Maritime & Transport / Rail

Industry Insights: What strategies will we see for NSW Ports?

By Paul Zalai*, Director, Freight & Trade Alliance (FTA)

Paul Zalai, Director, Freight and Trade Alliance

Paul Zalai

We have interesting days ahead with Hutchison operating as the third stevedore at Port Botany and incumbent stevedores (DP World and Patrick) continuing to invest in equipment to improve efficiency.

With the cap on the port’s container throughput removed as a part of the 99 year lease arrangements to NSW Ports, the scene is set for an efficient and more competitive stevedoring environment. The likelihood is that we will see improved efficiency on the ship side of the operations to deal with the long term projected growth in trade volume … but how will the landside cope?

Clearly, the rail interface and use of intermodal terminals will be vital in meeting the demand and alleviating traffic congestion in the port precinct.

So what are some current issues for consideration?

The Sydney Ports Corporation did what many thought was not possible in establishing a new operational framework at Port Botany.

To the credit of transport operators and stevedores, all responded positively to the new disciplines associated with the Port Botany Landside Improvement Strategy (PBLIS). The result being improved truck turnaround times and the port being virtually free of waiting time detention fees.

Prior to PBLIS, industry was desperately looking at alternatives to the road interface and hence rail was considered and utilised by many importers, exporters and their intermediary service providers.

Now that the road interface is humming along, the rail alternative is not so attractive due to comparative higher costs, delays and lack of predictability in staging availability.

intermodal conference sydneyAssuming that Hutchison takes a reasonable share of business from the incumbent stevedores, the pressure on stevedore container receipt and delivery processes should if anything further ease … at least until the economy picks up again and overall volumes increase to meet long projected volumes.

Is it therefore reasonable to assume that over the short to medium term that road service delivery at Port Botany is likely further improve?

I suppose the answer depends on what resources the stevedores allocate to the landside task as a part of their remodelling to manage their revised volumes.

So assuming that we will have an efficient road landside operation for the foreseeable future, how will this stack up against rail?

Aligning windows, competing with passenger movements and the fact that the stevedores have separate sidings makes it virtually impossible for rail to offer the same service predictability and costs.

The previous NSW Government at one stage suggested implementation of an artificial pricing mechanism to inflate the cost of road movement in order to make rail more commercially attractive. This is not a desirable outcome. Surely the international trade sector is subject to enough fees and taxes.

It will be interesting to see what strategic direction is taken by NSW Ports.

What are your thoughts?

*Paul Zalai will be chairing AusIntermodal 2013, to be held on the 9th & 10th October in Sydney.

One thought on “Industry Insights: What strategies will we see for NSW Ports?

  1. “The previous NSW Government at one stage suggested implementation of an artificial pricing mechanism to inflate the cost of road movement in order to make rail more commercially attractive.” Such an idea was proposed about 30 years ago by a Commission of Inquiry, and given the high external costs of road freight, is worth revisiting.
    In its 2012 Review of access pricing on the NSW grain line network, the Independent Pricing and Regulatory Tribunal (IPART) of NSW gave attention to road cost recovery from heavy trucks, and external costs. In Section 4.1 of the report, two sets of values are given for road transport external costs being 3.88 and 2.11 cents per net tonne km, whilst for rail freight in urban areas, the external costs were 0.61 and 0.75 cents per net tonne km. The difference of the average of these external costs is about 2.2 cents per net tonne km. So rather than inflating the cost of road freight, it would make sense to remove a hidden subsidy, as above, 2.2 cents per net tkm.

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