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.
Moorebank Logistics Park, Australia’s largest intermodal precinct, continues to make headlines with yet another multi-million funding boost. Freight and logistics company Qube which is developing the project, has secured $150 million from the Clean Energy Finance Corporation (CEFC) under the premise of increasing the use of rail networks to distribute containerised freight to and from Port Botany.
According to the CEFC, the project is expected to reduce freight truck emissions by switching the movement of over 1.5 million freight containers at Port Botany from road to rail, with an estimated annual abatement of more than 110,000 tonnes of CO₂.
As such, it is expected to reduce the distance travelled by container trucks on Sydney’s road network by 150,000km every day, and 93,000km per day for long-distance interstate freight trucks.
Locally in Sydney, it will cut an estimated 3,000 truck journeys per day from Sydney’s road network, particularly the M5, according to the CEFC.
“Emissions from road freight transport are a substantial part of our carbon emissions challenge. By switching to rail solutions, the Moorebank project will reduce emissions, reduce urban congestion and improve national freight connectivity for years to come,” said CEFC CEO, Ian Learmonth.
Learmonth added that despite its massive scale – operating across a site the size of Sydney’s CBD – the freight and energy efficiencies delivered via the Moorebank Logistics Park are expected to result in net emission reductions totalling more than two million tonnes of CO₂ over a 40-year period.
However, this net reduction takes into account construction emissions, embodied energy within building materials, offsite transportation, operational emissions and savings from the onsite use of renewable energy. It does not factor in inevitable advances in technology over that 40-year period – for example the imminent introduction of Euro-VI engine technology.
Still, Qube Holdings’ Managing Director, Maurice James, said the Moorebank Logistics Park would transform the containerised freight supply chain in Sydney and deliver significant community-wide benefits.
“Our focus at Qube has always been on how we can improve the efficiency of the import and export supply chain, how we can provide a faster and more cost-effective way to get goods to consumers and the Moorebank terminal is certainly a key part of that strategy,” he said.
“Being able to deliver a faster and more reliable supply chain that creates savings for our customers, as well as remove thousands of truck trips from our roads at the same time as delivering very significant environmental benefits is a great trifecta.”
The Moorebank Logistics Park will be developed across 243 hectares in south-western Sydney, taking advantage of its location near the Southern Sydney Freight Line, M5 and M7 motorways and in an area of rapid population and economic growth.
It is expected to deliver “significant job creation”, with the precinct employing as many as 6,800 people when operating at full capacity and over 1,300 jobs to be created during the construction phases.
Australian food distributor PFD Food Services will soon add a new cold storage and food production facility to its portfolio in western Sydney.
Frasers Property Australia will construct the $70 million, 22,208m2 development on a 60,000m2 plot at its industrial site in Chullora, 15km west of the Sydney CBD.
It is expected to be completed in mid-2018.
PFD also recently commissioned Vaughan Constructions to build a $36 million, 25,500m2 facility on a 74,400m2 site in Knoxfield, 27km east of Melbourne’s CBD.
It will comprise 20,900m2 of refrigerated, ambient and seafood storage, along with 3,000m2 of office space.
Scheduled for completion in late 2017, the development recently hit the halfway mark, and Vaughan Constructions has shared a time-lapse video of the project’s progress.
“Construction of PFD Food Services’ new Knoxfield facility is progressing well,” Andrew Noble, Managing Director, Vaughan Constructions told Logistics & Materials Handling. “Vaughan Constructions is anticipating project completion at the end of September 2017.”
DP World Australia has signed an agreement with Cosco Shipping Lines to be stevedore of choice on all major services into Australia.
Chinese container liner company Cosco Shipping Lines has major services in Australia calling at DP World Australia terminals in Brisbane, Sydney and Melbourne.
Paul Scurrah, CEO and Managing Director, DP World Australia, said this contract will deliver the majority of containers through DP World Australia for an extended contract period, resulting in a stronger relationship between the companies.
Brian Gillespie, Chief Commercial Officer, DP World Australia, added that Cosco Shipping is successfully growing its global market share in a fiercely competitive global shipping market.
“We are incredibly pleased to be chosen as the stevedore and logistics partner of choice by Cosco Shipping Lines as they continue to successfully grow their volumes between Asia, Australia and the rest of the world,” said Gillespie.
Yong Pan, Managing Director, Cosco Shipping – Oceania, said that DP World Australia had demonstrated a level of service that set them apart in Australia.
“Last year, we selected DP World Australia as our major stevedore service for our Australian flagship A3 services,” said Pan. “This agreement confirms our selection of DP World Australia as our stevedoring and logistics partner in Australia.
“My congratulations to all at DP World Australia for their efforts and commitment to COSCO shipping.”
Transport giant Linfox has embraced the global e-commerce boom by adding a new array of fulfilment services to its portfolio that range from storage all the way through to product repairs.
Known for taking a proactive approach on new technology and shifts in market demand, Linfox has embraced the global e-commerce boom by adding a comprehensive range of fulfilment services to its portfolio.
“The market is moving towards online retailing and omni-channel systems, which is something traditional supply chains can’t necessarily support in a cost-effective way,” John Pucek, General Manager – Operations Development at Linfox, told Logistics & Material Handling.
“That’s why transport businesses like Linfox are evolving into much more multi-faceted organisations. Our new fulfilment operation in Sydney is the latest example of that evolution.”
The Sydney facility is designed to provide comprehensive fulfilment services for e-commerce operations – ranging from basic storage, ‘pick and pack’ and dispatch services through to product customisation, kitting, reverse logistics, repairs and even order track and trace services.
