Presentation toPresentation tobtre TRANSPORT COLLOQIUM 2006btre TRANSPORT COLLOQIUM 2006

Transport Reform, Competition and the Future

Andrew Davis

Development Director

P&O Ports, Australia

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LOWEST COST, ON TIME – EVERY TIME

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Five stevedores

Two stevedores

Enterprise employment

Salaried productivity

based enterprise

employment

Outcome

1990 2005

Price

Service

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O/S Waterline No 40Price and Productivity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1997 1999 2000 2001 2002 2003 2004 2005

Rev

enu

e R

ate

Red

uct

ion

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Sh

ip R

ate

(Co

nta

iner

s p

er h

ou

r)

Revenue Rate Ship Rate

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Principal Port International Container Growth (TEU'm)

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Brisbane

Sydney

Melbourne

Fremantle

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Port Demand and Capacity

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Brisbane Sydney Melbourne Fremantle

TE

U'm

Capacity (TEU'm) at Benchmark(1,700TEU/m)Capacity (TEU'm) at Benchmark(1,200TEU/m)Throughput (2005) TEU'm

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Future Volume v Capacity (TEU'm)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2005 2010 2015 2020 2025

East Coast Capacity(1,700TEU/m)

East Coast Capacity(1,200TEU/m)

East Coast Volume (8%)

East Coast Volume (6%)

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SydneyBrisbane

Melbourne

Fremantle Auckland

Port ElizabethCapeTown

Durban Richards BayMaputo

Colombo

Surabaya

Amamapare

Bangkok

Laem Chabang

ManilaMarivelesBatangas

Shekou

QingdaoTianjin

Vostochny

Mumbai

Mundra

Qasim

DerinceVancouver

Southampton

TilburyAntwerp

Corpus ChristiGalveston

HoustonBeaumont

Lake Charles

MiamiNew

Orleans

Gulfport

NorfolkBaton Rouge

BaltimorePhiladelphi

a

Camden

New York/New Jersey

Newport

BostonPortsmouth

PortlandSearsport

Buenos Aires

MarseilleLe Havre

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Meyrick & AssociatesMeyrick & Associates

• 1997-2001 West Swanson Terminal1997-2001 West Swanson Terminal• Capital increased 19%Capital increased 19%• Productivity increased 60%, total factor Productivity increased 60%, total factor

productivity increased 18%productivity increased 18%• Prices reduced by 10%Prices reduced by 10%• Shipping lines 67% of the “Productivity Dividend”Shipping lines 67% of the “Productivity Dividend”• Stevedoring employees 25% of the “Productivity Stevedoring employees 25% of the “Productivity

Dividend”Dividend”• P&O Ports 8% of the “Productivity Dividend”P&O Ports 8% of the “Productivity Dividend”

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Berth Occupancy(Average Four Terminal)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005

Ber

th O

ccu

pan

cy

0

500

1,000

1,500

2,000

2,500

Vo

lum

e (T

EU

'000

)

Volume (TEU'000) Average Berth Occupancy

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Port BotanyTerminal Capacity Benchmarks (TEU per m quay)

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

SPC Benchmark

P&O Potential

Twin lifting (10%)

Change in TEU:Ctr ratio

Equipping to 10 quay cranes

Current (Year to 31 Dec 2004)

TEU per m

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Terminal Capacity 2004 2025 % ChangePort Botany Existing FacilitiesOperational - Demand 1.3TEU'm 3.3TEU'm 151%Theoretical MaximumQuaylineAverage ship length 210m 250mAverage number ships at berth 9.2 7.8 (16)%TEU to unload / load 1,200TEU 1,700TEU 42%Number of cranes 12 20Crane spacing 162m 97mCranes per ship 1.3 2.6Unloading / loading task for each crane 925TEU 660TEU (29)%TEU: Container ratio 1.40 1.50 7%Task for each crane (unit moves) 661Ctr 440Ctr (33)%Task as reduced by twin lifting (10%) 661Ctr 400Ctr (39)%Service rate per crane 21 Ctr per hour 23 Ctr per hour 14%Total time taken 32 Hours 17 Hours (47)%

Maximum annual capacity 3.0TEU'm 6.8TEU'm 123%

OperationalUtilisation 43% 48%

TEU per m quayline 669TEU 1,680TEU 151%

1,942m

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Quayline Capacity Benchmarks (TEU per m)

0 500 1000 1500 2000 2500 3000 3500 4000 4500

Patrick RMG

Patrick Current Methods

Hutchison Port Holdings

Southampton 2003

Hong Kong Terminal 3 2003

NSICT 2003

LCIT 2003

P&O Potential Automated Technology

P&O Current Methods (Drewry)

SPC

GHD

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Response to Trade GrowthResponse to Trade Growth

NEW TECHNOLOGYNEW TECHNOLOGY

Systems

Automatic Stacking Cranes

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West Swanson Container Terminal – The Future

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Shipping Lines Freight Forwarders / Custom Agents

Rail Operators

6

Stevedores2

TruckingCompanies

250+

Importers / Exporters

40,000

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LOWEST COST, ON TIME – EVERY TIME