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The boss of one of Australia's largest integrated providers of import and export logistics services is disappointed in the NSW government relaxing conditions at Sydney's Port Botany.
"We're pretty disappointed during this COVID period, in particular, the NSW government has been relaxing conditions around high-productivity vehicles (HPVs) and allowing AW trucks into Port Botany, really in total opposition of a NSW strategy of a modal shift from road to rail," Maurice James, managing director of Qube Holdings, told The Australian Financial Review National Infrastructure Summit on Wednesday.
NSW Ports CEO Marika Calfas, top left, Port of Melbourne CEO Brendan Bourke, bottom left,
Pacific National CEO Dean Dalla Valle, top right, Qube Holdings managing director Maurice James, bottom right and moderator David Marin-Guzman, right, at The Australian Financial Review Infrastructure Summit. Renee Nowytarger
"What we're seeing is more trucks, much bigger trucks on our roads, whilst another arm of government is supporting modal shift. We've seen a stagnation of rail volumes in Port Botany."
Dean Dalla Valle, CEO of rail freight business Pacific National, said while high-performance trucks had a role, it was "perverse" to say they could run through cities.
"We're making billions of dollars of investment at the same time we're basically changing policy which allows more trucks onto roads. You can't bet on both horses in the race and expect to win it; you've got to pick which is the most efficient form,” Mr Dalla Valle told the Summit.
"The interesting point I'd make there is, toll roads actually force the transfer of freight from road to rail. Only when a truck goes on a toll road does it pay its true capital cost for the road and the true maintenance cost.
"For instance, to get a truck from Port Botany to Western Sydney is $120 in tolls – that's what they have to pay for the building of the road, the maintenance of the infrastructure and the management of it. A truck pays about $60 to go to Melbourne, so who is paying the other part of that? No doubt the taxpayer and the ratepayers are."
Mr Dalla Valle argued government could not "invest in rail at the same time as continuing to allow longer, larger trucks on roads", suggesting it was counter-intuitive to building new roads to make transport more efficient for cars.
Supply chain rethinkMr James said COVID-19 had demonstrated the restrictions of the just-in-time supply chain.
"What's happened is importers in particular are balancing now between just -in-time supply chains and inventory and inventory management, and needing inventory to satisfy customer needs," he said.
"Combine that with online retailing, combine that with the movement to ordering online and very fast delivery to home, [and] the supply chains to our homes are going to change dramatically."
Toll managing director Thomas Knudsen agreed that COVID-19 had highlighted "previously unknown" limitations of supply chains.
"One of the areas that I think we have to rethink is very much the just-in-time supply chain," he said.
Border difficultiesMr Knudsen also said closed borders had created difficulties for the transportation and logistics company, with truck drivers waiting at borders for hours and struggling to get into rest areas.
"It's not worked as well as we could have hoped for. I think the different rules and regulations between the states have not been helpful for us, to be frank," he said.
Post-pandemic, companies would have to diversify and stop relying too much on one manufacturer or any single country, Mr Knudsen said.
The dependence on China is a risk for some importers in particular.
— Maurice James, Qube Holdings managing director
"The need for flexibility has increased dramatically."
The boom in online shopping was also driving demand for better "end-to-end visibility" and more agile supply chains, including automation, he said.
Qube's Mr James also warned of the risk of supply chain dependence on single countries.
"What we’re going to see in supply chains, partially linked to COVID and partially linked to the geopolitical situation between the US and China, is ... some movement of manufacturing out of China to different locations, so supply chains will change," he said.
"The dependence on China is a risk for some importers in particular so maybe multi-source rather than just from China, other countries or relocating manufacturing from China may change supply chains."
Mr James said industrial action by the Maritime Union of Australia at port operations around the country exacerbated delays caused by the pandemic, with all terminal operators entering enterprise agreement negotiations at a similar time.
Speaking on behalf of Patrick Terminals, of which Qube owns 50 per cent, Mr James while it was "part of normal protected industrial action related to enterprise bargain[ing] ... you'd have to ask the union why they did it all at similar times in a COVID environment".
"It did have an impact, we've seen delays around the country," he said. "My experience previously is those enterprise agreements with the operators occur at different times and the action occurs at different times.
"There's an arrangement that vessels that do get affected by industrial action get serviced at different terminals in a port. That didn't happen this time. The union made a point of not co-operating with that, that exacerbated the impact, particularly in Port Botany."
This article first appeared on www.afr.com
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