1. PLANNING
FOR THE
FUTURE AT
PORT OF
NEWCASTLE
Role of a container terminal in NSW diversification & growth
Prof Roy Green, Chair, Port of Newcastle
2. THE BOX THAT CHANGED THE WORLD
“Although only a simple metal box,
the container has transformed global
trade… New research suggests that
the container has been more of a
driver of globalisation than all trade
agreements in the past 50 years
taken together”
- The Economist, May 2013
https://www.youtube.com/watch?v=0MUkgDIQdcM
3. Around 95% of the world’s non-bulk commodity trade is
containerised, amounting to $4 trillion a year in sectors
such as advanced manufacturing & agribusiness
Container trade is forecast to double in the next 20 years,
with focus on ‘smart specialisation’ by agile enterprises in
global markets & value chains
Australia’s export trade is largely commodity-based, led
by coal & iron ore, with post-mining boom transition to a
more sustainable, knowledge-based economy
Over 50% of containers leave empty from NSW, making
‘fresh air’ our largest non-bulk export & highlighting
opportunity for new areas of competitive advantage
AUSTRALIA - TAKER OR MAKER?
6. “Older industrial cities represent
promising regions for strategic
investment and critical centers for
promoting inclusive economic
growth”
Brookings Institution, April 2018
REGIONAL TRANSITION
7. WHY A NEWCASTLE
CONTAINER TERMINAL?
1. Reduced freight costs
2. Reduced port congestion
3. Increased freight efficiency
4. Reduced infrastructure costs
5. Catalyst for regional growth
11. NEWCASTLE MAYFIELD SITE
Starting with Newcastle’s ‘catchment’, this 80 hectare former
BHP site could take 500,000 TEU off Sydney roads & reduce
NSW landside transport costs by at least $1.3bn
“The former BHP steelworks site at Newcastle Port will be
secured for port use. When Port Botany reaches capacity
Newcastle will be the state's next major container facility.”
NSW Government Ports Growth Plan 2003
“Port Kembla will act as a progressive overflow facility for
Port Botany once its operational capacity has been
reached. This is expected to occur after 2040, with Port
Kembla requiring development to increase its capacity to
accommodate the overflow.”
NSW Draft Freight & Ports Plan, 2018
13. 0%
18%
35%
53%
70%
Tamworth - Newcastle Narrabri - Newcastle Moree - Newcastle Dubbo - Newcastle Dubbo - Newcastle (vs.
Port Kembla)
Newcastle - Central
Coast
CostSavings(%)
Origin and Destination
Newcastle Rail Savings vs Port Botany
640m 900m
1200m 1500m
[Train lengths
in metres]
RAIL COST SAVINGS FOR EXPORTERS
Source: Lycopodium
14. FREIGHT & PORT CHALLENGES
1.3 MILLION
CONTAINERS
THROUGHPUT
CAPACITY
STAGE TWO:
Port Botany
• Currently 2.4m
container movements a
year, rising to over 5m a
year by 2030
• Massive congestion
across Sydney as more
than 80% of containers
transported by road
• Huge investment
required in road & rail
infrastructure, with $60-
80 tolls adding $350m
to freight costs (in
present value terms)
• Transport can account
for 30% of final cost of
goods, with 2.5%
productivity gains from
port competition
Port of Newcastle
• Operating at 50%
capacity & able to
manage 2m container
movements a year
• While 87% of container
imports go to Sydney,
only 36% end up in
eastern Sydney with the
rest to western Sydney &
regional NSW, including
27% to Hunter & northern
NSW
• Only 21% of container
exports originate from
eastern Sydney, with
22% from western
Sydney, 18% from
southern NSW & 38%
from Hunter & northern
NSW
15. Port of Newcastle has capacity to more than DOUBLE its
operations of 4,500 vessel movements a year with a viable &
competitive container terminal
It currently manages $24bn in trade value (167m tonnes),
contributing over $1.8bn to NSW Gross State Product &
10,000 FTE jobs
GLOBAL GATEWAY
FOR REGIONAL AUSTRALIA
16. REGIONAL DIVERSIFICATION
• Natural catchment
is home to more
than 27% of the
State’s population
• Catchment
encompasses
advanced
manufacturing,
renewable
technologies,
agribusiness
• Container terminal
will cut transport
costs by $200/TEU
for regional
exporters
STAGE ONE:
350,000 CONTAINERS
THROUGHPUT
CAPACITY
17. MORE COMPETITIVE NSW
• NSW exporters
can benefit
from transport
cost savings of
more than 30%
• 38% of NSW
container
exports
originate from
Hunter region,
but currently
exported out of
Sydney
• Grow & retain
trade in NSW,
rather than lose
trade to other
States
1.3 MILLION
CONTAINERS
THROUGHPUT
CAPACITY
STAGE TWO:
18. TRANSFORMATION OF HUNTER
& NSW ECONOMY
STAGE 3:
2 MILLION
CONTAINERS
THROUGHPUT
CAPACITY
• Optimal freight
& ports
network, with
dedicated rail
infrastructure
replacing
trucks
• Effective &
efficient
movement of
freight
• Reduced
congestion &
increased
productivity
19. RAIL FREIGHT INFRASTRUCTURE
In medium to longer term,
NSW will require
investment in a new
dedicated rail freight
corridor between
Newcastle & Port Kembla,
with network of
intermodals in western
Sydney
This will further reduce freight costs, increase freight and ports
efficiency & mitigate Sydney congestion, making some costly
road & rail infrastructure projects unnecessary