portofgeelong-feasibilitydiscussionpaper

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Discussion paper

Relocating motor vehicle importingand exporting to the Port of Geelong

July 2011


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Photograph:Katrina Lawrence

References:

Port of Melbourne Corporation (PoMC) Port Development Strategy 2035

vision.PoMC, August 2009

Port of Melbourne CorporationWebb Dock West automotive

development industry engagement. PoMC, 26 August 2010

This publication is copyright. No part may be reproduced by any process

except in accordance with the provisions of theCopyright Act 1968

State of Victoria 2011

Authorised by the Victiorian Government, 121 Exhibition St, Melbourne

Victoria 3000

Printed by Impact Digital

If you would like to receive this publication in an accessible format,

such as large print or audio please telephone Public Affairs Branch,

Department of Transport on (03) 9655 6000

www.transport.vic.gov.au
http://www.transport.vic.gov.au/http://www.transport.vic.gov.au/


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1. Introduction ...............................................................................................................................4

2. Rationale and desired outcome ..............................................................................................6

3. The present situation ................................................................................................................8

4. Supply chain arrangements ..................................................................................................20

5. Forecasts .................................................................................................................................24

6. The Geelong proposal...........................................................................................................

26

7. Management and operational roles, responsibilities and issues .......................................32

8. Comparisons: Existing, Geelong and other Motor Vehicle Ports......................................36

9. Issues for response and comment .......................................................................................40

Abbreviations and definitions ..........................................................................................................42

Appendix ...........................................................................................................................................44

Contents


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4 II

1. Introduction

BackgroundMelbourne is Australias largest container and motor vehicle

trading port in terms of throughput tonnages and value

added to the Australian economy. It provides a major

contribution to the economic performance of the State and

Australia. The continued growth in Victorias import and

export trade performance through all major commercial ports

has placed pressure on available port infrastructure and

landside connections.

Maintenance of the efficiency of port and landside transport

links is a high Government priority, due to the economic

benefits from trading activities. Ongoing planning is required

to ensure facilities and capacity necessary to meet forecast

demand growth are available.

It has been widely accepted for some years that the Port

of Melbournes capacity to handle continued growth in

container volumes at Swanson Dock is limited, and that

capacity is likely to be exceeded in the period 2015 2020.

A variety of strategies to provide necessary port capacity

are under development by the Government. These includedevelopment of the Port of Hastings for container operations

in the longer term, conversion of all or part of Webb Dock

for the international container trade, consolidation of motor

vehicle trade at Webb Dock West or relocation from the Port

of Melbourne to the Port of Geelong.

Purpose of this Discussion PaperThe Victorian Government is conducting a detailed feasibility

study on the relocation of both the import and export of motor

vehicles from the Port of Melbourne to the Port of Geelong.

This discussion paper describes the current arrangements

for handling the motor vehicle trade through the Port of

Melbourne, proposes alternative arrangements for the Port of

Geelong and identifies key issues on which the Government

is seeking stakeholder input.

Stakeholder views and suggestions are seen as a critical input

to the feasibility study, to ensure that optimum arrangements

are identified and implemented in a timely manner.

It should be noted that there is no specific commitment to

implement the concepts or strategies outlined in this paper.

Rather, these are offered to identify issues that need to be

addressed and to provide a basis for meaningful discussions

with all relevant organisations.

IssuesThis Discussion Paper is seeking to elicit feedback from

stakeholders on strategic issues that need to be addressed

in order to assess the feasibility of the Port of Geelong to be

developed for the import/export automotive trade for Victoria.

Broad issues identified for stakeholder input include:

the impact on the cost and efficiency of the import/

export supply chain

the technical feasibility of the proposal

the port infrastructure and capital required

financing options

the competition regulatory and governance issues

the implications for long term port planning regional develop opportunities.

Detailed questions are included in Section 9 of this

Discussion Paper.


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Discussion paper Relocating motor vehicle importing and exporting to the Port of Geelong II 5

Process adopted and next stepsThe process adopted by the Department of Transport has

consisted of the following steps:

Review of the current arrangements, including constraints

and ability to accommodate future volumes.

Assessment of port arrangements that have beenestablished elsewhere.

Discussions and research with the motor vehicle industry

and other stakeholders.

Development and release of this Discussion Paper.

Other work currently underway assessing other aspects of

the proposal includes:

Assessment of the economic issues, as part of a triple

bottom line assessment to also consider social and

environmental dimensions.

Assessment of likely car carrier ship performance in

the Geelong Channel through dynamic modelling.

Assessment of road traffic and congestion issues, inGeelong, near the Port of Melbourne and on roads to

car compounds in Altona Laverton North.

Industry comments

and submissionsIndustry, other stakeholders and interested persons and

organisations are invited to provide submissions in response

to the questions outlined in Section 9. Submissions are

invited to reach the Department of Transport by Friday30 September 2011.

All submissions will be treated in confidence, and should

be marked Confidential. Submissions will be used to inform

departmental and government assessment of port and

associated arrangements for import and export of motor

vehicles in Victoria. Submissions should be sent to:

Mr Parry Serafim

Senior Policy Manager

Freight, Logistics and Marine Division,

Department of Transport

GPO Box 2797

Melbourne Vic 3001

Via email: [email protected]: (03) 9655 8923

The proposed next steps and desired timings are:

Timings

The proposed next steps and desired timings are: Timings TBC

Release of this Discussion Paper for comment July 2011

Closure for receipt of comments and submission 30 September 2011

Discussions and research with industry, stakeholders and respondents to thisDiscussion Paper

July October 2011

Compilation of Assessment and Recommended Strategy Paper for Government assessment November 2011

Government strategic decision making process December 2011 early 2012

Photographer: Katrina Lawrence
mailto:[email protected]:[email protected]


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6 II

2. Rationale anddesired outcome


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The government has clear policy drivers for this

project, including:

Tackling road congestion, particularly on Melbournes

freeways, arterial roads and port access roads.

Enhancing regional economic development.

Ensuring efficient automotive supply chains for exported

and imported vehicles.

Supporting local motor vehicle manufacturing.

The continuing growth in Melbournes containerised import

export task is placing pressure on facilities at Swanson Dock,

the ports only dedicated container handling facility, and on

landside connections.

Webb Dock has been identified as a potential additional

facility for international containers for many years, but

achieving this would require relocation of some or all shipping

trades and services currently located there, as summarised

in the Port of Melbourne Corporations (PoMC) 2035 Port

Development Strategy. This strategy proposed consolidation

of motor vehicle operations at Webb Dock West in the short

to medium term, and relocation of motor vehicles to other,unspecified, ports in the longer term.

This study into the feasibility of relocating the automotive

trade to the Port of Geelong is part of the governments

planning for the broader development of Melbourne and

Victorias commercial ports.

Photographer: Katrina Lawrence


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8 II

3. The present situation


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Existing facilities

Wharves and berths

The motor vehicle trade at the Port of Melbourne is

accommodated at:

Webb Dock East Berths 4 and 5

Webb Dock West Berth 2

Appleton Dock Berths B D

Webb Dock

Webb Dock East has a two berth automotive terminal

operated by Patrick, and Webb Dock West a single pontoon

berth terminal operated by Australian Amalgamated

Terminals (AAT). The Webb Dock East berths can

accommodate vessels up to 250 metre length overall (LOA)

and Webb Dock West up to 200 metre LOA. Webb Dock

berths also accommodate other cargoes, predominantly

break bulk. The PoMCs 2035 Port Development Strategy

states the total automotive terminal berth capacity as

nominally 2.5 berths. The Webb Dock West berth cannot

accommodate all classes of Roll-on Roll-off (RoRo) vessels

which call at the port.

Appleton Dock

Appleton Dock is a general cargo facility, with automotive

trade activities (including trucks and large vehicles

and equipment) making up around three quarters of

activity at Appleton Dock Berths B D. These berths can

accommodate vessels up to 264 metre LOA. The 2035 Port

Development Strategy has identified the Appleton Dock

precinct for short to medium term development as a general

cargo and coastal (Bass Strait) facility.

