Supply Chain Report - Logistics Association of Australia

Supply Chain Report
Logistics Association of Australia Ltd
www.laa.asn.au
1986-2011

S u p p l y C h a i n R e p o r t 2 0 1 0
Contents
Our Program Partners - Logistics Bureau Page 4-6
Section A: Economic Update Pages 7-14
Economic Overview Page 7-9
World’s GDP Growth
Australia’s GDP Growth
Australia’s GDP Growth by Sector
Contribution of Transportation and Storage Sectors
to Australia’s GDP
Change of Gross Product by Sector
Breakdown of Gross Product in Transport and Storage
Industry
Change of Gross Product in Transport and Storage
Sub-Sectors
Labour Force Page 9-10
Australia’s Labour Force
Australia’s Labour Force by Industry
Inflation Page 10
Inflation
Contribution to Annual Inflation by Product Group
Freight Volume Page 11-13
Australia’s Freight Volume
Australia’s International Trade Account (Excluding Services)
International Sea Freight: Volume and Value
Container Throughput at Australian Ports
Domestic Freight Task
Transport and Warehousing Cost Page 13-14
Transport and Warehousing Cost
Labour Cost
Fuel Cost
Industrial Rental Cost
Section B: Market Update Pages 15-21
Update on Climate Change Page 15
An Update on Climate Change
Greenhouse Gas Emissions Reduction Target
Industry Initiatives Highlights Page 16
Significant Mergers and Acquisitions Page 16
All Sectors
Transport and Logistics Sectors
Significant Infrastructure Programs Page 17-20
Australia’s Future Infrastructure
Significant Infrastructure Upgrade: Rail
Significant Infrastructure Upgrade: Road
Significant Infrastructure Upgrade: Ports and ICT
Warehouse Availability and Trends Page 20-21
Demand
Supply
Section C: Market Participants Page 22
Major Players in Integrated Logistics
Section D: Australian Industry Performance Page 23
International Logistics Performance Index
Total Business Inventory
Inventory to Sales Ratio
Section E: Employment and Training Page 24-25
Employment Level
Change of Job Vacancies
Employment by Gender
Employment by Age
Education and Training in Logistics
Section F: Regulatory Environment Page 26
Regulatory Reform - The Development
References Page 27
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S u p p l y C h a i n R e p o r t 2 0 1 0
Welcome
Welcome to the third edition of our Supply Chain Report: 2010, which aims to provide a definitive report on the
state of the logistics and supply chain industry in Australia.
The report is issued on an annual basis and is complimentary to all financial LAA members and Friends of the LAA,
and I am sure it will provide an invaluable resource for all industry professionals.
Undertaking to deliver this research report reflects our commitment to promoting logistics and supply chain
management practices, analysis and benchmarking for the benefit of the industry.
We would like to thank and congratulate our program partners Logistics Bureau. Under our agreement, Logistics Bureau provides
research content and analysis on its research findings once a year. This economic and market update defines market participants,
reviews Australian industry performance and includes findings on the employment environment, as well as training and the regulatory
environment.
Mike Owen
National President
For more information about the Supply Chain Report contact the LAA:
Tel: 1300 651 911
Email: admin@laa.asn.au
© “Supply Chain Report 2010” and supply chain report are copyrighted to the Logistics Association of Australia Ltd
Published February 2010.
1986-2011
www.laa.asn.au 3

S u p p l y C h a i n R e p o r t 2 0 1 0
Foreword
Logistics Bureau once again welcomes the opportunity of partnering with the LAA on this Supply Chain Report initiative for the benefit
of LAA members and the broader business community.
Undertaking to deliver this research report also reflects our commitment to promoting improved logistics and supply chain management
practices and providing appropriate benchmarking for the benefit of our industry.
In compiling this report, we would like to acknowledge the significant contributions made by a number of organisations that are fully
referenced at the end of the report. We would also like to personally thank and acknowledge the efforts of Dr Patcharee Boonyathan
of Logistics Bureau Asia for leading and completing this research.
We received very positive feedback and ideas from LAA members following our previous reports and we look forward to further ideas
that can be incorporated in the future.
We would just ask you to remember that when reading the report, the information included comes from a wide range of sources and
may not always fully align.
We have not attempted to interpret the data but rather present it to you to draw your own conclusions.
Happy reading.
Last thoughts
While we have not attempted to interpret the data in this report but rather present it for you to draw your own conclusions, we have
been asked to share some thoughts and views based on this report and my broader exposure to our industry.
