The Emerging opportunities for New Port Development Economic Reach Adrian Sammons

DEPARTMENT OF THE CHIEF MINISTER

The Emerging opportunities for New Port Development

Economic Reach

Adrian SammonsDirector AustralAsia Trade RouteDepartment of The Chief MinisterNorthern Territory Government of Australia


Economic reachThe Great Freight Task Standing Committee on Transport and Regional Services July 07

At a time of unprecedented prosperity and in the midst of an international resources boom, there could be no more potent images of lost opportunity, than the sight of queues of up to 50 vessels off three of our major bulk ports.


Economic reachSpatial Economics

Changing markets, newly commissioned competitive infrastructure, costs & technologies cause many existing ‘terminal’ sites to be no longer suitable. This applies particularly to rail and port terminals.



The importance of locations changes with fluctuations in:

TRADE

VOLUME GROWTH

COST OPPORTUNITIES



Spatial relationships between seaports are vital elements in competition

CENTRALITY

INTERMEDIACY


Economic reachSpatial Economics - Hinterlands

Hinterlands are often noted;

FUNDAMENTAL HINTERLAND

COMPETITIVE HINTERLAND

FORELANDS


A

B

C

HinterlandHinterland

Competition margin

Fundamental hinterlandD

ForelandForeland

Economic reach


Economic reachCase Study – Bulk cargo

Maritime shipping is dominated by bulk cargo, which roughly accounted for 69.6% of all the ton-miles shipped in 2005.


Economic reachCase Study – Rail activity


Economic reachCase Study – The Route Selection Process

The choice of linking one location to another, importantly, the path selected is part of a route selection process which respects a set of constraints.

R = f(min C : max E)

Route selection thus tries to find or use a path minimising costs and maximising efficiency.


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A BFriction of Distance

Transaction Costs

Shipment


Economic reachCase Study – Bulk commodity chain

Stockpilecenter

Port

Supplier Customer

Point-to-Point


SWL Exceeded


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Criteria Bulk MineralsBulk Minerals

Driving force minimising costs, maximising efficiency & reliability of supply

Mode of shipment Large output / economies of scale to offset inefficiencies

Flows Specialised with accumulated inertia

Terminals Dedicated / locational – proximity to mine & proximity to market

Markets Mass / World prices, inventory costs


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800km11 hrs to Adelaide

2112km28 hours to

Darwin


Economic reachCase Study – Bulk commodity chain

Adelaide / Dalian 5731 nm

Darwin / Dalian 3175 nm

Variance 2556 nm


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Bulk – mine to loadport Port 1 ~ $/T Port 2 ~ $/TMine crusher storage $3.30 $3.30Local delivery $4.40 $4.40Primary elevator $0.50 $0.50Rail Linehaul $5.50 $8.50Export terminal $0.50 $0.50Bulk ship stevedoring $2.50 $2.50Import terminal $2.00 $2.00Rail delivery $1.00 $1.00Sub Total (siding to ship) $56.00 $65.00Saving per tonne Total $9.00


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Bulk Handling Chain Port 1 ~days Port 2 ~ daysMine crusher storage Start StartDelivery to rail siding 1 1Rail delivery to stockpile 0.7 1.6Port stockpile reclaim 2 2Ship loading 3 3Bulk ship transit 18.5 10.2Import terminal 2 2Local delivery 1 1Final customer End EndTotal 28.2 18.8


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Bulk Handling Chain Port 1 ~ $/T Port 2 ~ $/TMine crusher storage Start StartMine to Australian loadport $56.00 $65.00Stockpile & shiploader $# $#Vessel charter hire $19.70 $10.80Product financing $5 $3Bulk ship transit $24 $13Import terminal $2 $2Local delivery $1 $1Final customer End EndTotal $107.70 $94.80



Thank you

Documents

The Emerging opportunities for New Port Development Economic Reach Adrian Sammons