May 2014 - Freight and Logistics Council of Western Australia

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East West Freight Corridor
Trends
29 May 2014
FLC WA
THA
1
Study aim
To test the thesis that east-west
Australian freight volumes and growth
rates are being reduced by an increase
in north-south freight into WA
THA FLC WA
2
Study Approach
• Review of available data on east-west corridor freight
• Examination of observed new supply chain behaviour
in retail logistics sector
• Suggestions for improved freight analysis
THA FLC WA
3
Available data
• National data sources including BITRE, ABS
• Rail data from network operator
• Sea freight data from BITRE, port authorities
THA FLC WA
4
BITRE 2010
Interstate Freight in Australia
• estimated freight on interstate corridors 1972-2007
• disaggregated into separate modes
• forecasts freight to 2030
THA FLC WA
5
East West Freight Task
tonne kilometres
THA FLC WA
6
East West Freight Task
estimated and forecast growth rates
THA FLC WA
7
East West Rail Freight Task
• Brookfield can supply high level rail data
• Gross tonne kilometres and train counts
• Otherwise data confidential to customers
• No data available on the nature of the freight
THA FLC WA
8
East West Rail Freight Task
15%
Annual Growth Rate
10%
5%
0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
-5%
-10%
-15%
THA FLC WA
9
Sea Freight Data
• BITRE annual summary of Australian Sea Freight and
port activity
• Aggregated data, difficult to separate bulk from
general freight
• Container freight limited to containers carried under
coastal voyage permits
THA FLC WA
10
Available data limitations
• Some national time series data (ABS, BITRE etc)
available but highly aggregated and questionable
• Often rely on industry surveys
• Forecasts usually based on statistical techniques
rather than underlying analysis of freight generating
activity
• Lack of good modal data at industry segment level
(retail, manufacturing, food etc)
• Understanding container freight made complicated
by large empty container volumes
THA FLC WA
11
East-west freight understanding
• East-west volumes have grown strongly since 1970s
• Rail dominates land transport, but coastal sea freight
significant
• Volatile bulk minerals freight movements (especially
by sea) can disguise trends in general freight
(household and manufacturing)
THA FLC WA
12
Container Freight into Fremantle
• Trade data accumulated into broad industrial
groupings for last 10 years
• Full International imports 272,000 TEU, growing 9%
per year to 2013
• Full Coastal ‘imports’ 56,000 growing at 3.5%
• 2014 volumes estimated from ytd April
THA FLC WA
13
Import Freight
by country of origin (TEU)
THA FLC WA
14
Chinese imports growing
• High growth, especially in household goods
THA FLC WA
15
Australian imports static
•Trade fairly steady in recent years over a variety of commodities
THA FLC WA
16
East West Freight - best available estimates
Best estimates suggest modal split: 7% sea, 62% rail, 31% road
10,000
Interstate Tonnes (000's)
9,000
8,000
7,000
6,000
Sea
5,000
Rail
4,000
Road
3,000
2,000
1,000
2007
2008
2009
2010
2011
2012
2013
Data woefully inadequate to identify trends in general freight
THA FLC WA
17
Retail Supply Chain Trends
• Two sectors:
– Supermarkets and grocery
– Consumer goods
• Supermarket sector highly concentrated, Coles and
Woolworths controlling 73% sales (est 12k TEU pa)
• Consumer sector relies more heavily on imports and is
much more disaggregated (est 60k TEU pa)
Source THA,IBIS World G4111
THA FLC WA
18
Retail Study 1 – Kmart (Sydney)
• Example of increased dependence on imports
affecting supply chain
• 50,000sqm warehouse opened Eastern Creek 2003
• Receiving point for all NSW supplies
• Handles 400 TEU per week
• Large container storage space – long supply chain
• Low value high volume product
• WA supplied direct from overseas to local DC
• No significant interstate movements
THA FLC WA
19
Retail Study 2 - Target
• National Melbourne centred distribution model to 2013
• Replaced with regional DC model, increased imports,
potential for streamlining
• Malaysian hub packs store-specific containers from
various Asian sources
• Also imports from China and Bangladesh direct into
Fremantle
• Reduction in east-west freight movement
• CTI Logistics facility growing from 2000sqm to 30,000sqm
in 5 years
THA FLC WA
20
Target chain realignment
Target’s Supply Chain – 2013
Target’s Supply Chain – 2014
THA FLC WA
21
Retail study 3 – Supermarket Supply Chains
• Woolworths and Coles (73%) have large DC’s near
airport
• More local product than consumer goods
• Private labels imported and increasing (28%)
• Aldi (10%) opening DC at Jandakot
• Higher level of private label (imported) product
• IGA, part of Metcash group (hardware,
liquor,automotive)
• IGA have DCs but large proportion product
delivered direct to store by supplier
THA FLC WA
22
National Retail chain models
• Major retailers migrating to new large DCs in
logistics precincts in most cities, consolidating
smaller warehouses
• Greater reliance on imports, especially in
consumer goods
• National distribution models (based in Sydney
and Melbourne) being replace by regional
distribution by some major retailers
THA FLC WA
23
Supply Chain Findings
• Significant reorientation around Asian supply networks
for some if not all retailers
• Scale of Perth warrants move away from east coast DC
model
• Potential significant impact on land use in Forrestfield/
Hazlemere
• Volumes small in overall east-west context but growing
THA FLC WA
24
Freight data and analysis
improvements
• Seek systematic disaggregated data from Brookfield
Rail and rail operators
• Engage with major rail freight forwarders to
understand their customer bases and design a
qualitative long term survey re rail usage
• Use Fremantle Ports database to design a regular
reporting protocol on containerised commodities
• Seek engagement with local retail sector to
understand import v domestic supplier reliance
THA FLC WA
25
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