Jennifer Hall, Senior Logistics Analyst 19 December 2013

Background Trucking vital to Fremantle container supply chain Currently handles approx 85% of total Port volume Even if rail reaches 30% road volumes will increase Both truck numbers and efficiency are key issues Truck Survey measures of productivity have shown a stagnation since 2006 and decline over last 2 years Explanations for this based largely on speculation and anecdotal evidence A number of other issues need attention: VBS “Mad minute” Large number of carriers Orderly transition to 24x7

Developments since last report Series of Industry workshops Agreement on priority issues and actions Discussions with Stevedores Annual Truck Survey Review of 1-Stop and ContainerChain functionalities

Balancing competing interests Two-way loading Currently 43% for Precinct, 10% for Terminals Few carriers with balance of imports and exports Terminals prefer 1-way moves when under pressure Main gains likely to be through improved ECP/Terminal coordination Direct services vs staging/hubbing Direct services offer lowest cost Off peak services require depots/hubs Off peak operators (road and rail) free up slots for competitors Fremantle’s peak hour focus not sustainable Terminals concern with any reduction in direct services – smaller carriers unable to adjust Possible ACCC issues if introduce measures which change competitive balance.

Container trucks per 12 hour day Between 2002 and 2013: Trade growth (excluding tranship) has averaged 6.8% pa Truck numbers have grown by average of 5% pa

Truck Loading (Utilisation)

Container Traffic vs. Total Traffic 11% of all vehicles are now container trucks. In 2002, this figure was 5% 2% of all vehicles are now container trucks. In 2002, this figure was 1% Tydeman Rd Port Beach Rd

Container Trucks over the day 25% of trucks appear before 9am 75% of trucks appear before 3pm 94% of trucks appear before 6pm

Fremantle’s Daytime Dominance

Carrier Survey Findings Industry structure – carrier dominance Transport deport location, size and operating hours Truck and equipment fleet and utilisation Pattern of movements to/from Port Limitations on after hours operations Reasons for and location of staging Extent of and reasons for empty running Impacts of booking systems on productivity Views on improving productivity

Structure of Industry - Carriers Carrier numbers increasing in recent years – currently around 142 unique carriers (125 from 2011 Container Movement Study findings) Top 9 carriers handle 50% of total container volume Top 31 carriers handle 75% Top 55 carriers handle 90% Operating hours have been contracting back into daylight hours where trade volumes have not necessitated night operations

Carrier Utilisation Larger carriers, including on-port carriers, generally had higher truck utilisation (TEU/truck movement) to/from Container Terminals TEU per truck March 2013

Key Issues from Surveys & Workshops Terminals VBS “Mad minute" slot drop process Variability in servicing times (truck turn times) Large number of carriers affecting load consolidation Empty Container Parks Empty bulk runs conducted during peak day periods Mismatch of hours between ECPs and Terminals Level of flexibility versus strict business rules Transport carrier discipline Supply Chain Coordination Mismatch of hours between port operations and shippers Lack of equity between large and small carriers Coordinating bookings between VBS and ContainerChain Difficultly matching export receivals with import availability to achieve two- way loading Ability to influence/motivate road carriers and clients to undertake more movements off-peak

Agreed Priority Actions 1.VBS - Advanced Bookings Benefits: Reduces and potentially eliminates slot-drop process Rewards carriers that are better organised and able to plan movements earlier Could promote more 2-way loads Evaluation Required: See effects of implementation in Brisbane DPW terminal Determine proposed Business Rules and assess how well they deliver benefits and overcome issues Determine position of CTOs

Agreed Priority Actions 2. VBS - Carrier Classification Benefits: Provides a level of guaranteed access to terminals for a portion of carrier slots Facilitates improved fleet/equipment utilisation Provides a benefit to those operating 24/7 Evaluation Required: Determine proposed Business Rules Discuss benefits with carriers Stevedore preparedness to implement and development process Possible ACCC consultation

Agreed Priority Actions 3. Cooperative Staging Benefits: Saves many operators from having to book VBS slots and accessing terminals Reduced competition for terminal access, particularly at peak times Encourages efficient operators to conduct larger bulk run movements Facilitates move away from daylight hours Evaluation Required: Investigate willingness of larger operators to make facilities available and on what basis Address reluctance of carriers to enter into arrangements with competition

Agreed Priority Actions 4. ContainerChain Improved Compliance Benefits: Rewards those doing the right thing to encourage greater discipline Creates greater capacity to manage volumes into the future Improves ability to 2-way load to/from Port Precinct Evaluation Required: Evaluate current on-time performance Determine right balance between flexibility and compliance for carriers

Other Initiatives Improving understanding of existing systems Extension of ECP hours Promoting greater harmonisation of hours along the Chain Achieving better coordination between Terminal and ECP booking systems (single portal? Port Community System?)

Where to from here? Continue evaluations of priority initiatives (1 st quarter target) Quantify benefits where possible Getting some early wins Agree on best way to communicate with Industry Issue Bulletins to Industry to keep them informed Agree Program for implementation of agreed actions and tackling longer term issues

Questions? Doug BrindalJennifer Hall Manager LogisticsSenior Logistics Analyst P: P: E: E: