By Ash Sinha, Policy and Operations Director, Ports Australia
The story of growth is one that people in the logistics, freight and supply chain sector know too well. Every day our sector is discussing and planning how to move more for less and how to do that faster.
Our sector knows better than any other that Australia’s population is forecast to grow from 25 million at present to 30 million by 2030; that’s five million in around ten years. According to ABS data, that’s the same size growth we experienced from 1999 to 2015.
We know this growth comes with challenges. For many this election has highlighted that while freight is undoubtedly more on the agenda than ever before, there are worrying signs that we are not prepared for the inevitable growth.
However, unlike other sectors, we have uniqueness and advantage. In many ways, the infrastructure, freight and supply chain sector is a team. Yes, we all have our competitors, but an investment in one area generally benefits the whole system. After all, we are called the supply chain.
So through us may be the key to not just growth but better growth, sustainable growth.
Effective port operation
For Ports, we know container movements are projected to increase by 165 per cent by 2031, while non-containerised trade is expected to grow by 138 per cent. These are not small numbers, so do we have the infrastructure to keep up with this growth?
Australian Ports have heeded the projections and invested in upgrading their infrastructure including through automation. Ports such as Fremantle have installed truck management systems to reduce congestion at and into the Port while providing information to drivers and transport operators to make timely and informed decisions.
Other ports such as Newcastle have ship scheduling systems focused on optimising port calls and management of berths. DP World at the Port of Botany has seen a shift to automation result in increased truck grids, a safer work environment and increased operational efficiency.
The Victorian International Container Terminal (VICT) at the Port of Melbourne has seen similar benefits from automation including shorter Port stays for ships and trucks, and increased market share for its services. VICT also boasts innovative x-raying technology for containers which has contributed to its operational efficiency. All this adds to an effective operation withinthe port boundary.
It’s planning and investment such as these that are helping improve the productivity of our nation and keeping up with its growth. Such stories need to be told broadly so that the supply chain shares the knowledge of these innovations and potentially applies some solutions in their businesses. VICT will be sharing more details at the upcoming Ports Australia Business and Operations Conference in Townsville.
Solving port connectivity helps to solve congestion
However, what about outside the port gate, is our infrastructure efficient in getting goods to Australian households? Can we move stock from business to global markets at a globally competitive price? Ports are the trade gateway of this country, moving over 98 per cent of Australia’s physical trade. How do we take advantage of growth?
Port connectivity is a significant issue that is adding to the congestion story that is being played out in our cities. The configuration of the roads around many of our major ports and intermodal terminals do not support the use of high productivity vehicles.
This leads to smaller and many more trucks on the road leaving the Port which eventually results in productivity loss along the full corridor and the full logistics task, increases in overall transport costs and end costs to consumers, our goods being less competitive in the global market, poor environmental outcomes and greater congestion.
Urban transport congestion in Australia’s capital cities itself is costing $13.7 billion and is forecast to increase to $53.3 billion by 2031. Congestion increases pollution, the cost of living and decreases livability.
Clogged roads with slow moving traffic which include large visible trucks that do not all have to be there is one of the problems. Some of this could easily be moved by ship through improved coastal shipping legislation that does not require any government investment.
Building better freight corridors
Alternatively, governments could invest in securing and building freight corridors that support the efficient movement of freight. Infrastructure Australia’s Corridor Protection report found that Australian governments could save $10.8 billion in land purchases and construction costs with adequate corridor protection.
One example highlighted in the report is a future alternative freight rail connection to the Port of Brisbane. Infrastructure Australia estimates we could save up to $66 million if appropriate corridor protection mechanisms are established now, ensuring freight reaches the port gate.
The current Inland Rail plans stop well short of the Port requiring significant double handling in moving freight on to trucks on roads. The present $1.5 million government study looking at the feasibility of options for improved rail freight connections to the Port of Brisbane from Acacia Ridge will tell us shortly whether Infrastructure Australia is right and how we can potentially save millions by moving freight efficiently to/from the Port of Brisbane.
Building better freight corridors is also necessary and entails planning for first/last mile issues, turning performance, entry length onto main roads, approach visibility for drivers, vertical clearance restrictions, etc. Industry estimates indicate that an exporter using a semi-trailer instead of a B-Double due to first/last mile issues could gain up to 50 per cent in freight productivity is able to use B Doubles for the entire journey. The use of smaller trucks or double handling resulting from the lack of planning and investment is a cost, one that is at the heart of port connectivity.
Investing in infrastructure solutions
So what about rail as an alternative for some of the goods on these trucks? Rail facilitates the most efficient movement of freight but can be limited for various reasons including, port-rail interface issues (e.g. a lack of adequate below-rail infrastructure, lack of flexibility in train windows and unreliable train departure and arrival times), conflicts with passenger movements on the same lines, and maintenance and investment costs that are not always supported by required utilisation rates.
Many of our key ports also do not have dedicated freight rail lines. Accordingly, some businesses choose to move their freight along less restrictive transport modes. For example, only four per cent of freight is moved by rail from the Port of Brisbane, a port that imports the majority of Queensland’s goods and some for Northern New South Wales.
Governments have started to hear our sector’s concerns and more importantly beginning to act and plan. Elections also do bring out the best in proposed infrastructure investment.
The Port Botany Rail Duplication is a much-needed investment for now and the future, easing congestion, improving efficiency and securing the supply chain to/from the Port. The Port will see the current handling of 2.3 million twenty-foot equivalent units (TEU) containers triple to seven million TEU per year by 2040. That’s a lot more containers ending up on trucks on our roads without such an investment.
Another good news story is the recent planned $100 million investment in Gladstone to provide road trains access straight into the Gladstone Port without any decoupling of trucks while ensuring connection to the Bruce and Dawson highways. The current lack of port connectivity at Gladstone sees some bulk grain goods driven past the Port of Gladstone through to the Port of Townsville. This results in estimated increased transport costs of traversing an additional 900km (circa) to be around $3,000 per day for a B Double road train (this includes no adjustment for a backhaul movement).
More is needed if we are to keep up with a rapidly growing population and its demands for goods. Infrastructure development is not an overnight result but takes years of planning, investment and building. Time frames of 2030 and 2040 are not that far away in the eyes of infrastructure planners.
This story of growth and it’s challenges is not a new one. However, it does require new ideas, courage and partisanship. For a start, the much anticipated National Freight and Supply Chain Strategy needs not just to be released, but to be rigorously discussed with a holistic approach to Australia’s future freight and supply chain management.
Ports Australia is holding its first Business and Operations Conference in Townsville this June. Discussing the different strategies and technologies that increase efficiency inside and outside the Port gate.
