Improving Supply Chain Efficiency in the Freight Transport and Logistics Industry Michael Kilgariff, Managing Director, Australian Logistics Council Australian Airports Association National Convention 13 November 2012

ASIAN WHITE PAPER

• Australia’s large and rising freight task includes significant growth in the air freight sector.

• Asian White Paper stated air freight volumes are expected to double by 2025.

• Appropriate infrastructure – including airports - is essential to enabling cross-border trade and travel.

A RISING NATIONAL FREIGHT TASK

• International freight tonnage went from 700,000 tonnes (2008-09) to more than 820,000 tonnes (201-11) – an increase of 14 per cent.

• More than 650,000 tonnes of cargo pass through Sydney Airport each year

• By 2035, the airport will be dealing with more than 1.5 million tonnes of cargo each year.

FREIGHT MUST BE CONSIDERED ‘CORE BUSINESS’

• Freight is already considered core business for airlines, and so it should be for airports.

• Air freight facilities are the lynchpin between passenger and freight aircraft and road efficiency.

• Get the air freight facility and supporting infrastructure right.

• All airports are critical links in the supply chain.

ISSUES OF CONCERN TO THE INDUSTRY

• Transparency surrounding the imposition of fees and charges on freight operators at some airports.

• Businesses that support and provide vital aeronautical services at airports should be acknowledged as the primary users of the facilities.

• Objections to the “take it or leave it” approach by some airport operators.

• The ‘disconnect’ between airport planning and the needs of domestic and international freight services.

ISSUES OF CONCERN TO THE INDUSTRY

• Airports do not necessarily understand freight operators’ needs and vice versa. There needs to be: – Greater appreciation of the number and frequency

of vehicles needing airport access to support the domestic freight effort.

– Greater appreciation from airports about the key differences between domestic and international air freight environments.

– Less ‘shuffling’ of freight providers to extreme ends of the airports.

• Northern Lands example.

FIXING THE DISCONNECT

• The path to achieving a more sensible outcome is through better long term planning.

• Amend the Airports Act 1996 so that airport master plans provide specific details on plans to move freight long term.

• Consultation with industry must take place before the plan is made.

THE QUESTION OF CONGESTION

• Congestion affects all aviation stakeholders.

• Bottlenecks around all airports require greater government focus.

• Improvement is evident, for example Melbourne’s planned East West Link and Sydney’s proposed WestConnex project.

• However, more can be done…

A SECOND SYDNEY AIRPORT

• There is a clear need for a second airport in Sydney.

• The Joint Study on Aviation Capacity found:

‘Demand for freight services cannot be met at Sydney Airport if additional capacity could not be added by 2035.’

• ALC believes a second Sydney Airport would:

1) Reduce congestion at, and the corridors linking to, Sydney Airport; and

2) Add price competition to the Sydney Air Freight market.

• Tralee decision reinforces need to move on a second airport.

IN CONCLUSION

• Improving productivity and efficiency must be at the heart of decision making when it comes to freight.

• Freight must be considered core business for airports.

• It needs to be front of mind when it comes to government policy making.

• And part of long term planning of our cities, our transport links and our broader logistics infrastructure.

THANK YOU & QUESTIONS