I recently conducted a closed survey of a number of senior managers in some of our leading businesses here in Australia. I wanted to
get ‘inside their heads’ and understand some of the key Supply Chain and Logistics issues they are facing. The results were interesting
and not altogether surprising, and seem to fit well with some of the key aspects of this report.
The top two things that keep these managers awake at night are understandably maintaining customer service while, at the same time,
trying to reduce costs. Most businesses face the situation of trying to do more with less, and this is reflected in the report in areas such
as reducing inventory levels.
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S u p p l y C h a i n R e p o r t 2 0 1 0
Our Program Partners -
Logistics Bureau Continued
When it comes to the daily frustrations of these senior managers, finding quality staff rates very highly. This reflects the trend that we
have seen in our Supply Chain reports of an ageing workforce in our industry, one that is male dominated and in which industry-specific
tertiary education can still be improved and made more readily available.
As I continue to enjoy helping a broad range of organisations across our region improve their performance, the challenges that they
face are different and yet often seem similar.
• IBP or Integrated Business Planning, perhaps more commonly known as Sales and Operations Planning, is still a significant
opportunity for most organisations as they try to improve cross-functional communication and customer service, while at the same
time reducing costs.
• Technology is playing an ever-increasing role in not only the reduction of operating costs but in the provision essential cost and service
information, in real time where possible. Accessing accurate and timely information with which to make informed Supply Chain
decisions is still not that easy for many businesses. Easily accessible cost and service performance metrics are an essential tool
in the current environment.
• An environment of constant change is being experienced by many in our industry that requires more agile and flexible Supply
Chain solutions and service offerings, particularly for those businesses struggling to remain competitive against low cost imports
or internet-based sales. But it is also the changing regulatory and legislative landscape that provides a challenge, particularly when
a lack of harmonisation exists in some areas between States and the Commonwealth.
• Whilst I have touched on the need for improved staff training and education experienced by many organisations, a broader
awareness of Supply Chain management seems to be lacking across non Supply Chain functional areas. Perhaps this is also a
symptom of having to do more with less, but the consequences often manifest in poor decision-making at a senior level,
leading to higher-than-necessary costs, customer service impacts and waste.
I hope you enjoy reading this year’s Supply Chain Report and find it of value.
Rob O’Byrne
Group Managing Director
Logistics Bureau
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S u p p l y C h a i n R e p o r t 2 0 1 0
About Logistics Bureau
Logistics Bureau is a management consulting company established in 1997 that
is focused soley on Logistics and the Supply Chain. Logistics Bureau has offices in
Sydney, Melbourne, Singapore and Bangkok.
For businesses looking for increased competitive advantage, Logistics Bureau
provides direction and support in driving improved profitability, improved customer
service and increased Supply Chain flexibility.
LOGISTICS BUREAU SERVICES
Logistics Bureau provides a wide range of services as depicted here, from assisting in
developing Supply Chain strategies, right down to implementation. Our experience
covers a wide range of companies and industries.
We are very proud of the fact that our business is 100% demand-driven, with over 67%
being repeat business. This is a clear testament of the value delivered to our customers.
LOGISTICS BUREAU RESOURCES
With over 30 specialist consultants available, Logistics Bureau is large enough to handle
any Supply Chain and Logistics problem, but small enough to provide exceptional
service.
LOGISTICS BUREAU RESOURCES
The Logistics Bureau Group has now completed well over 1,000 customer projects
across 18 countries in our region, with most major industry groups being represented
in the customer base.
LOGISTICS BUREAU GROUP
The Logistics Bureau Group continues to expand in terms of services and geographic
reach, with new offices planned in Vietnam.
The Group now comprises Logistics Bureau, Logistics Bureau Asia and Benchmarking
Success.
Keep an eye on Benchmarking Success as it brings a range of new services to the
market in 2010/2011 as well as expanding its overseas services.
SUPPLY CHAIN STRATEGY
Business rationalisation (M&A)
Channel strategy
Regional planning
Supply chain synchronisation
Strategy alignment
Due diligence
Sustainability
SUPPLY CHAIN TACTICS
Business integration
Outsource/insource/offshore/onshore
Asset deployment
Technology evaluation
Infrastructure development
Retail/supplier alignment
Customer service and CPFR
Transport contract negotiation
SUPPLY CHAIN OPERATIONS
Sourcing/Procrurement
Sales & operations planning
Facility design
DC process improvement
Fleet utilisation
Integration/contract implementation
Technology implementation
Training
SUPPLY CHAIN OPTIMISATION
Cost to serve
Time to serve
Distribution network design
Functional audits
Customer contribution analysis
Supply Chain audit
Benchmarking
SUPPLY CHAIN EXECUTION
Project management
RESEARCH
Market research services
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S u p p l y C h a i n R e p o r t 2 0 1 0
Section A: Economic Update
World’s GDP Growth
• GDP figures estimated by the IMF show the first upward
growth in most parts of the world in 2010, reversing the
downward trend shown in 2008 and 2009.