The overall arrangement of these facilities is shownin Figure 1.

The importance of the

automotive tradeThe automotive trade is a major sector in the Australian

economy. In 2008 09, it represented around $5.2 billion value

add to the economy, including around $3.6 billion in exports,

comprising $2.1 billion in motor vehicles and $1.5 billion incomponents. The automotive industry makes up around 5 per

cent of Australian manufacturing and employs around 60,000

people in motor vehicle and parts manufacturing. Since 2007

approximately $4.5 billion has been spent on research and

development and capital investment.

Around 60 per cent of the Australian manufacturing automotive

trade is located in Victoria, including Ford and Toyota

manufacturing plants. The Port of Melbourne handles more

motor vehicle imports and exports than any other Australian

port, with 316,475 imported and 112,518 exported motor

vehicles in 2010. This represented 93.2 per cent of Australias

exported motor vehicles and 32.7 per cent of imported

vehicles. Motor vehicles are the largest non containerised

commodity handled at the port, making up around 6.5 per centof revenue tonnes.


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10 II , , .

, , .

Port

Phillip

Yarra R

iver

0 0.5 1.0 km

BeaconsfieldPde

Lorimer St

Williamsto

wnRd

Williamsto

wnRd

DynonRd

FootscrayRd

WestGateFwy

South Kensington

Southern CrossFlinders Street

Flagstaff Parliament

Kensington

Newmarket

Middle

Foots

cray

Footscray

Flemington Bridge

Macaulay

North Melbourne

Melbourne CentralSeddon

Williamstown

Yarraville

Williamstown Beach

N

Cook

St

ToddRd

Salm

onSt

Appleton Dock

Webb Dock East

Webb Dock West


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Key aspects of activities at these berths (figure 1) are summarised below.

WharfBerths(1)

Tradesaccommodated

Maxdraught(m)

Max ship LOAaccommodated(m)

Onwharfarea(Ha)

PDIfacilityarea(Ha)

Totalarea(Ha)(1)

Terminaloperator

Storagecapacity(cars)

WebbDockEast

2

WD4E,WD5E

Motor vehicles,RoRo, breakbulk, general

11.9 m 250 m 5 ha 10 ha 15 ha Patrick 3,000 4,000

WebbDockWest

1

WD2W(pontoon)

Motor vehicles,RoRo

8.5 m 200 m 19.9 ha 3 ha 22.9 ha AAT 6,000 7,000

AppletonDock

3

ADB,ADC,ADD

Motor vehicles,RoRo, breakbulk, general

10.1 m 264 m 5.0 haopen

1.5 hashed

Nil 6 .5 ha POAGS 1,500

(1) Port of Melbourne Corporation (PoMC) states total facilities typically available for motor vehicle activities at Webb dock is 2.5 berths and 30 ha,after allowances for other trades.

Source: PoMC Operations Handbook Harbour Masters Directions October 2010 and discussions with motor vehicle services providers.


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12 II

Land used for motor vehicle import

export trade and services

Webb Dock

There is approximately 30 hectares of land used for motor

vehicle terminal and Pre Delivery Inspection (PDI) activities atWebb Dock, noting that terminal space is also used for break

bulk and other cargoes.

Appleton Dock

At Appleton Dock, approximately 6.5 hectares is available

for port terminal and interim cargo storage, including 1.5

hectares (15,000 metre2) in sheds. It is estimated that

automotive trade activities represent about three quarters of

usage of this space, but at times up to half the available area

can be occupied with other cargoes.

Off port land used

Several companies have other sites used for motor vehicle

storage, inspection, fitting of accessories and similar supply

chain functions for cars and light vehicles. These are all

in the Altona to Laverton North area in Melbournes west.

Companies include AutoNexus, Patrick AutoCare, PrixCar

and Toll AutoLogistics. Land area totals approximately 154

hectares over these four companies, including land yet to

be fully developed. There are also companies specialising

in providing similar services for trucks, buses, agricultural

machinery and other equipment.


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Motor vehicle and related trade volumes

Trade volumes for motor vehicle and related trades carried on RoRo vessels at the Port of Melbourne are summarised below,

showing actuals for 2010 supplied by PoMC.

Month

Imports ExportsImports +Exports

Cars(units)

Largevehicles

andequipment

(units)

Breakbulk (revtonnes)

Total (revtonnes)

Cars(units)

Largevehicles

andequipment

(units)

Breakbulk (revtonnes)

Total (revtonnes)

Total (revtonnes)

Jan 15,332 2,590 6,076 282,605 3,670 236 115 55,302 337,907

Feb 21,472 3,102 1,453 367,735 10,417 388 1 147,799 515,534

Mar 25,493 3,189 3,132 444,794 8,774 308 107 124,722 569,516

Apr 18,958 3,252 3,878 348,762 10,369 445 601 151,897 500,659

May 26,622 3,869 3,375 475,276 10,777 302 26 153,119 628,395

Jun 25,178 3,257 12,057 449,328 10,158 746 418 152,887 602,215

Jul 24,513 2,912 3,953 420,297 8,000 596 424 125,788 546,085

Aug 22,363 4,025 4,621 416,156 8,082 407 58 119,527 535,683

Sep 21,696 3,252 3,315 381,342 7,129 529 71 112,155 493,497

Oct 22,013 3,290 3,983 391,304 10,501 1,071 73 159,599 550,903

Nov 27,248 3,037 3,200 452,241 7,993 1,348 98 119,629 571,870

Dec 24,256 3,266 5,295 407,224 9,848 350 270 139,731 546,955

TOTAL(UNITS)

275,144 39,041 105,718 6,726

TOTAL(REV T)

3,581,596 1,201,128 54,338 4,837,064 1,352,433 207,461 2,260 1,562,155 6,399,219

% OFTOTAL(REV T)

74.04% 24.83% 1.12% 100% 86.57% 13.28% 0.14% 100%

Source: Port of Melbourne Corporation


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14 II

Overall, other break bulk volumes are small, making up 1.02 per cent of overall total revenue tonnes carried onPure Car Carrier (PCC) and Pure Car / Truck Carrier (PCTC) vessels, although 5.30 per cent at Appleton Dock.

Motor vehicle trade does not display major seasonal fluctuations, other than reductions in January, as shown

in the graphs of volumes per month for 2010.

Seasonality Import (Units)

Units

Jan Feb

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Cars (units)

Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Large vehicles and equipment (units)



Seasonality Exports (Units)

Units

Jan

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Cars (units)

Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Large vehicles and equipment (units)

Feb


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The patterns of car carrier ship calls to the Port of Melbourne in 2010 were as shown below

Berth

Wilhelmsen

ShipsService

Melbourne

InchcapeShipping

ServicesP/L

Melbourne

SeawayAgencies

P/L forHoegh

Autoliners

MitsuiO.S.K.

Lines(Australia)

Pty Ltd

NYK LINE(Australia)

Pty LtdK

Line

ANL

ContainerLine PTY

Ltd

SeawayAgencies

Pty LtdTotal

Visits

Total

HoursBerth

Occupied

Average

TimeAlongside

(hours)

WD4E 0 1 1 19 5 10 3 14 53 787.3 14.9

WD5E 0 7 0 73 30 22 23 21 176 2729.6 15.5

WebbDockEast Total

0 8 1 92 35 32 26 35 229 3516.9 15.5

WD2W 0 0 0 0 25 31 0 0 56 2422.9 43.3

WebbDockWest

Total

0 0 0 0 25 31 0 0 56 2422.9 43.3

APPB 1 0 0 0 0 0 0 0 1 9.4 9.4

APPC 1 0 0 0 0 0 0 0 1 28.5 28.5

APPD 61 0 0 0 0 0 0 0 61 1077.7 17.7

AppletonDockTotal

63 0 0 0 0 0 0 0 63 1115.5 17.7

TOTAL 63 8 1 92 60 63 26 35 348 7055.3 20.3



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16 II

Australian motor vehicle industry

The major sections of the Australian motor vehicle industry

involved with vehicle imports and exports are:

companies which import, manufacture locally and export

cars (Ford, Holden and Toyota for cars, and Iveco,

Kenworth, Mack and Volvo for heavy vehicles) companies which import vehicles manufactured overseas

various companies which provide logistics, transport and

related services for motor vehicles.

