The changing face of the terminal operator business

Discussion – David Greig

July 2007July 2007ACCC regulatory conferenceACCC regulatory conference

Slide Slide 22

European and Australian geography

EUROPE AUSTRALIA

Ports import and export Ports import or export

Inland economic activity Coastal economic activity

Population >300m Population 21m

Adjacent ports Separated ports

Alternative ports equidistant

A particular port is closest

Slide Slide 33

The main trades

Exports (minerals, grain…) from inland by rail to nearest port

• Usually a unique port, sometimes two (Vic/SA grain, Qld coal)

Imports shipped direct to each main (coastal) market

Coastal shipping limited to bulk commodities (petroleum, alumina, cement…) and Tasmania

Not much land bridging

Slide Slide 44

Land bridging

Adelaide-Melbourne for shipping frequency

Melbourne-Darwin didn’t happen

A blip of rail land bridging during a temporary shipping shortage

Some by transfer between ships

Generally uneconomic because of Australia’s geography

Slide Slide 55

Transport barriers to entry

Trucking close to perfect competition

No real barriers to coastal shipping

Ports

• physical barriers low – land available or reclaimable

• commercial barriers significant – need to enter 2 or 3 ports (Melbourne experience)

Logistics skills replicable

Rail entry barriers declining

Slide Slide 66

Rail entry barriers

Entry constrained by infrastructure capacity – train paths

Best paths taken – train length, time of day

However a major Auslink/ARTC upgrade is under way

• Many more long passing loops – and can keep adding – and improved signalling

• Much more capacity, for growth and new entrants

• Contrast with Europe

Slide Slide 77

Slide Slide 88

Mode choice

51%

26%

23%

Price Reliability Availability

Slide Slide 99

Mode performance 2004 – M to B

Road SeaRail

linehaulRail door to door

Relative price

0-20% above d-d

rail

20-40% below d-d

rail

30-45% below road

0-20% below road

Reliability 95% 90% 35-45% 35-45%

Availability 99% 10% 40-45% 40-45%

Transit time

21-27 hrs 3-3.5 days 36 hrs 42 hrs

Slide Slide 1010

Road and rail availability

0%

1%

2%

3%

4%

5%

6%

7%

8%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Time of day

% o

f T

ota

l de

pa

rtu

res

pe

r h

ou

r

24 hour distribution of truck departures

2009

departure

time from

customer

Current

departure

time from

customer

Slide Slide 1111

Rail market share

M-S

S-B

M-B inland

M-B coastal

Slide Slide 1212

Conclusions

Far less port choice than Europe

Far more port operator market share than Europe

However:

• ACCC => Toll/Asciano split

• Stevedoring somewhat contestable

Rest of the chain is becoming contestable.