• World economy growth was estimated at 4.8% in 2010, up
from a bottom of -0.6% in 2009.
• The annual growth is expected to continue at a similar pace in
2011 and 2012.
*Asean 5 comprises Indonesia, Thailand, Phillipines, Malaysia and Vietnam.
Source: International Monetary Fund [14]
Percent
15.0
13.0
11.0
9.0
7.0
5.0
3.0
1.0
-1.0
-3.0
-5.0
China
India
Asean-5*
Australia
Euro area
US
World
World and Selected Countries’ GDP Growth
China
India
Asean-5*
World
Australia
Euro area
US
Calendar Year
2007 2008 2009 2010e 2011e 2012e
14.2 9.6 9.1 10.5 9.6 9.5
9.9 6.4 5.7 9.7 8.4 8.0
6.3 4.7 1.7 6.6 5.4 5.6
4.8 2.2 1.2 3.0 3.5 3.5
1.9 0.0 -2.6 2.6 2.3 3.0
2.9 0.5 -4.1 1.7 1.5 1.8
5.3 2.8 -0.6 4.8 4.2 4.5
Australia’s GDP Growth
• Australia experienced a quarter-on-quarter growth of between
0.3-1.2% during the financial year 2009-2010, according to the
national accounts data.
• In terms of annual percentage change (change between June
Quarter 2009 and June Quarter 2010), the Australian economy
advanced 3.3%.
Percentage of Australia’s Gross Domestic Product (GDP) Growth
Quarter-on-Quarter from Quarter 4, 2007 to Quarter 2, 2009.
1.5%
1.0%
0.5%
Percentage of Australia’s GDP Growth (Quarter-on-Quarter)
0.0%
-0.5%
Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10
-1.0%
Jun 08
Sep 08
Dec 08
Mar 09
Jun 09
Sep 09
Dec 09
Mar 10
Jun 10
Growth
0.2%
0.4%
-0.7%
0.7%
0.5%
0.3%
1.0%
0.7%
1.2%
Percentage of Australia’s Gross Domestic Product (GDP) Growth
from Financial Year 2004-05 to 2009-10
6.0%
Percentage of Australia’s GDP Growth (2005-2010)
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
GDP
3.0%
2.6%
5.5%
2.3%
0.9%
3.3%
Source: ABS [1,2]
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S u p p l y C h a i n R e p o r t 2 0 1 0
Australia’s GDP Growth by Sector
• The major industries which contributed to Australia’s economy were the
Finance (10.80%) and Manufacturing Industries (9.21%).
• Transport and Storage is a significant industry, contributing 5.39% to the
country’s GDP in 2009-2010.
• It is widely recognised that the actual contribution of the transport and
storage industry is far greater than that recorded here.
• The industry is estimated to generate approximately a 14.5% share of the
country’s GDP if in-house operations are counted.
• Because of data unavailability, the report will mostly focus on the direct
activities of the industry.
GDP Contribution by Various Industry Sectors
(Jul 09 to Jun 10)
Industry Sector
% Contribution
Finance
Manufacturing
Construction
Mining
Health
Transport and Storage
Public Admin
Wholesale
Retail
Education
Real Estate
Agriculture
Electricity, Gas, Water Supply
Accom Cafe Restaurant
Others & Statistical Discrepancies
Total
9.95%
8.49%
6.98%
6.85%
5.82%
4.97%
4.97%
4.54%
4.50%
4.06%
3.05%
2.54%
2.40%
2.12%
28.75%
100%
Source: ABS [1]
Contribution of Transportation and Storage Sector to Australia’s GDP
• Over the years, the percentage contribution of
Transportation and Storage Industry to the country’s GDP
remains steady at approximately 5 per cent.
• The industry generated more than $60 billion to the
Australian economy in 2009-10.
