Patrick and port operator to spend $190 million over four years
NSW Ports is to invest $120 million to kick off ‘on-dock’ rail infrastructure capacity at Port Botany’s three container terminals, starting next year.
Investment will be staged, with stevedores being required to invest in rail operating equipment to meet target terminal capacities, the port operator says.
Stage 1 involves Patrick’s terminal with other stages aiming to deliver the same outcome at each of the DP Wold Australia and Hutchison terminals, in line with the port master plan.
To fund the investment, NSW Ports will implement, from July 1, a “modest increase” of $3.08 per TEU in wharfage fees on full imports and exports.
These are paid ultimately by cargo owners who are already exposed to the burden of increasing stevedore infrastructure surcharges.
“This has been spread over the long term to minimise the wharfage increase and will be removed once the cost of the investment has been recovered,” NSW Ports says.
The announcement comes about two years after Port Botany’s truck numbers began exceeding those servicing Port of Melbourne, the nation’s largest container port, and in the midst of a decline in Port Botany’s freight on rail rate that peaked in 2016-17 at around 17 per cent.
Stage 1 aims to double rail capacity from 750,000 for 1.5 million twenty-foot equivalent units (TEU) of containers.
Patrick terminal trains serviced are to rise from 16 to 32 a day, with a view to also covering regional cargo needs, while turnaround times at the four sidings are to see a 33 per cent turnaround time reduction through automated rail mounted gantries.
“The growth of containers on rail is a key objective in NSW Ports’ Masterplan, to cater for the growing trade needs of NSW Ports CEO Marika Calfas says.
“This investment will build greater rail capability at the port, supporting the Government’s investment in completing the Port Botany rail duplication and ongoing investments in large scale intermodal rail logistics centres at Enfield and Moorebank.
“Over the next four years, NSW Ports will invest $120 million on Stage 1 of this uplift to create new on-dock rail capacity at Patrick’s Port Botany Terminal.
“The new rail terminal will ultimately deliver 1 million TEU capacity.
“In time, NSW Ports will invest at the other two container terminals.
“Increasing rail capacity at the port means a faster, cheaper, more sustainable way for exporters and importers to get their product to market.”
NSW continues to pledge a boost to Port Botany rail. Read of the latest, here
NSW Ports highlights that the investment aims reduce the growth in truck movements around the port.
When fully operational, it is expected to reduce truck kilometres travelled in Sydney by at least 10 million per year.
This will save an estimated 2 million litres of diesel per year at least, said to be the equivalent to a net reduction of more than 5,400 tonnes a year in CO2 emissions.
Explaining the figures, a spokesperson tells ATN the 1 million TEU per year equates to a truck volume reduction of 900 trucks per day.
This is calculated using distance assumptions to end destinations based on our origin destination analysis that equates to 10 million kilometres per year.
“This could be higher if you assume trucks are travelling greater distances to/from the port in the future as industrial lands move west,” the spokesperson says.
“Patrick currently handles a large volume of rail based containers and is focused on growing and optimising our rail offering,” Patrick CEO Michael Jovicic says.
“NSW Ports’ investment in rail infrastructure will be accompanied by Patrick’s $70 million investment in operating equipment and systems to deliver 1 million TEU capacity.
“Our agreement with NSW Ports will significantly increase our terminal’s rail capacity and enhance productivity and efficiency in container movements at the port.”
Work will begin next year and is planned for completion by 2023. Rail operations at Patrick are expected to continue during the construction period.
The Australian Logistics Council (ALC) has welcomed today’s announcement by NSW Ports that it will invest up to $120 million over the next four years as the first phase of a major effort to enhance on-dock rail infrastructure capacity at Port Botany.
The initial works will commence at the Patrick facility in 2019, but will eventually include all three stevedoring terminals at Port Botany.
“Moving more freight via rail will be essential if Australia is to successfully meet its growing freight task and address road congestion around key port freight facilities,” ALC interim CEO Lachlan Benson says.
“Today’s announcement from NSW Ports should be welcomed by exporters and importers and their supply chain delivery partners alike, as this will allow them to get their goods to market more efficiently.
“The cost savings and efficiencies that will be unlocked by greater on-dock rail capacity will flow right through the supply chain, benefiting both producers and consumers.
“ALC has been a consistent advocate for greater investment in port rail capacity, and was especially pleased by the federal government’s decision to invest $400 million to duplicate the freight rail line at Port Botany and construct a passing loop at Cabramatta.
“Today’s announcement further builds on that investment, and will be a major boost for supply chain efficiency by ensuring that Port Botany is able to cater for the growth in key metropolitan intermodal facilities in Sydney, including the Enfield Intermodal Logistics Centre, the Cooks River Intermodal Terminal and the Moorebank Intermodal Terminal, which is due to come online in 2019.
“These significant investments in port rail capacity, coupled with further work by industry and Government to help increase rail window capacity at Port Botany, will help to ensure the NSW Government is able to meet its target of moving 28 per cent of freight at Port Botany by rail by 2021.
“ALC welcomes today’s announcement as one that will have a positive effect on national supply chain efficiency and safety in the years ahead, and will help deliver on key industry priorities being identified as work continues on developing the National Freight and Supply Chain Strategy.”