In addition, there are numerous retail sales and service

providers; companies which manufacture parts and

components for local and overseas vehicle manufacturers,

and others involved in accessories manufacture, supply

and other aspects of the industry.

Exporters

Toyota

In 2010, Toyota manufactured 119,455 vehicles in Australia,

of which 82,670 (69.2 per cent) were exported to over

11 overseas destinations.

Ford

Ford exported 3,654 locally manufactured Falcon and Territory

vehicles in 2010, mostly to New Zealand. Ford also exports

locally manufactured engines, components and parts, which

are containerised and exported through Swanson Dock, and

do not affect this study.

Holden

Holden exports locally manufactured vehicles through the

Port of Adelaide, and this is unlikely to change given Holdens

manufacturing plant location in Adelaide. In 2010, Flinders

Ports reported imports of cars totalling 44,346 units, and

exports of 8,257 units, and 18 calls to Port Adelaide by RoRoships. A small number of Holden vehicles are exported

through Melbourne, at the decision of the shipping line.

Nissan

Nissan has a component casting plant in Dandenong, which

exports parts to Nissan manufacturing plants overseas. These

exports are containerised and do not affect this assessment.

Trucks

Kenworth, Iveco, Mack and Volvo all manufacture trucks

in Australia. Kenworth and Iveco export small numbers

through Melbourne.

Importers

There a numerous motor vehicle importers operating in

Australia, including those also manufacturing vehicles in

Australia. A summary of 2010 figures are provided below,

and more detail is in the Appendix.

Major stakeholders


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2010 Motor Vehicle Imports

AUSTRALIA VICTORIA

Total Sales ImportedLocal

Manufacturer Total Sales ImportedLocal

Manufacturer

Toyota 214,718 177,940 36,778 51,841 41,003 10,838

Holden 132,923 73,561 59,362 39,477 19,750 19,727

Ford 95,284 45,111 50,173 32,120 13,162 18,958

Mazda 84,777 84,777 - 22,262 22,262 -

Hyundai 80,038 80,038 - 17,256 17,256 -

Nissan 62,676 62,676 - 18,719 18,719 -

Mitsubishi 62,496 62,496 - 14,718 14,718 -

Honda 40,375 40,375 - 12,848 12,848 -

Subaru 40,025 40,025 - 8,907 8,907 -

Volkswagon 38,016 38,016 - 11,832 11,832 -

Suzuki 24,789 24,789 - 5,927 5,927 -

Kia 23,848 23,848 - 6,061 6,061 -

Mercedez-Benz

22,329 22,329 - 8,610 8,610 -

BMW 17,993 17,993 - 6,208 6,208 -

Audi 12,900 12,900 - 3,678 3,678 -

Other Cars 58,853 58,853 - 15,431 15,431 -

Total All Cars 1,012,040 865,727 146,313 275,895 226,372 49,523

All Trucks 23,534 18,604 4,930 5,516 4,143 1,373

Total AllVehicles

1,035,574 884,331 151,243 281,411 230,515 50,896

Source: VFACTS, supplied by Federal Chamber of Automotive Industries


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18 II

The supply chain for imported motor vehicles broadly follows

the following steps:

Vehicles arrive on RoRo vessels.

They are driven off vessels by stevedores.

They are then placed in the immediate laydown area

at the wharf.

Inspection and local accessory fitment activities follow

referred to as Pre Delivery Inspections (PDI). The extent

and location of this varies according to importer

preferences. Typical locations and patterns include:

Minimal processing at the on wharf laydown

area, followed by transport on car carrier vehicles

to dealers.

Driving vehicles to an adjacent PDI processing site

at the wharf, followed by transport to dealer, or to an

off wharf storage site, on car carrier vehicles.

Transporting vehicles to an off wharf vehicle

processing and storage site in car carrier vehicles.

PDI processing or storage at this site can follow,

with distribution to dealers when required.

Which pattern is followed depends on the preferences of the

importer. In general, the greater the PDI activity scope, the

more likely it is to be undertaken at an off wharf location.

Heavy vehicles generally require more local activity, including

body building and fitting of specific features to meet end

user requirements. Some of these vehicles are driven to the

processing location, but most are carried on low loaders of

flat top trucks.

Arrangements for export vehicles are simpler, consisting of

vehicle transport to the export port in car carrier vehicles,

accumulation for export in shiploading priority order at a site

very close to the wharf, followed by ship loading.

Both import and export activities are performed by a number

of specialist service providers, outlined below. There are a

small number of service providers for most functions, and

most offer services for both import and export vehicles. The

services provided, the inter relationships and ownership

structures are complex and overlapping, with significant

vertical integration in some cases.

Terminal operator

Australian Amalgamated Terminals

Australian Amalgamated Terminals (AAT) provides multi user

terminal facilities designed for motor vehicles, roll-on roll-

off and general cargo at ports in Melbourne, Port Kembla,

Brisbane, Adelaide and Bell Bay (Tasmania). AAT is a company

established in 2002 as a 50/50 joint venture between Patrick

and P&O Ports. Since then, various takeovers and restructures

have resulted in AAT now being owned 50 per cent by Asciano

and 50 per cent by Qube and related interests.

Access to AAT facilities is provided on a non discriminatory

basis to stevedores holding licences to operate within their

terminals. Services provided by AAT include land and facilities

for motor vehicle and general cargo receipt, processing,

storage and despatch, Australian Customs approved systems

and procedures, and IT systems for tracking cargo. AAT has

a 22.9 hectare site at Webb Dock West, predominantly used

for interim storage of import vehicles and export vehicles

awaiting shipment, with capacity for 6,000 vehicles, including

3,400 under hail net. Some of this is subleased to PatrickAutoCare for PDI activities.

Stevedores

Patrick (Asciano)

Patrick, a division of Asciano, provides motor vehicle

stevedoring services through its Automotive, Bulk and

General Stevedoring Division at Webb Dock East and Webb

Dock West, and occasionally at Appleton Dock, as well as at

most other motor vehicle ports in Australia.

POAGS (Qube)

POAGS, part of Qube Logistics, provides automotive,bulk and general stevedoring at Appleton Dock Berths B, C,

and D, including motor vehicle and RoRo cargo handling,

bulk and Lift on-Lift off (LoLo) services for Wallenius

Wilhelmsen Logistics (WWL). It also provides services for

some shipping lines at Webb Dock West and occasionally

at Webb Dock East.

Motor vehicle supply chain overview


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Automotive service providers

Pre Delivery Inspection, storage

and similar services

There are a number of companies which provide a range of

logistics services to motor vehicle importers and exporters.

For importers, PDI services include on wharf terminalservices, off wharf storage, inspection, accessory fitting, and

transport to dealers and vehicle purchasers. For exporters,

these include receiving and accumulating consignments for

export. Typical storage densities are 500 vehicles per hectare

if all are accessible, and up to 650 per hectare if blockstacked

(first in, first out).

AutoNexus

AutoNexus operates from a site of approximately 24 hectares

in Altona, providing a wide range of vehicle logistics services.

AutoNexus customers include Subaru, Citroen, Fiat, Peugeot,

Proton, SsangYong and Volkswagen.

Car Compounds of AustraliaCar Compounds of Australia has a 2-3 hectare site at Webb

Dock East leased from Patrick Stevedores, where it provides

import vehicle services for Nissan and Renault. CCA was the

first company to establish on wharf PDI activities in Australia,

for Nissan at South Wharf in Melbourne.

Patrick AutoCare

Patrick AutoCare has a 10 hectare on wharf facility at Webb

Dock East, including under cover vehicle preparation facilities

and hail net storage. Patrick AutoCare also has approximately

40 hectares in Laverton, also with undercover vehicle

preparation facilities and storage under hail mesh.