Period
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
Contribution of Transport and Storage Sector to
Australia’s GDP (10 Years to 2009-10)
Transport and
Storage Gross
Value Added ($b)
43.7
45.1
47.8
49.4
52.3
53.9
57.0
60.1
59.5
60.8
GDP ($b)
928.5
964.1
994.6
1035.8
1065.2
1097.9
1139.3
1181.8
1195.7
1223.5
% Contribution of
Transport and
Storage to GDP
4.71%
4.68%
4.81%
4.77%
4.91%
4.91%
5.00%
5.08%
4.98%
4.97%
Source: ABS [1]
Change of Gross Product by Sector
• The figure shows the percentage change of gross
product by different industry sectors between June
Quarter 2009 and June Quarter 2010.
• As mentioned previously, the Australian economy
advanced 3.3% during the period.
• Health, Manufacturing, Transportation and
Storage, Construction, Real Estate, Mining and
Finance industries grew above the average
while Wholesale, Retail, Accommodation, Café,
Restaurant, Utility Supply and Other Industries
advanced below the average growth level.
15.0%
10.0%
5.0%
0.0%
-5.0%
Change of Gross Value Added (GVA) Product between
June Quarter 2009 and June Quarter 2010 by Sector
Percentage Change of Gross Products between Qtr2 2010 and Qtr 2 2009 by Sector
Construction, 9.4%
Manufacturing, 5.6% Mining, 5.2%
Health, 4.1% Real Estate, 3.8%
Transport and
Storage, 3.7%
Finance, 3.9%
Education, 2.0%
Other, 2.9% Agriculture, 3.0% Wholesale, 2.5%
Electricity, Gas, Water
Supply, 1.6% Retail, 1.0%
Public Admin, -1.6%
Accom, Cafe,
Restaurant, -3.4%
All Industry Growth
2009-10, 3.3%
-10.0%
Source: ABS [1,2]
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S u p p l y C h a i n R e p o r t 2 0 1 0
Breakdown of Gross Product in Transport and Storage Industry
• Service and Storage remains the largest contributor to the
overall industry, having a 46.5% share of the industry gross
product.
Gross Product Generated by Industry Sub-Sector
Gross Product Generated by Different Sectors in Transport
• Road Transport is the second largest contributor, generating
30.4% of the total industry gross product.
• Contribution of Rail and Pipeline sector and Air Transport
Sector to gross product in 2009-2010 were at 13.2% and
9.9% respectively.
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
Service and
Storage, 46.4%
Rail, Pipeline and
other, 13.5%
Air, 10.2%
Service and
Storage, 46.5%
Rail, Pipeline and
other, 13.2%
Air, 9.9%
20.0%
10.0%
Road, 29.9%
Road, 30.4%
0.0%
Jul 08-Jun 09 Jul 09-Jun 10
Source: ABS [1]
Change of Gross Product in Transport and Storage Sub-Sectors
• Transportation industry grew 3.7% in 2009-10 after a severe
contraction in 2008-9 of -7.5%.
• By focusing closely on the industry sub-sectors, we see that Road,
Air, and Rail, Pipeline and Other sectors have expanded at a higher
rate than the industry average.
• Storage and Services sub-sector, which is the largest sub-sector
within the Transportation industry, grew 2% in 2009-10.
6.0%
4.0%
2.0%
0.0%
Change of Gross Product between Year 2009-10
and Year 2008-09 within Transportation Industry
Percent Change of Gross Product by Different
Transportation Industry Sub-Sectors
Air, 4.4%
Rail, Pipeline, and
Road, 5.3%
Other, 5.0%
Storage and
Services, 2.0%
-2.0%
-4.0%
-6.0%
Air -5.1%
Rail, Pipeline, and
Other, -1.9%
Storage and
Services, -3.2%
-8.0%
Road, -7.5%
Source: ABS [1,2]
Australia’s Labour Force
• The improving economy resulted in an improvement of
employment figures. Between June 2009 and June 2010,
total employment rose more than 353,000, reducing the
rate of unemployment from 5.8 to 5.1%.
• Most jobs were gained in both full-time and part-time
employment, adding to the work force 201,600 F/T
employed persons and 151,700 P/T employed persons.
• These improved figures suggested the outlook was
somehow better than expected. At some point during the
tough period, the Organisation for Economic Cooperation
and Development (OECD) and the federal government
anticipated that Australian unemployment rates would
peak between 7.7-8.5% in 2010.
