Port-centric logistics: International experience and relevance for Sydney

Professor Michael G H Bell, ITLS,

The University of Sydney Business School

Contents

› Principles of good city logistics

› Irony of containers on the road network

› Definition of port-centric logistics

› How port-centric logistics makes savings

› London Gateway

› Automation supports port-centric logistics

› Advantages and disadvantages of port-centric logistics

› Sydney and intermodal terminals

› Policy implications and conclusions

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Four principles of good city logistics

1. Goods should be moved in urban

areas by the most appropriate

vehicles, at the most appropriate

times, by the most appropriate

routes

2. Movement should be reduced to a

minimum compatible with providing

an efficient consumer response

3. Inventory should be reduced to a

minimum and held as far as

possible outside urban areas

4. Deliveries in urban areas should be

consolidated (follows from

principles 2 and 3)

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Trucks damage the road infrastructure

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Source: Sydney Ports Corp

What is port-centric logistics?

› Port-centric logistics “is the combination of various elements of the supply

chain centred around a port facility. It combines the port of entry with

warehouse, distribution, assembly and manufacturing buildings, with

various modes of transport including road, rail and sea in order to

maximise efficiencies in, and minimise the costs of, the supply chain from

origin to destination.” (www.londongateway.com)

› It facilitates “more effective supply-chain management by eliminating the

unnecessary handling and movement of goods through reducing the

primary and secondary trunk movements, improving time to market,

reducing inventories in transit and thus inventory levels, and resulting in

reduced supply chain costs and increased efficiencies, reduced

distribution costs, road miles and lower carbon outputs.”

(www.londongateway.com)

5

Conventional logistics

6

Port-centric logistics

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London Gateway master plan

8

Source: www.londongateway.com

London Gateway close to London

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Source: www.londongateway.com

Linked by road and rail …

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Source: www.londongateway.com

… to the rest of the UK

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Source: www.londongateway.com

Port technology supports port-centric logistics

› Move to automate container terminals

- Gate systems (Vehicle booking system, OCR)

- Automatic stacking cranes (24/7, all weather operation)

- Automatic guided vehicles, shuttle carriers, Autostrads (coming to Sydney)

- Twin-trolley ship-to-shore cranes

› Port-centric logistics opens up the possibility of extending the scope of

automation

- Horizontal transport to/from the logistics centre

- Tracking and tracing

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Automation at CTA, Hamburg

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Source: Hamburg Port Authority

Layout of CTA

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Source: Hamburg Port Authority

Twin-trolley STS crane

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Source: Hamburg Port Authority

AGV

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Source: Hamburg Port Authority

ASC

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Source: Hamburg Port Authority

Advantages of port-centric logistics

› Reduction of freight-km by removal of “triangulation”

› Rapid reuse of containers, less containers in circulation

› Containers off the road network

- No empty container traffic or empty container parks

- Lower weight, smaller, more appropriate trucks in circulation

- Less damage to the road infrastructure

- Reduced emissions, less noise in surrounding areas

› Logistic-centric ports

- Better coordination, tracking and tracing, etc.

- Value added services generating revenue and employment

- More stable revenue for the port

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Disadvantages of port-centric logistics

› Vertical integration can lead to market power

- Market power leads to inefficiency

- Need for competition

- Where competition infeasible, regulation

› Less stock in containers leading to less efficient consumer response?

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Port Botany in Sydney

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Source: Sydney Ports Corp

Growth in container throughput at Port Botany (TEUs p.a.)

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Source: Sydney Ports Corp

Moorebank IMT rendering

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Source: Australian Government

Other warehousing in the Moorebank area

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Source: Australian Government

Benefits of Moorebank IMT (Australian Government)

› 3,300 trucks a day off Sydney's roads between Port Botany and

Moorebank by shifting freight to rail – 1.2 million trucks per year from

2019/20 onwards

› $10 billion in economic benefits including reduced freight costs, reduced

traffic congestion, reduced traffic accidents and improved productivity

› Improved environmental outcomes, with less fuel used and less emissions

due to reduced road freight – trains generate fewer emissions and use

less fuel than trucks for each container moved

› An estimated 2,625 construction jobs for the port shuttle and interstate

terminals and a further 1,700 jobs for the south western Sydney region

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Policy implications for Sydney

› Collocation the key to successful IMTs

› Government policy stresses role of Moorebank as an IMT, but

- Sufficient space for collocation?

- 1.2m TEU pa => 24k TEU in the yard (14k TEU storage planned)

- TEU = 20 pallets = 20 m2 warehouse space

- 24k TEU unpacked = 480k m2 warehouse space = 1km x 0.5km

- Multi-story warehousing possible as in Hong Kong

› Policy nudges may help

- Low emission zone

- Truck routes

- Nighttime and/or daytime truck bans

- Container exclusion zone or bans

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Conclusions

› Port-centric logistic can significantly improve city logistics by reducing

- Freight-km

- Congestion

- Emissions

› Port-centric logistics can fit well with intermodal terminals provided

sufficient space for warehousing is provided

› Economic forces favour port-centric logistics, but can be supported by

demand management policies such as Low Emission Zones

› Port-centric logistics supports logistic-centric ports through automation of

movement, storage and tracking & tracing

› The environmental footprint of ports can be reduced too

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Thank you for your attention!