Patrick AutoCare customers include Holden, Honda,Isuzu, Kia, Mitsubishi, Nissan, Renault, Saab, Skoda, Suzuki,

Toyota and Volkswagen. Patrick handles all of Toyotas

Completely Built Up (CBU) export vehicles

PrixCar

PrixCar has a 37.5 hectare site in Altona North used for

motor vehicle PDI processing and storage, most under hail

net. PrixCar manages a range of motor vehicle logistics

services for its customers, including transport from wharf,

PDI processing, storage and transport to dealer. PrixCar

outsources motor vehicle transport arrangements to others.PrixCar undertakes on wharf PDI processing at all other

Australian motor vehicle ports at which it operates: Port

Kembla, Brisbane, Fremantle and Adelaide. In Melbourne,

PrixCar provides services for vehicles imported through Webb

Dock West and Appleton Dock.

Toll AutoLogistics

Toll AutoLogistics has a 55 hectare site in Altona North,

providing services for Ford, Hyundai and Honda among

others. Toll AutoLogistics moved to Altona North from

Laverton in 2010, and some of its Altona site has yet to

be developed.

Car transporter companies

Car transporters have specialised trucks able to carry

between one and 10 average sized cars, although within

Victoria most are carried on semitrailers with capacity of six or

seven vehicles. Larger vehicles and mobile plant are generally

carried on flat top or drop deck semitrailers with rear ramps

for loading and unloading vehicles. Some of these companies

also offer relocation services for private owners of vehicles,

but these are generally regarded as separate market sectors.

There are many car carriers operating in Melbourne, the

largest include CEVA Logistics, Patrick AutoCare and Toll

AutoLogistics. The Patrick AutoCare and Toll AutoLogistics

carriers are part of these companies general automotive

services, providing a vertically integrated market offering.

CEVA Logistics

CEVA Logistics operates a fleet of 28 semitrailers and car

carrying trucks in Victoria which move vehicles between the

Port of Melbourne, automotive service provider compounds

and dealers. Nationwide, CEVA operates around 200 car

carrying vehicles, including b-doubles and b-triples for

longer linehaul movements. CEVA also provides a variety of

other motor vehicle services, including storage, spare parts

warehousing, vehicle inventory management, relocation

of individual vehicles for private owners and transport of

components for local manufacturers.


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20 II

4. Supply chainarrangements


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Exported motor vehiclesThe supply chain for export motor vehicles consists of

transport from the production plant to export wharf, where

consignments are consolidated prior to shipment. Typically

exports are held up to 1.5 weeks, with weekly export sailings.

The overall process flow is shown below.

Toyota

Toyota is the largest vehicle exporter in Australia, exporting

113,000 vehicles from Webb Dock West in 2010. Export

vehicles are generally loaded onto the vessel which brings

imported Toyota cars from Thailand to Australia. Vehicles for

export are transported from Toyotas Altona manufacturing

plant to Webb Dock West, where around one quarter

have export accessories fitted before storage in the export

laydown area. Up to 1,800 vehicles can be stored on wharf

awaiting shipment. Vehicles are parked in the predetermined

shiploading priority order, enabling sequenced discharge at

various export destination ports.

Other

Ford exported 3,654 vehicles in 2010, mostly to New Zealand

through Webb Dock West. Holden exports a small number

of vehicles through Melbourne, at the decision of the

shipping line.

Production plant ShipConsolidation atexport wharfCar transport company Stevedore


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22 II

While the supply chains for imported motor vehicles

differ across importers, nearly all are based on the following

broad pattern:

1)Ship arrival at port.

2) Vehicle unloading from ship by stevedore vehicles are

driven off RoRo vessels by stevedores.

3) Vehicle placement in import laydown area next to the

wharf. Three days free storage on wharf is allowed.

Importers vary in the approach used for planning, priority

and grouping of vehicles in laydown areas.

4) PDI activities are undertaken before delivery to the dealer.

The extent of these activities can vary from condition

inspection only through to fitting of accessories that

can take several days. They can be undertaken at the

immediate wharf laydown area, at an adjacent PDI facility,

or at an off wharf PDI and storage facility.

The most common patterns are:

Some vehicles are transported direct to dealers

from the on wharf immediate laydown area after

inspection only.

Many importers relocate vehicles to on wharf PDI

areas for these PDI processes.

Many vehicles are transferred to off wharf PDI and

storage areas, mostly in Altona Laverton North.

5) Extended storage of some vehicles is required, generally if

importation rates exceed sales. These storage periods can

range from a few days to months.

6) Vehicles are loaded onto car transporter trucks for delivery

to dealers or vehicle purchaser. The size of the car

transport vehicle depends on the receiving capacity of the

delivery site, the number of cars in the delivery and the

potential to deliver multiple orders from the same vehicle

to nearby locations in the same trip.

Imported motor vehicles

Off wharfsite

Most

A few

A few only

Most

A few

About 60per cent

About 40per cent

Ship

On wharfPDI

Off wharfPDI

Wharf stack(terminaloperator)

Dealer

Dealer

DealerDealer

Dealer

Storage

Storage


23/48


BairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdaleBairnsdale

Ballarat

BallaratBallarat

Ballarat

MelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourneMelbourne

TraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgonTraralgon Sale

Morwell

Warragul

Horsham

Geelong

HamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamiltonHamilton

Swan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan HillSwan Hill

MilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMilduraMildura

SheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonSheppartonShepparton

BendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigoBendigo

Vehicle DeliveriesEstimated volumes - Port of Melbourne to car dealerships

10,000 to 16,800 (3)

5,000 to 10,000 (12)

2,500 to 5,000 (14)

1,000 to 2,500 (15)

100 to 1,000 (21)

1 to 100 (25)

Regional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional VictoriaRegional Victoria

Warrnambool

Wangaratta

WodongaWodonga

Wangaratta

Horsham

ortlandortland

Current motor vehicle movement and distribution patterns

for import vehicles, based on all vehicle moves undertaken

by Patrick AutoCare and Toll AutoLogistics in 2010 include

the following:

60 per cent of vehicles are moved to off wharf

compounds, and almost 40 per cent of vehicles are

distributed direct from wharf to dealers. Over 75 per cent of vehicles are delivered to dealers

in the greater Melbourne area.

Around 21 per cent are delivered to Victorian

country locations.

Only a very small number of vehicles go to

interstate locations.

The map below shows the distribution patterns of vehicles

delivered to greater Melbourne postcodes.

Current vehicle movement and distribution patterns for import vehicles

PortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPortPort

ofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofofof



Metropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan MelbourneMetropolitan Melbourne


24/48

24 II

5. Forecasts

Ship typesShips involved in the automotive trade are sub categories

within the broad grouping of Roll on Roll off (RoRo)

vessels, equipped with ramps for cargo to be driven or

towed on and off. Ramps are most commonly at the stern,

designed for vessels to back up to a dock, and or on

the side, to dock with wharves parallel to the ship. RoRo

vessels designed specifically for motor vehicles generally

have side and stern ramps and are broadly considered in

two main categories:

Pure Car Carriers (PCC)which have ramps for

vehicles to be driven on and off and deck heights

of around 1.7 metre designed to accommodate the

maximum number of motor vehicles, SUVs and

similar vehicles.

Pure Car and Truck Carriers (PCTC)are similar but

have some internal deck sections with adjustable deck

height enabling loading of higher and heavier vehicles,

trucks, mobile plant and similar equipment. Maximum

deck height can be up to 6.57 metres.

There have been trends towards integration of cars, trucks

and in some cases break bulk cargoes on the car carrying

vessels. WWLs Appleton Dock operation caters for break

bulk cargoes towed or moved onto vessels along with

some traditional lift on lift off (LoLo) cargoes. Whether or

not this trend will continue is unclear, but has implications

for the design of wharves and shore based equipment.

Port of Melbourne data for 2010 estimates that 25 per cent

of car carrier volumes consisted of larger vehicles, plant

and equipment, and roll on roll off project cargoes.


