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Be realistic about operational realities

03 Feb 2012
Melbourne is mulling plans for a network of dryports to ease capacity pressures

Melbourne is mulling plans for a network of dryports to ease capacity pressures

There is some evidence of ‘optimism bias’ in government support of inland terminals in the Netherlands, as well as in other European countries, says Jason Monios of TRI.

“Some people complain about terminals that have been built with government subsidy but end up not being used. In the 1990s, inland terminals/freight villages were springing up around this part of Europe [Netherlands/Germany], as it is the heart of the industrial zone. But not all of them had a solid enough market to survive the current economic climate.

"So there are some questions about the potential misalignment of public subsidy with market and operational realities.”

Whether logistics are located at the sea port or inland depends on the individual case, he says.

“In the case of Rotterdam, for example, there is not enough room and there are congestion issues, therefore it makes sense to move these non-core activities inland. However, the benefits to the port terminal operators need to be clarified before further investment is undertaken.”

Rail operators in Europe often struggle to make intermodal transport economically feasible due to short distances, he points out. In order to attract enough business to fill trains, many operators offer a door-to-door service, often rebranding themselves as logistics providers and taking more direct involvement in container management.

“The ECT example demonstrates how integration of operations between the sea port and the inland terminal, with regular shuttles managed jointly between the two locations, can boost demand and make the intermodal service economically competitive.”

Meanwhile down-under, Melbourne, Australia’s largest container port, is considering plans to set up a network of dryports to create more efficiency and ease capacity pressures.

Throughput at the port reached record levels in 2010, with containers increasing by 12.6% to 2.34m teu. A recent discussion paper, “Shaping Melbourne’s Freight Future”, predicted that volumes would reach 8m teu by 2035, with more than 80% of that expected to be heading through inner suburban Melbourne to and from locations within the metropolitan area.

The port is in the centre of the city, which is getting increasingly congested; the idea is to develop three rail and road-linked hubs around the fringes, for short-haul delivery.

“We are seeing the [dryport] concept as more about network efficiency, in the face of increasing urban road congestion, than port capacity per se,” says Mark Curry, director of freight policy, network planning and strategy in the Victoria Department of Transport’s logistics and marine division. “Melbourne’s capacity problems at this time relate more to physical berth length and immediate back-up land.”

A formal ‘market sounding’ process was conducted last year seeking interest in participation in trial operations and/or service start-up operations. “There was a good response to the process but the process confirmed that government funding would be required to see trial or start-up services,” says Mr Curry. “Due to budget constraints, such funding is unlikely to be available before 2013/14."

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Melbourne is mulling plans for a network of dryports to ease capacity pressures

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