to now extend into feeder and slaughter categories.”
“Australian exporters are always investing strategically to help secure new and existing supply chains, and that has certainly been the case in preparation for the China feeder/slaughter trade, as demonstrated by the many months of work which has gone into this first shipment,” Crean said. “China’s ‘closed loop’ cattle supply chains will help ensure the highest possible health, welfare, control and traceability standards are upheld,”
Port Otago Ltd has placed an order with Cargotec-owned cargo handling solutions provider Kalmar for an ESC350 and an ESC450 to add to their all-Kalmar straddle carrier fleet, replacing two CSC models.
“Improved economy, performance, reliability, and safety are key facets of this purchasing decision, and the Port welcomes any developments in Straddle Carrier design that reflect genuine safety improvements,” said Bob Smillie, Maintenance Manager, Port Otago Ltd. “The Port is currently conducting a detailed analysis of Kalmar’s HSC350 Hybrid, a design that is expected to be a leading contender for future Straddle Carrier replacement decisions.”
John Nash, General Manager, Kalmar Port Cranes added, “Port Otago Ltd operates in a pristine area of New Zealand, taking pride in environmental conservation while undertaking their operations. Kalmar therefore focuses on providing solutions to support their operations while maintaining environmental sustainability. Together we are exploring hybrid technology options for Port Otago – a solution with reductions across noise, fuel consumption and emissions.”
Delivery and commissioning of the straddle carriers is expected to take place in August 2017.
Ivan Spanjic is to be Svitzer Australia’s next Chief Commercial Officer, from April 2017, Lloyds List Australia has revealed.
Spanjic is currently Chief Operating Officer of port towage company Svitzer’s operations in Africa, Middle East and Asia, a position he has held since 2013.
Peak ports body Ports Australia has announced the retirement of the organisation’s long serving CEO, David Anderson, effective 10 March 2017.
“During his time as CEO, David has brought great credit to the organisation and unified the membership behind a strong, well developed policy agenda,” said Ports Australia Chairman and CEO of Flinders Ports, Vincent Tremaine. “David has created a strong awareness of port issues with government and other stakeholders and has worked tirelessly to have these appropriately positioned on the public policy agenda.
“While CEO of Ports Australia, David has developed a reputation for fearlessly advocating for the interests of the members.”
Anderson’s retirement brings to a close a career of over 40 years in the field of transport policy and advocacy.
Commenting on his decision to retire, Anderson said, “My tenure as CEO of Ports Australia has been highly rewarding, in serving one of the most significant of Australia’s economic sectors and a membership committed to supporting the well-being of the Australian community through efficient port operations and sustainable port development.
“I thank the members for their strong support and contribution to the success of our organisation over that time.”
Anderson has agreed to make himself available on a needs basis to help with the transition from the date of his retirement, to facilitate an orderly leadership transition.
The agreement between Moorebank Intermodal Company and the Sydney Intermodal Terminal Alliance (SIMTA) for the development and operation of the Moorebank Intermodal Terminal Precinct has reached financial close.
SIMTA is owned by Qube Holdings, one of Australia’s largest freight logistic companies, following the acquisition of Aurizon’s interests in the land and project on 23 December 2016. Qube will develop and operate the open access freight terminal and warehousing precinct under a 99-year lease on the combined Commonwealth- and Qube-owned sites.
In June 2015, Moorebank Intermodal Company signed the agreement with SIMTA for the development of the Moorebank Intermodal Terminal Precinct, which merged the SIMTA and Commonwealth intermodal terminal proposals into one. Moorebank Intermodal Company will continue to be the Commonwealth entity responsible for facilitating the precinct’s development.
Dr Kerry Schott, Chair of the Moorebank Intermodal Company, said the precinct would deliver significant benefits to southwest Sydney and the broader New South Wales economy. “During construction, over 1,300 jobs will be created and once operations are at full capacity the site will employ approximately 6,800 people,” she said. “Together with the recently announced Commonwealth investment in airport infrastructure at Badgerys Creek, the Moorebank Intermodal Terminal will be a major economic contributor to south-west Sydney.”
The precinct will increase the proportion of shipping containers travelling by rail, remove thousands of heavy-truck movements from Sydney’s roads and the nation’s highways every day, and increase the capacity and efficiency of Port Botany.
Moorebank was identified as a priority location for a freight terminal in 2004 and, in October 2016, was included on Infrastructure Australia’s priority list for national infrastructure projects. The site has a direct rail link to Port Botany and the interstate rail freight network which, along with its proximity to major motorways, makes it ideal for an intermodal facility.
The precinct will include an import-export (IMEX) freight terminal with eventual annual throughput capacity of 1.05 million TEU, and an interstate terminal with capacity for 500,000 TEU.
Qube Holdings’ Managing Director, Maurice James, said the Moorebank precinct would transform the freight and logistics supply chain along the east coast.
“The Moorebank development is certainly a once in a lifetime opportunity and Qube is pleased to have reached agreement with Moorebank Intermodal Company to deliver this important piece of national infrastructure,” he said.
“Linking one of the nation’s busiest ports by rail to an inland facility with the sheer scale and location benefits of the Moorebank site is a game changer that will deliver huge long term benefits to both business and consumers,” he added.
Stage one of the project, which received planning approval in December 2016, will see the construction of the IMEX terminal with initial capacity of 250,000 TEU, rail links to the Southern Sydney Freight Line, and container processing areas. The first stage of the interstate terminal will follow with subsequent stages to be developed in line with demand, subject to future planning approvals.
The Commonwealth will invest around $370 million in the development, including funding the rail connection between the terminal and the Southern Sydney Freight Line and land preparation works.
Qube will develop, own and operate the terminals and has the development, property and asset management rights for associated warehousing. The precinct will include up to 850,000sqm of integrated warehousing when fully developed.
The IMEX terminal is expected to start operating in late 2018, and the interstate terminal in early 2020.
The Australian Logistics Council (ALC) has released the program for its 2017 Forum which will take place 7–9 March in Melbourne, Victoria. The Forum 2017 will focus on the required content of the National Freight and Supply Chain Strategy.
The need for such a strategy has been championed by ALC in its election priorities document, ‘Getting the Supply Chain Right’, its video ‘Now is the Time to Get the Supply Chain Right’, and also by Infrastructure Australia in its 15-Year Infrastructure Plan.
In late 2016, the Government committed to establishing a National Freight and Supply Chain Strategy following a comprehensive independent inquiry into how best to support the productivity and efficiency of Australia’s freight supply chain.
ALC’s Forum will focus on the issues that will need to be addressed by the Strategy, including nationally significant supply chains and their access to supporting infrastructure, the adequacy of the institutional framework supporting freight networks, reforms and investments that will affect the efficient movement of freight and the key bodies overseeing their efficient operation.
Speakers confirmed so far include representatives for the major ports including Port of Melbourne Corporation, Aurizon, Australia Post, Australian Rail Track Corporation, Qube, Woolworths and Infrastructure Australia. Hon Darren Chester MP, Minister for Infrastructure and Transport, and Hon Luke Donnellan MP, Minister for Roads and Road Safety and Minster for Ports, will also be sharing their insight at the event.
To find out more about the speakers attending and session topics, or to register to attend, click here.