25/48


Vehicle import and export forecastsThe forecasts for future motor vehicle, RoRo and related cargoes have been informed by number of sources, including motor

vehicle manufacturers, FCAI, PoMC and industry response to forecasts published by PoMC (2010). Compound Annual Growth

Rate (CAGR) shows the anticipated growth over the periods concerned.

Years

Import Export TotalCars CAGR Cars Cars

2010 316,000 - 113,000 405,000

2015 375,000 3.7 110,000 485,000

2020 472,000 3.7 110,000 582,000

2025 560,000 3.2 110,000 670,000

2035 790,000 3.0 110,000 900,000

2050 1,252,000 2.8 110,000 1,362,000

Sources: Port of Melbourne Corporation 2010 (Total and CAGR to 2035)

Federal Chamber of Automotive Industries and industry discussions (Exports)Study team (2050 CAGR and forecasts to align with long term strategic port planning)

One major issue in forecasting future volumes relates to the ongoing export of assembled (CBU) motor vehicles.

These forecasts assume ongoing local manufacturing at current levels.

Ship sizesPort requirements are heavily influenced by the size and draught drawn by the ships anticipated to call. It is generally agreed

that the average size of nearly all vessel classes is increasing. WWLs latest car carrying vessels, the MkV series, have entered

service in 2011 with 265 metre LOA.

POMC (2010) provided a forecast distribution for car carrier and RoRo vessels expected to call at the port. This has been

included in the table below. Industry comment suggested this was generally reasonable. Although some suggested that the

trends to larger vessels could occur sooner and to a greater extent than projected.

LengthTypicaldraught

Typicalbeam 2010 2015 2020 2025 2035 2050

(m) (m) (m) (% of car carrier ships calling at Melbourne)

< 191 5-8m 20-28 49 38 31 25 18 15

191-210 8.8 32.2 34 37 39 40 39 36

211-230 9.5 32.2 8 13 15 17 20 22

231-250 11.3 32.2 6 8 10 12 16 19

251-270 11.5 32.2 3 4 5 6 7 8

> 270 11.7 33 0 0 0 0 0 0

TOTAL 100 100 100 100 100 100

Source: Sinclair Knight Merz, based on Port of Melbourne Corporation (2010) and industry comments


26/48

26 II

6. The Geelong proposal


27/48


This Discussion Paper presents a single port development

proposal at the Port of Geelong*. The intention is to provide

a base for discussion and consideration of alternatives

or variations which may offer advantages, rather than a

fixed plan for acceptance or rejection. It is recognised that

relocation to Geelong represents an investment for the long

term, to provide a viable long term solution and certainty for

the industry.

Ownership of the Port of GeelongThe Port of Geelong was sold in 1996. This included title to

berths, port land, piers and a 99-year lease of the seabed

on which waterside structures stand. These assets are held

by The Port of Geelong Unit Trust, owned by Hastings Funds

Management, PREEF Asset Management and Asciano.

GeelongPort Pty Ltd (owned by Asciano) is the port operator.

The shipping channels are managed by the Victorian

Regional Channels Authority (VRCA), with GrainCorp

operating an independent pier, silos and bulk handling

equipment for the export of grain.

Stevedoring services at the port are contestable, with Patrick

Stevedores, POAGS and Transom Marine holding current

contracts at the port.

Other major port users and landowners in the vicinity of the

Port of Geelong include Shell, Incitec Pivot, Ford, Alcoa,

Midway, Terminals Pty Ltd, OneSteel, Cheetham Salt and

Omya Southern.

As part of this investigation, GeelongPort was invited to

develop a conceptual proposal to accommodate import

and export of CBU vehicles and associated commodities at

Geelong. The overall proposal presented here is drawn from

material provided by GeelongPort.

* The context of the Port of Geelong in this Discussion Paper refers

to the land and pier assets owned by the Port of Geelong Unit Trust.

Under the Port Management Act 1995, the Port of Geelong Unit Trust

is recognised as the manager of the Port of Geelong. As noted in

this Discussion Paper, there are other owners of land and pier assets

within the broader Port of Geelong.


28/48

28 II

Princes Highway

Area 12.8 ha

Area 311.5 ha

Area 23.2 ha

Hardstand Pavement

1B

ert

h2

70

m

Quay

line

PotentialFutureBerth

Area 47.3 ha

Hardstand Pavement

Corio Quay Road

Cowies Creek

CQNSh

ed

2

CQNShed3

Max

imumS

hip

Leng

th2

64

m

MaximumShipLength264m

ShipLen

gth264

m

S h i p

L e n

g t h

2 6 4 m

NDual Gauge Rail Line

Key

Underpass

Area 1 2.8 haArea 2 3.2 haArea 3 11.5 haArea 4 7.3 ha

TOTAL 24.8 ha

C

QN1

CQS1

CQS3

CQS4

Corio Quay Development Plan Motor Vehicle Trade


29/48


This conceptual proposal is for development of four

berths and adjacent land at Corio Quay, as illustrated

on page 28. This would include reclamation of an area to

the east of the existing berth at Corio Quay South. The

intention is to undertake the whole development as a single

project, with multiple stages possible based on relocation

timing. The development would include berths, pavement,

some building and utilities.

Berths

The plan provides for four berths each capable of

accommodating car carrying RoRo vessels of approximately

265 metre LOA with this based on the length of WWLs Mark

V PCTC. The proposal would see redevelopment of the

existing Corio Quay North berth 1 (CQN1) and Corio Quay

South berth 1 (CQS1). Two new outer berths, Corio Quay

South 3 and Corio Quay South 4 (CQS3 and CQS4), would

be developed as part of the reclamation of land to the east of

Corio Quay. CQN1 will not accommodate side ramps on PCC

and PCTC vessels.

Lascelles Wharf was not considered as it is believed the cartrade is incompatible with the existing fertiliser trades using

Lascelles and surrounding manufacturing industries.

Export Vehicle Area

The conceptual plan is to use Area 4 (7.3 hectares) adjacent

to the new berths for the consolidation and storage of export

vehicles. The area will be configured for common use. It is

expected that buildings for export PDI to the specification of

the customer will be provided.

Import Vehicle Areas

The conceptual plan is to use most of the 17.5 hectares of

Areas 1, 2 and 3 for the lay down of import vehicles. The area

will be configured for common use, with block stacking of

imported vehicles. The pavement will be constructed for light

vehicle traffic, with lanes of heavier pavement for transport

trucks. Appropriate shade cloth, buildings and other facilities

will be provided to the requirements of customers.

Area 3, which is separated from the berths by a rail l ine,

would be accessed via underpasses, as the site is several

metres higher than wharf level. These underpasses would

be sufficient to accommodate trucks and cars anticipated

to be landed at the facility. Some land would be required forentrances to these underpasses, slightly reducing the area

available for vehicle storage prior to trucking.

RoRo and Break bulk Cargo

Part of Areas 1 and 2, near the stern ramps, will be

constructed with heavy duty pavements. This will allow

for the lay down of RoRo and other break bulk cargos.

The existing area north of CQN1 will also be available on

a common user basis.

Overview


30/48

30 II

PDI areas

Over the longer term, the proposal to develop Corio Quay

at the Port of Geelong will not provide direct on wharf PDI

facilities for car importers. Adjacent off port land, west of

Corio Quay Road may be available to industry. The City of

Greater Geelong has also identified other industrial land in

the Heales Road precinct to the north of the port as potentialsites for PDI and interim car storage.

Road transport loading areas

Loading and unloading areas for transport trucks would be

provided within the general storage area.

Rail transport

Patrick AutoCare and Toll AutoLogistics use rail transport for

very small volumes of vehicles destined for Brisbane, Darwin

and Perth that are imported through the Port of Melbourne. At

present, these vehicles are roaded to South Dynon in purpose

designed containers for loading onto interstate trains. The Port

of Geelong is currently served by standard and broad gaugerail lines, including the main interstate line to Adelaide and

Perth. The option exists to utilise this network to move cars

to and from the Port of Geelong, however this has not been

investigated in detail as part of the feasibility study.

Gates and Amenities

It is anticipated that access to the facility, security, offices,

amenities and staff car park will be located at the south west

corner of Area 3.


