PORT OF NEWCASTLE –PLANNING FOR THE FUTURE

The Case for a Container Terminal at Newcastle Prof Roy Green, Chair, Port of Newcastle

THE BOX THAT CHANGED THE WORLD

“Although only a simple metal box, the container has transformed global trade… New research suggests that the container has been more of a driver of globalisation than all trade agreements in the past 50 years taken together”

- The Economist, May 2013 https://www.youtube.com/watch?v=0MUkgDIQdcM

Around 95% of the world’s non-bulk commodity trade is containerised, amounting to $4 trillion a year in sectors such as advanced manufacturing & agribusiness

Container trade is forecast to double in the next 20 years, with focus on ‘smart specialisation’ by agile enterprises in global markets & value chains

Australia’s export trade is largely commodity-based, led by coal & iron ore, with post-mining boom transition to a more sustainable, knowledge-based economy

Over 50% of containers leave empty from NSW, making ‘fresh air’ our largest non-bulk export & highlighting opportunity for new areas of competitive advantage

WILL THE BOX CHANGE AUSTRALIA?

PRECARIOUS FUTURE

NSW FREIGHT & PORT CHALLENGES

1.3 MILLION CONTAINERSTHROUGHPUT

CAPACITY

STAGE TWO:

Port Botany

• Currently 2.4m container movements a year, rising to over 5m a year by 2030

• Massive congestion across Sydney as more than 80% of containers transported by road

• Huge investment required in road & rail infrastructure, with $60-80 tolls adding to freight costs

• Transport can account for 30% of final cost of goods, with 2.5% productivity gains from port competition

Port of Newcastle

• Operating at 50% capacity & able to manage 2m container movements a year

• While 87% of container imports go to Sydney, only 36% end up in eastern Sydney with the rest to western Sydney & regional NSW, including 27% to Hunter & northern NSW

• Only 21% of container exports originate from eastern Sydney, with 22% from western Sydney, 18% from southern NSW & 38% from Hunter & northern NSW

NEWCASTLE MAYFIELD SITE

Starting with Newcastle’s ‘catchment’, this 80 hectare former BHP site could take 500,000 containers (TEUs) off Sydney roads & reduce NSW landside transport costs by at least $1.3bn

NEWCASTLE’S CATCHMENT AREA

Narrabri wheat Narrabri cotton

0%

18%

35%

53%

70%

Tamworth - Newcastle Narrabri - Newcastle Moree - Newcastle Dubbo - Newcastle Dubbo - Newcastle (vs.Port Kembla)

Newcastle - CentralCoast

Cost

Sav

ings

(%)

Origin and Destination

Newcastle Rail Savings vs Port Botany 640m 900m

1200m 1500m

[Train lengths in metres]

RAIL COST SAVINGS FOR EXPORTERS

Port of Newcastle has capacity to more than DOUBLE its operations of 4,500 vessel movements a year with a viable & competitive container terminal

It currently manages $24bn in trade value (167m tonnes), contributing over $1.8bn to NSW Gross State Product & 10,000 FTE jobs

GLOBAL GATEWAY FOR REGIONAL AUSTRALIA

REGIONAL DIVERSIFICATION• Natural catchment

is home to more than 27% of the State’s population

• Catchment encompassesadvanced manufacturing, renewable technologies, agribusiness

• Container terminal will cut transport costs by $200/TEU for regional exporters

STAGE ONE:350,000 CONTAINERS

THROUGHPUT CAPACITY

MORE COMPETITIVE NSW• NSW exporterscan benefit from transport cost savings of more than 30%

• 38% of NSW exports originate from Hunter region,but currently exported out of Sydney

• Grow & retain trade in NSW, rather than lose trade to other States

1.3 MILLION CONTAINERSTHROUGHPUT

CAPACITY

STAGE TWO:

TRANSFORMATION OF HUNTER & NSW ECONOMY

STAGE 3:2 MILLION

CONTAINERSTHROUGHPUT

CAPACITY

• Optimal freight & ports network, with dedicated rail infrastructure replacing trucks

• Effective & efficient movement of freight

• Reduced congestion & increasedproductivity

RAIL FREIGHT INFRASTRUCTUREIn medium to longer term, NSW will require investment in a new dedicated rail freight corridor between Newcastle & Port Kembla, with network of intermodals in western Sydney

This will further reduce freight costs, increase freight and ports efficiency & mitigate Sydney congestion, making some costly road & rail infrastructure projects unnecessary

NEWCASTLE 2022?