Labour Force, Australia, June 2010
Labour Force Australia June 2010 (Seasonally Adjusted)
Employment Change from June 09
June 10 June 09 Person Percent
F/T Employed Persons (’000)
P/T Employed Persons (’000)
Total Employed Persons (’000)
Unemployed Persons (’000)
Unemployment Rate (%)
7,794.7
3,306.0
11,100.7
598.4
5.1%
7,593.1
3,154.3
10,747.4
662.3
5.8%
201.6
151.7
353.3
-63.9
-
2.7%
4.8%
3.3%
-9.6%
0.7 pts
Source: ABS [19]
GDP ($m)
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S u p p l y C h a i n R e p o r t 2 0 1 0
Australia’s Labour Force by Industry
• While employment in almost every industry sector
increased, the employment in Manufacturing and
Transport and Storage industries weakened slightly.
• The number of persons employed in Transport and
Storage dropped from 579,000 to 571,000, a 1.4%
decrease from the previous quarter.
• This figure reflects only the direct employment within
the industry.
Note: Detailed Labour Force Australia is released
Quarterly by ABS.
Area
Healthcare
Retail
Construction
Manufacturing
Education
Professional, Scientific
Accom, Cafe, Restaurant
Public Administrative
Transport and Storage
Wholesale
Agriculture
Others
A Comparison of Employment by Industry between
August Quarter 2010 and August Quarter 2009
Share of Employment by Industry
August 2010
(‘000) Person Percent
1,273
11.3%
1,218
10.8%
1,014
9.0%
999
8.9%
871
7.8%
856
7.6%
733
6.5%
701
6.2%
571
5.1%
419
3.7%
377
3.4%
2,199
19.6%
August 2009
(‘000) Person Percent
1,229
11.3%
1,183
10.9%
996
9.2%
1,028
9.4%
815
7.5%
789
7.3%
711
6.5%
646
5.9%
579
5.3%
413
3.8%
366
3.4%
2,129
19.6%
Total
11,231
100.0%
10,886
100.0%
Source: ABS [19]
Inflation
• The annual rate of inflation rose slightly to 3.1% in June 2010.
A similar level was recorded for the Transportation Price Index
at 3.2% in the same period. ABS [6,7]
• It is clear that the transportation price index is heavily driven
by the fuel price and it influences the price index of almost all
product groups.
10.00%
8.00%
6.00%
Percentage Change of Consumer Price Index
June Quarter 2010 vs. June Quarter 2009
Percentage Change of Consumer Price Index from June Quarter 2009
to June Quarter 2010 for All Groups and Transport Group
4.00%
2.00%
0.00%
GDP ($m)
-2.00%
-4.00%
-6.00%
All Groups
Transport
-8.00%
All Groups
Transport
Mar
08
4.2%
6.8%
Source: ABS [6,7]
Jun
08
4.5%
6.9%
Sep
08
5.0%
8.7%
Dec
08
3.7%
-1.2%
Mar
09
2.5%
-4.6%
Jun
09
1.5%
-5.9%
Sep
09
1.3%
-5.1%
Dec
09
2.1%
1.2%
Mar
10
2.9%
4.1%
Jun
10
3.1%
3.2%
Contribution to Annual Inflation by Product Group
• The price rise in Alcohol and Tobacco, Housing, Education and Health product/
Service groups has contributed to the change in annual inflation in 2009-10.
• More specifically, last year we witnessed a higher price of tobacco, hospital and
medical services, and automotive fuel.
• For this period, a price fall was recorded in Domestic Travel Accommodation,
Computing Equipment, and Fruit and Vegetables. ABS[6]
Contribution to Annual Inflation by Product Group
All Groups
Financial and Insurance services
3.1%
3.9%
Education
5.7%
Recreation -0.6%
Communication -0.2%
Transportation
Health
3.2%
5.0%
Household contects and services
0.2%
Housing
5.8%
Clothing and footwear
-3.8%
Alcohol and tobacco
8.7%
Food
1.4%
Source: ABS [6,7]
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Jul 07
Sep 07
Nov 07
Jan 08
Mar 08
May 08
Jul 08
Sep 08
Nov 08
Jan 09
Mar 09
May 09
Jul 09
Sep 09
Nov 09
Jan 10
Mar 10
May 10
S u p p l y C h a i n R e p o r t 2 0 1 0
Australia’s Freight Volume
• At the time the report was written, freight volume data availability was limited, especially for international air freight
and domestic freight.
• In the area of international freight, we observe:
- The international trade accounts
- Available data on international sea freight; and
- Container throughput at Australian major ports.
• In the area of domestic freight, we look at:
- BITRE’s road freight task estimation; and
- BITRE’s interstate freight task estimation.