31/48


Road connections

The Port of Geelong has reasonable standard road

connections to and from the Princes Freeway via Corio Quay

Road, Abery Road, Seabeach Parade, Lowe Street, Wharf

Road and Shell Parade. A route using the Princes Highway

is also viable. These routes provide access to Melbourne via

the West Gate Bridge or via Forest Road South for the HealesRoad industrial precinct. Abery Road is a relatively new road,

built to remove heavy vehicles from residential streets in

North Shore.

The Department of Transport, as part of the feasibility study

process, is working with VicRoads to carry out an assessment

of the impact of the car trade on the local road network and

the broader road network between Geelong and Melbourne.

Port of Geelong access channel

Ships access the Port of Geelong via the Geelong Channel, a

23 nautical mile (42.6 kilometre) east west channel branching

from the Port Phillip Channel. The Geelong Channel is the

responsibility of the Victorian Regional Channels Authority(VRCA), which maintains it at 12.3 metre minimum depth

and 120 metre width. By comparison, Port Phillip Channel is

minimum 14.3 metre deep and 180 metre wide. Ships with

draught to 11.7 metre are able to use Geelong Channel on

high tide. The channel is managed as a one way channel,

each ships passage taking typically 2.5 3 hours at average

speeds around 6 8 knots (11 15 kilometre per hour).

VRCA is currently undertaking modelling to assess the

likely performance of high sided ships such as car carriers

in the Geelong Channel in strong winds. The most common

strong winds in Port Phillip and Corio Bay are south westerly

and northerly, and pose risks to high sided ships by blowing

them off course, potentially into the sides of the shipping

channel. The channel is relatively narrow, but also steep

sided, with batters in the range 1:2 to 1:3.

Modelling to date suggests that 220 230 metre car carriers

can be safely brought to and from the port in winds up to

30 35 knots with two 85 t bollard pull rotor tugs per vessel.

Existing tugs at Melbourne and Geelong do not have the

necessary power or manoeuvrability to perform this role.

Rotor tugs have three propulsion sources and can move

sideways giving greater ability to control ships sideways

movements in high winds. Geelong port would normally

be closed to all shipping if winds exceeding 35 knots are

forecast. The next modelling task will examine the likely

performance of WWLs 265 metre Mk 5 car carriers in the

channel, and ability to safely berth and depart the port with

other berths occupied.

At present, ships heading to the Port of Geelong are met by a

Pilot outside Port Phillip Heads who guides the vessel through

the heads and the channels to the port. Ships are normally

met by one or more tugs near City Bend in the channel near

the Port of Geelong. The VRCA is currently undertaking

detailed analysis of all water side activities associated with

ship access and berthing in conjunction with the Port Phillip

Sea Pilots, shipping lines (WWL) and the Port of Gelong.

Preliminary results from the modelling indicate that new tugswould be required for this operation, and are likely to be

required for the full length of the Geelong Channel for some

ship arrivals and departures, depending on the ship and

prevailing conditions.

Regional Development

Drawing on 2010 data, the relocation of the automotive

import/export activity to the Port of Geelong would result in

the number of annual ships calls increasing from 630 to 975,

a 55 per cent increase in port activity. Apart from the direct

employment in car handling and PDI activities, the increased

ship visits would require increased agency and provisioning

services, and drive economic development in the region.


32/48

32 II

7. Management andoperational roles,responsibilitiesand issues


33/48


Ownership of the Port

of GeelongThe Port of Geelong is owned by The Port of Geelong

Unit Trust, of which Ports Pty Ltd is the trustee. The Port

of Geelong Unit Trust is jointly owned by Hastings Funds

Management (35 per cent), PREEF Asset Management(35 per cent) and Asciano (30 per cent). GeelongPort Pty

Ltd (100 per cent owned by Asciano) is the appointed

port operator.

Provision of the Geelong

motor vehicle facilityThere are a number of scenarios under which the Geelong

motor vehicle facility could be developed and managed,

and users charged for the facilities and services they use.

As can be seen from the developments planned, significant

investment will be required to create a modern motor

vehicle terminal comparable with others in Australia andoverseas. This underlines the importance of establishing

viable design, management and funding arrangements, to

provide a satisfactory outcome for the long term, and enable

investments to be amortised over the longer term.

A number of development and governance scenarios are

available for development and operation of the Port of

Geelong as a terminal for import/export:

1) The Port of Geelong develops the berths and

infrastructure and manages the facility on a common

user, open access basis.

2) An experienced motor vehicle terminal operator, such as

AAT, develops and manages the facility, with the Port ofGeelong as landlord.

3) An independent operator develops and manages

the facility, with the Port of Geelong as landlord. This

could include consortia with motor vehicle industry

participation, or other organisations involved in the import

export supply chain, such as shipping lines, stevedores,

PDI operators or others with interest and knowledge of

the issues involved.

Competition issuesA key issue for consideration is the potential competition

issues that may arise through Ascianos 30 per cent equity

stake in the assets of the Port of Geelong, Patricks role as

port operator, and the prominence of Patrick Stevedores

at the port.

Other motor vehicle ports have established arrangements

with specific companies to provide terminal services,

generally on an open access basis. AAT is the most

prominent of these, with terminal facility provider and operator

roles at Webb Dock West, Port Kembla, Fishermans Islands

and Bell Bay.

The distinguishing feature at these other ports is the

independent role held by the port corporations, asset

owners or leaseholders acting as overall port manager, trade

facilitator and setting the port charges paid by port users.

The Australian Competition and Consumer Commission (ACCC)

imposed conditions on AATs operations covering stevedoreaccess, price review and dispute resolution in December

2009. This arose from AATs application for authorisation

of arrangements, as part of the settlement of Federal Court

proceedings concerning anti-competitive agreements. The lack

of alternatives to AAT at some ports was a major underlying

consideration. The ACCC appointed an Independent Pricing

Expert to review pricing of regulated services.

Any proposed governance arrangements at the Port

of Geelong that may result in the establishment of a

management system that limits or reduces competition will

require individual approval from the ACCC, even if similar

arrangements have been previously approved elsewhere.

In the event there is a relocation of the existing facilities forimport and export of motor vehicles located in Melbourne,

consideration will need to be given to how access to

new terminal facilities will be provided to stevedores, PDI

operators and other relevant service providers and whether

there needs to be independent oversight to ensure a

competitive and efficient outcome. If there is a sole or small

number of operators of the terminal facility, potential issues

arise in relation to the service providers obtaining reasonable

terms and conditions of access to the facility in respect of

both price and non-price terms (for example, facility use

charges and licence application processes).


34/48

34 II

In relation to price terms, incentives could be put in place

to ensure the operator(s) does not price services at levels

substantially above the efficient costs of producing those

services. These may include making standard prices

publicly available, and providing the ability for prices to be

independently reviewed or increases regulated. In relation to

non-price terms, a process for an independent approval of

standard processes and procedures including time frames

could be introduced. A dispute resolution process may also

be necessary to ensure that access is efficiently obtained.

Further, if an operator of the terminal facility is related to a

service provider, protection against the operator sharing

confidential information of the service providers competitors

may be required. Any management of the potential access

issues must be balanced against the desired outcome of

increasing the efficiency of automotive supply chains.

Competition issues with

facility provision and

management optionsBased on discussion with the Port of Geelong, the two

key development approaches that will be considered for

the development of Corio Quay in response to hosting the

automotive trade are:

The Port of Geelong develops the berths and

infrastructure and manages the facility on a common

user, open access basis.

An independent operator develops and manages the

facility, with the Port of Geelong as landlord.

This section examines some of the competition and related

issues which could be relevant to the approaches for facility

development and management identified above.

1) The Port of Geelong develops the berthsand infrastructure and manages thefacility as a common user facility

Under this approach, the Port of Geelong would be

responsible for the provision of berthing facilities and

facility infrastructure for the stevedoring of ships,

Customs approved laydown area, short term vehiclestorage and sites for on-wharf processing. GeelongPort

would provide management and maintenance of the

facility including responsibility for security, lighting and

stevedoring equipment. Stevedores would be licensed

to load and unload vessels, and shipping lines would

engage the stevedore of choice to service their vessels.