“We’re also developing our own, enterprise-grade e-commerce solution for the consumer goods market,” he said.
“A company will be able to purchase a fully managed service where we provide the e-commerce platform, a management team and online store management. We even do all the content management, and it will be integrated into our fulfilment.”
The service is designed for small- to medium-sized businesses trading between $120–300 million. “Rather than having to invest in their own e-commerce platform, they can get the complete package from us,” he explained – adding that the company launched the fulfilment and e-commerce projects at a strategy level in January 2016.
“We secured our first customer, consumer electronics company Belkin, in November 2016, and then went live in April this year,” he said.
Initially, Linfox will continue to focus on the consumer electronics market, he added, and it was recently announced that the company’s second confirmed customer is audio company Sennheiser. Next up are health and beauty. “The service offering suits many industries, but they’re the two current strategic targets,” he shared.
“We want to be a real partner of consumer goods organisations and retailers,” Pucek added – highlighting the evolutionary leap Linfox has taken from its beginnings as a transport operation.
“We’re hoping to be more so a partner than a 3PL – we want to be more integrated with them to help them grow their businesses, and now we’re looking at the other channels for which they want to grow their business and how we can support them by investing in the technologies for them.”
Pucek said that as consumers and small businesses demand better choice in how and where they receive their products, the market will continue to see change and innovation when it comes to last mile delivery.
“The challenge for traditional operators will be to bend and flex with consumer demand,” said Pucek.
“Linfox is investing heavily in our systems to provide small businesses and end consumers with greater visibility throughout the fulfilment supply chain.”
Sydney company FreightExchange is looking to take its online freight capacity marketplace overseas, with support from the NSW Government.
John Barilaro, Deputy Premier and Minister for Regional NSW, Small Business and Skills, said the company, which received a $98,000 Building Partnerships Grant from the private sector–led, NSW government–backed ‘Jobs for NSW’ program, had grown 587 per cent in 2015/16, with revenue of more than $1 million and over 800 carriers and 1,700 shippers on its books.
“FreightExchange is a great example of a clever company developing technology to make NSW more efficient while creating jobs and growing the economy,” said Barilaro.
“Former management consultant and FreightExchange founder and CEO Cate Hull saw the massive amount of under-utilised capacity of trucks on Australian roads and she knew she was on to something.
“This smart online platform uses GPS tracking to take advantage of unused capacity on long-haul freight by connecting shippers with carriers and allowing them to instantly book their freight, get a price and get it moving.
“The company, which now has 12 staff and focuses on long-haul trucking, has developed apps which allow companies big and small to plug directly into the system to match unused capacity with freight orders instantly.
“After building the company from scratch, Cate is now hoping to take the company global, with a pilot set for New Zealand this month and plans to expand to Shenzhen, Singapore and Hong Kong,” Barilaro added.
Hull said the Jobs for NSW Building Partnerships grant had been a huge help in growing the business.
“To big businesses it might sound like a small amount but to us it was significant,” she said.
“We used the Jobs for NSW grant to build the product, but also to deal with the growing pains of a small company – the team has close to doubled in the past year.
“The more we can drive efficiency the better it is for NSW. The dream is to create a platform that in future orchestrates self-driving trucks and automates the buying of selling and freight capacity internationally – a global platform,” Hull said.
Industrial property continues to be in high demand in the transport and logistics industry.
According to Fairfax, various multi-million projects are currently underway in both Sydney and Melbourne, with a $169.3 million sale to Frasers Logistics & Industrial Trust the most recent example.
The sale, which Frasers referred to as a ‘restocking’, covers a diversified portfolio of seven major industrial assets, spread across the eastern seaboard.
According to Fairfax, it comprises four completed properties and three properties under development, has a weighted average lease expiry of 9.6 years and all properties are fully leased or pre-committed.
“Twenty per cent of the assets are in Sydney, 60 per cent in Melbourne and the remainder in Brisbane,” Fairfax reported.
Meanwhile, Stockland started work on a $80 million office and warehouse estate in Warwick Farm, close to the Hume Highway, M5 and M7 motorways and near the Southern Sydney Freight Line and future Badgerys Creek Airport.
The company had only recently redeveloped two warehouse facilities in Melbourne to turn them into a ‘logistics offering’.
Fairfax quoted Michael Fenton, the Australian head of JLL, an American professional services and investment management company specializing in real estate, as saying that the markets continues to set new records every year.
2016 volumes reportedly reached $6.89 billion, surpassing last year’s all-time high. Portfolio transaction volumes have grown 155 per cent per annum since 2013, Fairfax noted.
“Sydney and Melbourne will still be considered as high-growth markets, however pricing will be accordingly sharp,” Fenton told Fairfax.
“In these markets, secondary yield compression hasn’t occurred to the same intensity as that in the prime over the past few years. As such, some assets will have a greater margin to absorb further rises in bond rates. JLL believes yield spreads in Sydney and Melbourne will narrow in the near term.”
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.
Sendle has received the Good Design Award for Service Design – Commercial Services at the 2017 Good Design Awards, held on 8 June at the Overseas Passenger Terminal in Sydney.
The accolade was given in recognition of Sendle’s business model which is specifically designed for small businesses.
Commenting on the win, James Chin Moody Founder and CEO, Sendle, said,
“We started Sendle to make parcel delivery for small businesses simple, reliable and affordable – and we’ve done this by focusing on good design across our software, courier network and customer support.
“The ease of account creation, intuitive interface and simple pricing is designed to help very small businesses, while powerful features and integrations satisfy larger business needs. Good design should not be overlooked in any business, and it’s given us a strong competitive edge in a market monopolised by the post office.”