Presented at the 2017 AITPM National Conference by Mark Stone

1. Mark Stone
The Tasmanian
Freight System –
Insights and
Reflections
Mark Stone,
Aurecon

2. 2
Contents
• Project scope and overview
• Methodology: Supply Chain and Ports and Shipping
• Tasmanian freight context
• Investigation
Cost – Shipping, Road and Benchmarking
Supply chains
Capacity
International Direct Call
• Key observations
• Suggested Improvements
• Tasmanian Integrated Freight Strategy
• Subsequent Developments

3. 3
Project scope
The scope of the project is to undertake a detailed analysis of:
• Transport and logistics supply chains across key commodity
groups; and the costs of shipping as a modal component of the
supply chain (Bass Strait and internationally).
• Identify impediments to supply chain operations in Tasmania.
• A review of Bass Strait shipping and associated costs to identify
those components that can realistically be influenced.
The project is being undertaken in two parts – one report:
1) Supply Chains in Tasmania
2) Shipping and Ports Review

4. 4
Project Overview
Domestic
Freight
Exporters Comments
Cost Exports - long chains, many costs
Service Exports - bumped, containers hard to find
Supply chain – commodity
Supply chain - system Exports - road trip and transhipment; Empties
Shipping capacity At the limit in peak season
Port capacity

5. 5
Supply Chain Methodology: Supply chain mapping
Volume
$/TEU
$/TEU
Questions:
What do you do?
• what volumes?
• from/to where?
What’s good about freight?
What is not good?
Opportunities for improvement?
What are your costs?
“Node”
“Arc”
Definitions:
Nodes: Terminals, processing
plants, distribution centres
Arcs: Roads, rail, sea, air

6. 6
Supply Chain Methodology: Issues
• Data masked – door to door
• Aggregated
• Veiled
• Different units
• Messy
• Commercial issues with sharing data
• Happy to tell, not happy to publish
• Information still sufficient for study
Takes longer to build data sets.
Lots of inferences, answers
“indicative”
Report aggregated to protect
confidentiality
Commissioned survey – Transeco
Reference against mainland
Synthesised from interviews

7. 7
Ports and Shipping Review Methodology
• Expert review of Tasmanian shipping services and ports
• Interviews with freight providers, freight forwarders, ship brokers and
infrastructure providers.
• Two benchmarking studies of short sea Ro-Ro shipping services
similar to Bass Strait services:
• Cook Strait (NZ)
• Ro-Ro freight oriented services between Immingham (UK) and
Rotterdam (Netherlands) and Immingham and Cuxhaven
(Germany)

8. 8
Containerised freight

9. 9
Review of costs: Roads
Truck Utilisation 1 TEU 2 TEU 3TEU
19m Semi-Trailer $2.17 per TEU/km $1.09 per TEU/km N/A
19m Semi-Trailer
Refrigerated
$2.52 per TEU/km $1.26 per TEU/km N/A
26m B-Double $2.31 per TEU/km $1.16 per TEU/km $0.77 per TEU/km
Source: Transeco – Report on Heavy Vehicle Road Freight Transport Costs in Tasmania
• Similar to mainland and NZ road freight costs, which range $1.05 to $1.20/TEU/km

10. 10
Review of costs: Shipping
Notes: Wharf gate to wharf gate prices, containers only.
• Generally varies with volume

11. 11
Review of costs: International Shipping
• Like for like comparisons hard to make
• Nominal price of Bass Strait freight 34% more expensive than UK comparison

12. 12
Benchmarking
• Sea freight is two to three times as costly as road freight
• TFES makes Bass Strait freight comparable to mainland rates
$-
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
Container - Hobart to
Melbourne
TFES Assisted
Container - Hobart to
Melbourne
On land - Semi -
733km
On land - B-Double -
733 km
$1598.85
$933.42
$787.98
$561.97
Road Leg Loading Ship Leg Unloading Further Road Leg

13. 13
Export shipping costs
Port and Ancillary Charge Indicative Rate
Terminal Handling Charge (THC) $200 - $300
Basic Service Rate Additional
(BSRA)
$150 - $200
Security $20
Bill of Lading $60 - $100
Manifest $25
Indicative total $450 - $650
• Export shipping costs are high due to multi-step supply chain
• Road and Shipping Charges $1200 - $1600
• Tasmanian Road Leg: $300
• Bass Strait Shipping: $800 - $1200
• Melbourne Road Leg: $100
• Export Charges $750 - $1150
• Empty Container Reposition: $300- $500
• Port and Ancillary Charges: $450-$650
• TOTAL per TEU $1950 - $2750

