Innovation. The Australian Grain Supply Chain Jock Carter Churchill Fellow 2009 Executive Director Newcastle Agri Terminal
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1 Innovation The Australian Grain Supply Chain Jock Carter Churchill Fellow 2009 Executive Director Newcastle Agri Terminal
2 NAT
3 About NAT Based in Newcastle Australia completed ,000mt capacity 2000mtph rail, shiploading Panamax berth depth Independent terminal not involved in trading or exporting grain Significant industry support major shareholders are key grain exporters Promoting collaboration and innovation
4 Defining innovation Disruptive versus incremental innovation In the context of Port Development High Infrastructure Costs Long Lead Time Limited land Port is the cornerstone of the supply chain
5 Churchill Study 2009 Inspiration for NAT development Defining Short Haul Basis of NAT tyranny of distance misnomer Most freight moves less than 500kms Rail industry perception negative Focus coal / iron ore & intercapital future of rail AWB study back in miles to make rail viable
6 Importance of Short Haul Strong fundamental case for support Congested freight corridors & high density of population in east coast region in particular Labour / Fuel relative growth High relative farm to port cost in Australia Rail is no longer present or struggling in many of the short haul markets Why / What is holding the industry back? History of underinvestment, lack of innovation, poor labour practices, bureaucracy at all levels, poor road interfaces
7 Relevance of Nth America & Europe Nth America Short haul rail viability? Different market models Road rail interfaces and Innovations Europe Congested freight corridors Different geographies and history Separation of above-below rail Road rail interfaces and Innovations
8 US & Canada Vertical integration above/below rail Staggers Act Short line rail industry vibrant 550+ operators Enormous variation in size and operational configuration from mum and dad one loco shunting operators through to public companies Strong secondary market for rail assets Regulatory environment tailored to environment Service culture and community relationships
9 Brandt RTL
10 Transloading & Expressway
11 UK Success of privatisation Tailoring operations to environment - passenger and freight cohabitation Investment in technology Secondary market for assets Focus on road rail interface and customer service
12 Europe Success of co-operation across nations Common standards to enable interoperability Understanding of environmental and social impacts Secondary market for assets Focus on road rail interface in particular terminals Over 300 rail operators in Germany alone
13 Issues in Australia Lack of innovation and investment Lack of competition Regulatory burden Cultural separation of rail and road industries Lack of secondary market for rail assets Limited access to terminals
14 Why build a terminal? 2009 Industry Assumed Knowledge No rail capacity due to coal Grain industry cannot justify capital expenditure Already too much port capacity Newcastle grain future under a cloud New terminals cost >$100m Port must have upcountry assets
15 NAT Experience Established as cornerstone investment Drive supply chain efficiency Promote investment in rollingstock and upcounty infrastructure Business structure Independent Equity based Collaborative
16 Port Design Design Is this innovation? Leverage economies of scale Leverage global trends Construction Pre-assembly where possible Leverage equipment expertise
17 US Shuttle Train Loading
18 Eastern Europe - Romania
19 Port Construction Construction Pre-assembly where possible Leverage equipment expertise
20
21 Since NAT New port developments Upcountry expenditure and planning Focus on faster turnaround road and rail Investment in rolling stock & locomotives This has in effect answered the questions.
22 Opportunities for innovation Elimination of waste HML road productivity Rail Wagon capacity Train performance Weight and quality improvement
23 Key industry principles Leverage existing infrastructure Opportunities for collaboration Level playing field and consistent regulatory environment Market dynamics not always lowest price
24 Innovation is key to the future success
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