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9.0International Gateways 9.0 International gateways Summary 9.1 Snapshot • Sydney’s international gateways of Port Botany • Even with more freight and airport customers • All of NSW, (including the regions), relies on and Sydney Airport are considered together in this using the rail network, most travel to and from the containerised imports and exports of industrial section due to their close geographic proximity, gateways will remain by road. Major investment is and consumer goods moved through Port Botany. which has implications for the portside and landside needed to augment the existing roads that link to Sydney Airport’s status as Australia’s primary aviation infrastructure of each facility. Port Botany and Sydney Airport. The WestConnex hub benefits the whole state. scheme (refer Section 6) is Infrastructure NSW’s • Port Botany and Sydney Airport have plans to principal response to the transport challenges faced • Sydney’s international gateways are expected to accommodate much of the rapid growth forecast by Sydney’s International Gateways. grow strongly over the next 20 years. for container freight and air travel over the next 20 years. Achieving this primarily requires operational • Once Port Botany reaches capacity, (which is not • Passenger numbers at Sydney Airport are forecast reform to lift productivity, not major capital works. expected to happen during the timeframe of this to double from less than 40 million in 2010 to over 80 Strategy), it is planned for Port Kembla to become million in 2031. • The major infrastructure challenge that Sydney’s NSW’s supplementary container port. International Gateways face is to the landside • Sydney Ports forecasts container movements at Port infrastructure – the roads and railway lines – that • There is no immediate need for supplementary Botany to grow from around 2 million TEUs in 2011 to connect them within the metropolitan area and airport capacity in Sydney. The growth of 7 million TEUs in 2031. across NSW. Western Sydney suggests that there is a case • Rapid growth in demand for freight and air travel will for a passenger airport targeting this market by • Emphasis has been placed on getting more port impact on the landside infrastructure and land use the late 2020s. The RAAF Base Richmond could around the precinct. containers to move by rail, taking advantage of perform this role for a period while a new facility is available capacity on the rail network. This has under development. • Investment in both the State’s road and rail networks, proven challenging because road freight has including options for investment in intermodal freight been cheaper and more reliable for the short- terminals, will be needed but must recognise the haul journeys that make up most port container primary role of road in moving freight around Sydney. movements. The forthcoming opening of the Enfield Intermodal Terminal offers a test case for the short- • Supplementary airport capacity is not expected to be haul rail freight market in Sydney. needed until the late 2020s, at its earliest. Additional container port capacity is not needed until the 2030s • More can be done in the short term to improve on current forecasts. travel to the Port and Airport, including providing cheaper rail travel and better bus services to the airport, and investing in key road pinch points. Infrastructure NSW | State Infrastructure Strategy The solution Section 9 International gateways Page 118 9.2 Container freight Table 9.1 2010-11 Container volumes NSW 9.2.1 Features of the container freight trade Ports Imports Exports Total TEU Port Botany is principally a container port catering for Full Empty Total Full Empty Total Total 1 99 percent of NSW container movements . Container Port Botany 1,000,453 20,107 1,002,560 458,703 540,823 999,526 2,020,086 volumes in NSW are shown in Table 9.1. Other 2,219 8,243 10,462 11,523 506 12,029 22,491 The container trade is characterised by the excess of Source: Ports Australia. imports over exports. The main freight supply chain task in connection with Port Botany is the distribution of import containers within Sydney: in fact 98 percent Table 9.2 Container Terminal Port Productivity Comparison of import containers are destined for no further than Net Crane Rate Port TEU per berth Metre Yard Utilisation* 50 kilometres from the port gate2. It is this proximity (TEU/hour) to the market that provides Port Botany with its non- Sydney 26 834 19,708 replicable competitive advantage. Melbourne 29 1,146 27,576 The export trade is diverse and includes agricultural Hong Kong 36 2,661 107,9 97 produce and some mineral exports from regional NSW, and manufactured goods primarily from metropolitan Shanghai 35 2,061 45,135 NSW. In addition, the export of empty containers Source: BITRE (stored in container parks in the metropolitan area) is a * TEU per gross hectare of yard. significant task. 9.2.2 Portside infrastructure A feature of the container business is that growth is Maximising the potential of Port Botany will require an uplift continuing at a long term trend of more than twice GDP Port Botany container operations have operated as a in productivity. The productivity improvements flowing growth – averaging seven percent per annum over the past duopoly since establishment: the incumbent stevedores from reform in the late 1990s have not been sustained and 3 15 years . Container trade through Port Botany is forecast are Patrick (a subsidiary of Asciano) and DP World Port Botany lags behind international competitors. This to nearly quadruple by 2031, reaching over seven million (formerly P&O). A third terminal has recently been efficiency gap is illustrated in Table 9.2. TEUs4, up from two million TEUs in 20115. developed, which will be operated by Hutchison Ports starting in 2013. As Section 3 notes, Infrastructure NSW assumes that 1 Ports Australia 2011, Containerised Trade Statistics. through a combination of automation and more efficient 2 Sydney Ports Corporation 2011, Logistics Review 2010-11. With the development of the third terminal, Port Botany labour arrangements, Port Botany will be able to realise 3 NSW Government 2011, Port Botany and Sydney Airport Transport now has the portside infrastructure to move at lEast Improvement Program, submission to Infrastructure Australia. its potential throughput. On this basis, Port Botany will 4 TEU = Twenty-Foot Equivalent Unit. The unit of volume used by seven million TEUs per annum, based on Sydney Ports be able to handle Sydney’s container trade for at lEast the container freight industry, akin to a standard-sized container. Corporation estimates. 5 Sydney Ports Corporation 2011, The Future of Sydney Ports: A 30 year the next 20 years, and probably longer. Horizon. Infrastructure NSW | State Infrastructure Strategy The solution Section 9 International gateways Page 119 9.2.3 Landside infrastructure port rail yards, where containers can be handled multiple Corporation16 suggests that rail could be cost competitive 11 Container freight transport today times compared to a road equivalent . These reliability or cheaper than road freight for these movements The main infrastructure challenge for Port Botany challenges are a particular issue for time sensitive cargo. providing the following circumstances were met: is providing appropriate landside infrastructure for The situation on cost is more complex. It has been • volumes to increase substantially to gain distributing containers across Sydney. This requires road argued that road freight does not pay the full costs of the economies of scale and rail networks, plus supporting infrastructure such infrastructure it uses12, distorting the market against rail as empty container parks, intermodal terminals, truck freight. However, Infrastructure NSW is inclined to agree • portside handling movements to be reduced through marshalling facilities and buffer zones. with the Productivity Commission, which found limited terminal reconfiguration The vast majority of containers move by road. At present, price distortions between road and rail, (once registration • investment in intermodal terminal capacity, enabling the Port Botany container trade produces around costs and fuel charges were accounted for) in its 2006 rail to road transfer (and vice versa) 13 3,900 truck movements daily6. A large proportion of study into the issue. • investment in warehousing and empty container these trucks use the M5 corridor, where port-related Road transport has an inherent cost advantage for facilities close to these intermodal terminals. trucks are less than two percent7 of total traffic. short haul cargo. This is due to rail’s high fixed (but Much of the cost advantage that rail could Only 14 percent of container movements through low marginal) costs. In NSW, 85 percent of container potentially offer over road requires the creation of 14 Port Botany went by rail in 2011, compared with movements are within the metropolitan area . warehousing precincts to be developed around the 19 per cent in 20068. Less than half of paths on the Rail is cost competitive with road for journeys over intermodal terminal. existing rail line are utilised9. longer distances. This is illustrated in the case of The implications of this for Port Botany container freight Making rail competitive export container freight, a significant proportion of are discussed in section 9.5. The reason the market prefers road at present is which originates in Regional NSW. Rail already has a Conclusions because road transport is more flexible and more reliable 38 per cent share of export container freight, compared 15 There has been a strong emphasis on increasing the than rail, and, in most cases, less expensive. to a 15 percent share of import container freight . proportion of container freight that is moved by rail in Rail is poorly set up to accommodate much of the For short haul container movements where there is recent years. However, even under optimistic projections containerised freight task.
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