The Hurdles and Solutions to the Land Transport task in Australia 13.06.07

1. The Hurdles and Solutions to the Land Transport task in Australia13.06.07

2. Agenda • The Australian Supply Chain • The Players in the Australian Supply Chain • The Inefficiencies within the Australian Supply Chain • Why do we need to fix it? • What can we do to fix it? • Within individual elements • The interdependencies • The role of Governments • Conclusion

3. The Australian Supply Chain Regulation / Policy Manufacturer Terminals / Warehouses / DCs Road / Rail Distribution Retailers Consumers Importer Sea Port Infrastructure

4. Key Players in Australian Supply Chain Australian Government State Governments Port Authorities Regulation / Policy Terminal Operators Road / Rail Retailers Terminals Importer Sea Port Consumers Road operators Rail operators Freight Forwarders Stevedores Landside Port Logistics & Services Infrastructure Track Owners (Government and Private) Port Authorities Road owners (Government and Private)

5. Inefficiencies in the Supply Chain • Fragmented regulatory environment • State and Federal jurisdictions • Government Interference in port and rail operations • Mismatch in infrastructure pricing mechanism for road and rail Regulation / Policy Road / Rail Terminals/ DCs Retailers Importer Sea Port Consumers • Underinvestment in rail terminals (interstate and port related) • Complexity in port – land interfaces Infrastructure • Maintenance deficit on track • Inadequate port – land interface infrastructure • Inconsistent signalling and communications • Increasing rents for port land

6. The task is growing…. Why do we need to fix this? (btk) Total Domestic Freight TaskAustralian land freight task has been estimated to double between 2000–2020 International Trade Containerised cargo in Australian ports is forecast to grow 6.5% p.a. indefinitely

7. Why do we need to fix this? Demand is changing… • Increased choice • Lower prices • Manufacturing moving off-shore • Higher level of imports • Consolidation of deliveries off-shore Road / Rail Terminals / DCs Retailers Importer Sea Port Consumers • Quicker supply chains • Increase in time sensitivity & reliability • Lower unit costs • Bigger ships • Compressed sailing schedules Environmental sustainability is expected

8. What can we do to fix it? – individual components • Continued investment to increase quay line efficiency • Optimisation of port productivity – through technology and people • Modify Govt. policy to allow market forces to drive efficiency, and to motivate investment by private sector • Continued investment in existing and new terminals • Improve rail terminal productivity – through design and operating procedures • Construction of more efficient, better located DCs Road / Rail Terminals/ DCs Retailers Importer Sea Port Consumers • Continued investment in rolling stock • Broaden range of services • Improve reliability of services • Encourage freight on rail to achieve environmental and social benefits

9. Rail Mounted Gantry

10. Port Botany - RMGs

11. Post Panamax Cranes arriving at Port Botany

12. AutoStrads

13. Fisherman’s Island

14. What can we do to fix it? – individual components • Continued investment in existing and new terminals • Improve rail terminal productivity – through design and operating procedures • Construction of more efficient, better located DCs • Continued investment to increase quay line efficiency • Optimisation of port productivity – through technology and people • Minimise Govt. intervention to allow market forces to drive efficiency Road / Rail Terminals/ DCs Retailers Importer Sea Port Consumers • Continued investment in rolling stock • Broaden range of services • Improve reliability of services • Encourage freight on rail to achieve environmental and social benefits

15. New NHWH coal wagons

16. What can we do to fix it? – individual components • Continued investment to increase quay line efficiency • Optimisation of port productivity – through technology and people • Modify Govt. policy to allow market forces to drive efficiency, and to motivate investment by private sector • Continued investment in existing and new terminals • Improve rail terminal productivity – through design and operating procedures • Construction of more efficient, better located DCs Road / Rail Terminals/ DCs Retailers Importer Sea Port Consumers • Continued investment in rolling stock • Broaden range of services • Improve reliability of services • Encourage freight on rail to achieve environmental and social benefits

17. Kewdale Precinct

18. What can we do to fix it? – interdependencies • Joint management of key interface points, such as Port Botany Rail Yard and inland terminals Road / Rail Terminals/ DCs Importer Sea Port Consumers Retailers • Investment in IT to provide visibility of product movements • Joint planning of interfaces to accommodate operational challenges of each (eg time slots, returns of empty containers)

19. What can we do to fix it? – Government’s role Regulation / Policy • Standardise regulatory environment • Not in theory but in practice • Ensure it provides reduced complexity and cost • Clarify and manage State and Federal jurisdictions • Clearly identify areas of accountability • Clearly identify areas of collaboration / joint investment • Establish working groups as required to tackle real challenges, rather than finger pointing • Minimise Government Interference in port and rail operations • Government monitoring must reflect output measure • Focus must remain on achieving maximum efficiency of ports • Balance infrastructure pricing mechanism for road and rail to ensure appropriate • Provide incentives to operators and shippers to utilise more environmentally conscious technologies, operating models and equipment

20. What can we do to fix it? – Government’s role • Reverse maintenance deficit on track • Government (Auslink, ARTC and States) increase expenditure on rail networks, linking ports and major centres • Improve port – land interface infrastructure • Governments (Auslink, ARTC and States) increase expenditure on enhancing port – land infrastructure • Governments to provide land and zoning for private sector development of inland terminals and new interstate terminals • Standardise signalling and communications • Government financial contribution to move to standard, world best practice signalling and communications nationally Infrastructure

21. Over 1000 km of new track • Over 1000 km existing track to be upgraded • All to be built to AAR standards • 50 years single freight operator concession • Government capital contribution to construction costs • Government gifting of rail corridor The Saudi Model

22. Conclusion – Our skinny constrained supply chain becomes….. Regulation Road / Rail Terminals/ DCs Retailers Importer Sea Port Consumers Infrastructure

23. A bigger fatter unconstrained supply chain – and a platform for economic growth Regulation Road / Rail Retailers Terminals/ DCs Importer Sea Port Consumers Infrastructure