14. 14
Representative supply chains
Supply
Chain
Name
Commodity
Perishable
Overnight
Time
sensitive
Price
sensitive
Volume
FY 11/12
(TEU)
Volume
%
Fresh Vegetables, Fish, Fruit x x x 35,000 16%
Perishable
Confectionery, Butter
and Cheese, Misc Food
preparations, Livestock,
Meat, Frozen vegetables
x x 31,000 14%
Low
inventory
Newsprint, Paper, Misc
manufactures, Beer,
Crude Fertiliser and
minerals, animal foods
x 52,000 23%
Low cost
Zinc, Aluminium, Scrap
Metal, Pulp and waste
paper, Furniture, Timber
x 26,000 12%
Empty Empties x 57,000 26%
Unclassified Various 22,000 10%
Total 30% 16% 53% 37% 223,000
Time
sensitive
Price
sensitive

15. 15
Individual supply chains - point to point
• Many supply chains are point to point and therefore efficient
• Make and ship model

16. 16
Collective supply chains – empty containers
20 ft 40 ft
All
Containers
(TEU)
Wheeled
All Unitised
(TEU)
Entering Tasmania 27016 5690 38396 4403 47202
Leaving Tasmania 47706 5023 57752 8208 74168
74722 10713 96148 12611 121370
Our understanding
• Mismatch between international containers and domestic
• Mismatch between sizes 40’ in and 20’ out
• Coordination between carriers?
Note: One trailer = 2 TEU
• Possible planning problems
• Empty container movement – 27%

17. 17
Shipping capacity
Rough ready reckoner:
Demand:
Per month/TEU 16,000
Supply:
Daily capacity:
Toll: 350
Sea Road 200
TT Line 140
Total: 690
Times 26 days per month (say)
= 18,000 TEU
Utilisation: 88%
85% capacity
• Shipping is at its capacity limit across Bass Strait
• Freight providers do well to move these volumes

18. 18
Port capacity
• Sufficient space for anticipated growth at existing ports
• Requires investment and efficiency gains
Port (Berth) Operator Type TEU/Year Area (Ha) Berth (m)
TEU/Ha
Yard
TEU/m
Berth
Existing Burnie
(Berth4)
Toll-ANL Ro-Ro 242,284 6 180 40,380 1345
Existing
Devonport
(Berth 2)
SeaRoad Ro-Ro 105,000 7 180 15,000 583
Existing Devonport
(Berth 1)
TT-Line Ro-Ro 95,000 2 115 47,500 825
Incremental –
Efficiency Gain
Devonport
(Berth 2)
SeaRoad Ro-Ro 177660 7 180 25380 825
Incremental –
New Berth
Burnie (Berth
5)
Toll-ANL Ro-Ro 161,520 4 115 40,380 825
TOTAL
781,500
Port of Melbourne Corporation - Port Development Strategy (Aug 2009) estimates Tasmanian trade of 793,000
TEU in 2025

19. 19
International Direct Call Container Ship
Service Burnie Bell Bay Sub-Total
less expected
transhipped
Total
Total plus 25%
empties
Weekly 11,688 12,695 24,383 8,046 16,337 20,421
Monthly 3,033 9,533 12,566 4,147 8,419 10,524
Total 14,721 22,228 36,949 12,193 24,756 30,945
Service Burnie Bell Bay Total (consolidated at one port)
Weekly service 234 353 586
Fortnightly 96 302 399
Monthly 209 655 864
• FY11/12 transhipments (TEUs) allocated to port of preference and frequency
• Available volumes (TEUs) per call by port by frequency
Notes:
• Services are mutually
exclusive
• 700-1000 TEU
required to attract
direct call service
Methodology
• Range of sources, including Port of Melbourne, Poulter 2013
• Paper and Zinc excluded, Aluminium included
• Split to service requirements – weekly, more than weekly
• Split between Burnie and Bell Bay (50/50) unless better approximation known
• Assume all product takes the same vessel

20. 20
Key observations: Supply chains
Supply chains
• Some very good/innovative
• Company specific
• Large companies do well
• Seasonality
• Empty containers
• Difficult export supply chain

21. 21
Key observations: Ports and shipping
Domestic
• High service model – RoRo vessels highly suited to trade
• One size fits all service provision
• High price
• Efficient port operations, sufficient port capacity
International
• Volume insufficient to support weekly/fortnightly direct calls
• Access to Port of Melbourne beneficial
Industry structure

22. 22
Suggested improvements
Domestic
Freight
Exporters
Cost
Service
Supply Chain - commodity
Supply Chain - system
Shipping capacity
Port capacity
Assistance
for export
Industry-
wide
planning
and
scheduling
Improve
industry
structure
Increase
shipping
services

23. 23
Tasmanian Integrated Freight Strategy
Desired Outcomes:
• Competition and choice
across Bass Strait and
Beyond
• Efficient Freight Gateways
• High-standard, responsive
land freight connections
• Delivering a single,
integrated freight system

24. 24
Subsequent Developments
• Port of Burnie
• Increased Shipping Capacity on Bass
Strait
• TT Line
• International Shipping from Bell Bay
• Tasmanian Freight Equalisation
Scheme
• Port Of Melbourne
• Midland Highway
• Rail
• Hobart Airport
• Freight Export Advisory Panel

25. 25
Mark Stone,
Aurecon
mark.stone@aurecongroup.com
+61 3 9975 3399
Thank You