On wharf PDI operators would lease directly from the

Port of Geelong. Off wharf PDI operators would make

their own land tenure arrangements.

Each stevedoring company would need to provide a

cargo management system, equipment, transit vehicles

and office requirements. GeelongPort may allocate a

laydown area to each stevedore or alternatively space

may be dynamically allocated based on shippingschedules and demand.

The issues which may be relevant in assessing this

option include:

The Port of Geelongs strategic position as landlord,

port operator through GeelongPort, sole supplier of

terminal services through Patricks and established

provider of a fully integrated supply chain solution

to the motor vehicle industry could require review

or oversight mechanisms to ensure the facility

operates as an open access, non discriminatory

facility and to ensure a cost effective outcome for

the automotive importers and exporters.

This could extend to a need to establish a robust

independent dispute resolution mechanism

that provides the port operator and its users an

efficient, timely, cost effective mechanism to resolve

disputes relating to facility charges, access terms

and conditions and any perceived lessening of

competition.

There would be a duplication of services and

equipment as each stevedore supplies its own

equipment, transit vans, IT systems and office

space, and undertakes a more active role in receipt

and delivery of vehicles and general cargo.


35/48


There is a greater general complexity of operations at

Victorian motor vehicle ports than in other states. This

arises from high import volumes, handling over 90 per

cent Victorian motor vehicle exports, greater numbers

of vessel movements and these vessels spending

more time alongside due to greater exchange volumes.

This creates a more complex environment in which to

establish a common user facility than at other motor

vehicle ports.

2) An independent operator develops andmanages the facility, with the Port ofGeelong as landlord

Under this scenario, the terminal operator would

have exclusive possession of the identified port land

for the term of its lease and agreement would be

reached between the parties setting out each partys

responsibility for the provision and maintenance of

infrastructure including berths and laydown area. This

approach was adopted when port facilities for motor

vehicles were constructed at Port Kembla to facilitate

the relocation of these activities from East Darling

Harbour, Glebe Island and Whites Bay, with AAT

appointed to the role.

Motor vehicle PDI operators seeking on wharf facilities

would need to lease land or enter into some form of

subtenant arrangement with the terminal operator.

Given the commonality of ownership among various

companies in the motor vehicle logistics field, this

could pose competition issues. Should AAT become

the terminal operator, this issue likely to be covered by

the Shareholder Agreement between AATs owners that

arms length transactions must apply in dealings

with related entities. This should result in fair market

rents being charged to related companies such

as Patrick AutoCare and PrixCar under AATs nondiscrimination policy.

Issues which require consideration include:

Consolidation and operation of a single terminal has

the potential to generate efficiencies which should

be shared by all port users.

However, sole supplier status can provide an

opportunity to price services above the recovery of

the efficient costs that could otherwise be chargedin a competitive environment.

The means of achieving transparency of pricing

policies and processes for port users to consult and

negotiate with landlord and terminal operator on

investment and pricing matters would need to be

defined. Ultimately the end user will pay fees and

charges to recover investments made in facilities

and operational costs incurred.

Access to an effective dispute resolution process for

price and non price related disputes would need to

be defined.

It is likely that the terminal operator would need to

seek ACCC authorisation, even if authorisation is

held for other locations.

The process for new entrant automotive stevedores

to gain fair access to terminal facilities may need to

be addressed.

The dispute resolution process would need to

consider the terminal operators market position and

shareholder and contractual relationships.

If the independent operator had limited motor

vehicle import export terminal experience, their

capacity and ability to develop and efficiently

manage an automotive and general cargo facility

would also need to be considered.


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36 II

8. Comparisons:existing, Geelong

and other motorvehicle ports


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This section compares the main attributes of the Geelong

proposal with the existing arrangements at Melbourne.

Average travel distance to and from Geelong compared with

the existing arrangements are a key consideration, and are

summarised below.

Journey Melbourne Geelong

Port to Altona LavertonNorth compounds

18 km 50 km

Port to postcodes receivingthe most vehicles (in total onethird of all vehicles delivered)

38 km 86 km

Port to postcodesreceiving next one third ofall vehicles delivered

64 km 115 km

Port to postcodes receivingfewest vehicles (last one thirdof all vehicles delivered)

172 km 211 km

Toyota Altona to port 11 km 57 km

Ford Broadmeadows to port 31 km 84 km

Source: VFACTS, supplied by Federal Chamber of Automotive Industries

Travel distance alone does not take into account travel time

and the impact of congestion, particularly in the long term

as the road network around the Port of Melbourne becomes

increasingly congested. The relocation of the automotive

trade to Port of Geelong has the potential to reduce the

number of trucks crossing the West Gate Bridge. For truck

movements associated with the first point of delivery for the

automotive industry, vehicle movements over the West Gate

Bridge may be reduced by up to 50 per cent. The possibility

of High Productivity Freight Vehicles designed specifically

for the automotive transport industry will also need to

be considered.


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38 II

Comparison of other main aspects of existing arrangements and the Geelong proposal with the other four main motor

vehicle ports are shown below.

Port

Issues

Melbourne

(existing)

Geelong

(proposal) Port Kembla Brisbane Fremantle Adelaide

Port landownership

PoMC Port of GeelongUnit Trust

Ports Pty Ltd(Trustee)

(30 % ownedby Asciano)

Port KemblaPort

Corporation

Q Port Holdings FremantlePorts

Flinders Ports

Type ofcompany

GovernmentTrading

Enterprise

Privateconsortium

GovernmentOwned

Corporation

Privateconsortium

GovernmentTrading

Enterprise

Privateconsortium

Port landmanager

PoMC Geelong PortPty Ltd

(100% owned

by Asciano)

PKPC Q Port Holdings FremantlePorts

Flinders Ports

Land planningresponsibility

DeptPlanning andCommunity

Development/Minister forPlanning

City of GreaterGeelong

PKPC PBPL formost Dept

Infrastructure &Planning for nonport related use

approvals

FremantlePorts (portrelated) /

WA PlanningCommission(commercial)

DevelopmentAssessmentCommission/

city of PortAdelaide

Enfield

Terminaloperator/s

AAT, Patrick TBD AAT AAT FremantlePorts

common userberths

AAT, FP

Stevedore/s Patrick,POAGS

TBD Patrick,POAGS

Patrick, POAGS Patrick,POAGS

Patrick,POAGS

On wharf PDIoperators

PatrickAutoCare

TBD AutoNexus,Patrick

AutoCare,PrixCar, Toll

AutoLogistics

Patrick, PrixCar PatrickAutoCare,

PrixCar

PatrickAutoCare

Motor vehiclesberths

Share 3 Webb(effectively

2.5)Share 3

Appleton

Ultimately 4 3-4 Share 3 + grainberth

2 BerthsVQ (E andH) (+NorthQuay berths

11/12)

2 + 1 shared


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Port

IssuesMelbourne(existing)

Geelong(proposal) Port Kembla Brisbane Fremantle Adelaide

Immediatelaydownland (ha)

30 ha (WD)5 ha (AD)

24.8 ha

20 ha 5 ha

11 ha (VQ)1.5 ha (NQ)

4 ha

Generalstorageland (ha)

13 ha 15 ha 8 ha

On wharf PDIland (ha)

20 ha 28 ha 4 ha

On wharfoverflow land

Nil TBD possibly nil

Nil 4 ha paved and4 ha unpaved

-

Near wharfland available

Site north ofWilliamstownRd may beavailable

12.6 haadjacent (TBC)

Substantialareas HealesRd (approx8 km away)

Underinvestigation

(KemblaGrange)

80 ha approxat Port West 8

km distant

- -

Free storageon wharf(working days)

3 TBD 3 3 4 3

Motor vehicleimports 2010(units)

316,465 - 283,000 225,000 100,000 44,346

Motor vehicleexports 2010(units)

112,518 - 0 0 0 8,257

Off wharf PDI

operators

AutoNexus,

PatrickAutoCare,PrixCar, Toll

AutoLogistics

May remain

similar tocurrent

Nil, but under

investigation

AutoNexus, Toll

AutoLogistics(both Hamilton)

Patrick

AutoCare,PrixCar

Patrick

AutoCareand PrixCar

(Wingfield) TollAutoLogistics

(3 sites)

Off wharf PDIland (ha)

154 ha total,all Altona-

Laverton North

May remainsimilar tocurrent

Nil, but underinvestigation

approx 15 ha 26 ha(airport)

Estimatetotal about15-20 ha

Generalindustryperception

Good facility Commentcurrently being

sought

Good facility At capacity expansion

nearby

Site too small most PDIoff wharf

Facilityadequate to

demand

Source: Department of Transport Project Team, from stakeholder discussions


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40 II

9. Issues for responseand comment


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The Department of Transport seeks your views on this proposal overall,and a number of specific issues that would be critical in establishingalternative arrangements for the motor vehicle trade that meet theneeds of stakeholders.

1) What do you consider are the essential issues and

requirements that must be met to achieve a successful

outcome from relocation to Geelong?

2) What impact do you expect moving the automotive

trade to Geelong will have on the overall supply chain

for motor vehicles, in terms of efficiency, operating cost,

and distribution patterns?

3) Do you think changes are likely in the scope and extent

of locally performed PDI activities? What about the

balance between on wharf and off wharf PDI and other

vehicle processing activities? What off wharf storage

areas in the vicinity of the Port of Geelong would be

suitable? What land requirements would be needed

at an area such as Heales Road?

4) How could the industry integrate rail into the

movement of cars between Geelong and Melbourne,

and to other locations?

5) What capacity requirements are needed at the Port

of Geelong to meet the needs of the industry into the

future? What is the required storage capacity for the

terminal for import and export vehicles in the short

term and out to 2050?

6) What would be the best way to relocate the automotive

trade to minimise impacts to key users? This could

include partial relocation to Geelong in the shorter

term with the balance transferring into the future,

consolidation at Webb Dock West initially and potentiallyother options.

7) What length of asset life should be used for amortisation

of capital expenditure required for this project? This

needs to consider alignment with likely asset life and

length of facility attractiveness to users.

8) What organisational, operational and governance

arrangements do you think would be the best for

the automotive industrys import and export needs

supporting relocation to Geelong?

9) Have you encountered any access issues with

motor vehicle terminal facilities in Australia? What

are the advantages and disadvantages of the current

arrangements in your experience? What changes

do you suggest?

10) What impacts would the relocation of the car trade to

Geelong have on operations at the Port of Melbourne,

in particular longer term port planning?

11) What impact will the relocation of the automotive tradeto Geelong have on General Stevedoring in Melbourne?

12) What potential does the relocation of the automotive

trade to the Port of Geelong have to generate direct

and indirect employment and economic development

in the region?

13) Do you consider that the vehicle volume forecasts

presented in this Discussion Paper are reasonable?

If not, what alternatives do you suggest?

14) Do you consider that the ship fleet size forecasts

summarised here are a sound base for motor vehicle,

roll on roll off and related trades port planning? If not,

what alternatives do you suggest?

15) Are there any other issues and matters you would liketo comment on as part of the feasibility study?


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42 II

Abbreviationsand definitions


43/48


AAT Australian Amalgamated Terminals

Break bulk Generally refers to non containerised cargo designed to be loaded and unloaded ontoships by crane, but some shipping lines also include cargoes loaded by externallypowered equipment such as forklifts and tow motors

CBU Completely Built Up refers to assembled motor vehicles

CEU Car Equivalent Unit

CKD Completely Knocked Down can refer to unassembled cars in parts

CQN Corio Quay North

CQS Corio Quay South

DOT Department of Transport (Victoria)

DPCD Department of Planning and Community Development

FCAI Federal Chamber of Automotive Industry

kn knot

LOA Length Over All (ship length)

LoLo Lift on Lift off refers to both non containerised cargo which is packed to be loaded andunloaded on ships with cranes, and vessels designed to be loaded and unloaded with cranes

PCC Pure Car Carrier RoRo ship designed to carry cars

PCTC Pure Car and Truck Carrier RoRo ship designed to carry cars and trucks (some deckshave higher clearance)

PDI Pre Delivery Inspection activities undertaken between unloading imported vehiclesfrom ship and delivery to dealer. Often includes fitting Australian legal requirements andaccessory fitting to meet specific end customer order requirements.

PoMC Port of Melbourne Corporation

Roll-on Roll-off Refers both to ships designed with ramps for wheeled vehicles to be driven on and off,and to wheeled cargo capable of being driving or towed onto and from vessels

RoRo Roll-on Roll-off (ship)

VRCA Victorian Regional Channels Authority (responsible for the Geelong shipping channel)

Wallenius Lines Swedish shipping line, co-owner of WWL

WDE Webb Dock East

WDW Webb Dock West

Wilh Wilhelmsen Holdings ASA Global maritime group, co-owner of WWL

WWH Wilh Wilhelmsen Holdings ASA

WWL Wallenius Wilhelmsen Logistics. A Norwegian/Swedish shipping line, established in 1999,co-owned by Wallenius lines and Wilh Wilhelmsen Holdings ASA.

Source: Department of Transport Project Team, from stakeholder discussions


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44 II

Appendix


45/48


Importers

2010

AUSTRALIA VICTORIA

Total Sales Imported

Local

Manufacturer Total Sales Imported

Local

Manufacturer

Total all makes 1,035,574 868,845 166,729 281,411 226,903 54,508

Toyota 214,718 177,940 36,778 51,841 41,003 10,838

Holden 132,923 73,561 59,362 39,477 19,750 19,727

Ford 95,284 45,111 50,173 32,120 13,162 18,958

Mazda 84,777 84,777 - 22,262 22,262 -

Hyundai 80,038 80,038 - 17,256 17,256 -

Nissan 62,676 62,676 - 18,719 18,719 -

Mitsubishi 62,496 62,496 - 14,718 14,718 -

Honda 40,375 40,375 - 12,848 12,848 -

Subaru 40,025 40,025 - 8,907 8,907 -

Volkswagon 38,016 38,016 - 11,832 11,832 -

Suzuki 24,789 24,789 - 5,927 5,927 -

Kia 23,848 23,848 - 6,061 6,061 -

Mercedez-Benz 22,329 22,329 - 8,610 8,610 -

BMW 17,993 17,993 - 6,208 6,208 -

Audi 12,900 12,900 - 3,678 3,678 -

Isuzu 7,378 7,378 - 1,579 1,579 -

Great Wall 6,690 6,690 - 994 994 -

Lexus 6,526 6,526 - 1,790 1,790 -

Jeep 5,975 5,975 - 1,435 1,435 -

Peugeot 5,649 5,649 - 1,746 1,746 -

Isuzu Ute 5,114 5,144 - 1,030 1,030 -

Volvo (car) 4,945 4,945 - 1,667 1,667 -

Land Rover 4,789 4,789 - 1,155 1,155 -

Hino 4,177 4,177 - 1,014 1,014 -

Mitsubishi Fuso 3,700 3,700 - 721 721 -

Mini 2,267 2,267 - 770 770 -


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46 II

2010

AUSTRALIA VICTORIA

Total Sales ImportedLocal

Manufacturer Total Sales ImportedLocal

Manufacturer

Kenworth 2,077 - 2,077 680 680

Dodge 1,917 1,917 - 555 555 -

Renault 1,907 1,907 - 833 833 -

Proton 1,898 1,898 - 327 327 -

Skoda 1,652 1,652 - 605 605 -

Citroen 1,603 1,603 - 273 273 -

Chrysler 1,464 1,464 - 468 468 -

Iveco 1,442 1,442 1,200 336 56 280

Fiat 1,363 1,363 - 451 451 -

Porsche 1,266 1,266 - 470 470 -

Ssang Yong 1,119 1,119 - 142 142 -

Volvo(commercial)

1,009 109 900 325 25 300

Alfa Romeo 914 914 - 179 179

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