Australia’s International Trade Account (Excluding Services)
• In 2009-10, goods value of both export and import trades
fell almost 10% from the previous 12 months.
• When considering monthly trade accounts, trade value
started falling around the third quarter of 2008 and began to
recover in the second quarter of 2010.
• We expect that international sea freight and air freight
volume would follow the trend and appears in the international
trade account.
Australia’s International Trade Account
(Goods Only) 10 Years to 2009/2010
International Trade Account Balance on Goods
(Service Excluded)
2009-2010
Year
$Billion
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
-25.0
Monthly International Trade Account (Goods Only) 2007-2010
Goods Credit
Goods Debit
2008-2009
2007-2008*
2006-2007
2005-2006
2004-2005
2003-2004
2002-2003
Debit (Export)
2001-2002
Credit (Export)
2000-2001
-300 -200 -100 0 100 200 300
$Billion
Source: ABS [10]
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S u p p l y C h a i n R e p o r t 2 0 1 0
International Sea Freight: Volume and Value
• Total sea freight volume went up from 789.6 million
tonnes in 2007-08 to 834.8 million tonnes in 2008-09.
• There was a slight decline in import volume, down
from 83.8 million tonnes to 81.6 million tonnes.
• The export volume however rose 7% from the
previous year to 753.2 million tonnes, generating a
huge surplus in term of goods export value ($202.3
billion).
• The increase in export is driven mostly by bulk freight
products such as coal, coke and briquettes.
• International sea freight volume shown here
appears to conform with the trend presented in the
international account.
MT
900.0
800.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0.00
$Billion
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
2007-08
Import
International Sea Freight Volume and Value
(2007-2008, 2008-2009)
International Sea Freight Volume (Million Tonnes)
705.8 789.6 753.2 834.8
83.8 81.6
2007-08
Import
2007-08
Export
2007-08
Export
2007-08
Total
2007-08
Total
2008-09
Import
International Sea Freight Value ($Billion)
2008-09
Import
2008-09
Export
2008-09
Export
2008-09
Total
152.5 303.3 202.3 368.3
150.8 166.0
2008-09
Total
Source: BITRE [13]
Container Throughput at Australian Ports
• At the ports, the container throughput dropped in
2008-09 then increased in 2009-10.
• Port Botany in Sydney container throughput was up
8.1% to more than 1.9 million containers.
• At the Port of Melbourne, the volume was up 3.6%.
The port is handling more than 2.2 million containers
per year.
• The container throughput at these 4 major ports
represented approximately 90% of total containerised
sea freight at all Australian ports.
TEUs
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Port Throughput at Australian Four Major Ports
2007-10 (Total TEUs)
Container Throughput at Australian 4 Major Ports (TEUs)
2007-08
2008-09
2009-10
0
Port of
Melbourne
Port Botany
Port of
Brisbane
Port of
Fremantle
Percent Change of Total Container Throughput from the Previous Year
Port of
Melbourne
Port Botany
Port of
Brisbane
Port of
Fremantle
2008-09
-4.4%
0.2%
-5.4%
-1.9%
2009-10
3.6%
8.1%
2.9%
-2.2%
Source: Maritime Union of Australia [29]
www.laa.asn.au 12

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
S u p p l y C h a i n R e p o r t 2 0 1 0
Domestic Freight Task
• Road freight task growth is expected to remain
flat at about 190 billion tonne kilometres between
2008 to 2010 according to BITRE’s estimation,
which factored in an impact from the economic
downturn.
• Over the long term to 2020, road freight task is
estimated to grow about 3.7% year-on-year. Road
freight task in 2020 is expected to be 40% higher
than the current level. BITRE [9]
• BITRE estimated that interstate freight task in
Australia is at 108.9 billion tonne kilometres in
2010, up slightly from the earlier year.
Billion Tonnes Km
280.0
260.0
240.0
220.0
200.0
180.0
160.0
140.0
120.0
100.0
Domestic Freight Task
Road Freight Task (Actual and Forecast)
Road Freight Task Actual
Road Freight Task Estimate
Year
• The estimation suggests that interstate freight
task will grow approximately 4.6% year-on-year
to 2020. By this time interstate freight task is
expected to be 58% up from 2010.
Billion Tonnes Km
200.0
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Interstate Freight Task All Modes (Coastal, Rail and Road)
Interstate Freight Task Actual
Interstate Freight Task Estimate
Year
Source: BITRE [8,9]
Transport and Warehousing Cost
• Total costs of transport and warehousing business are mainly
influenced by fuel cost, wages, depreciation and rent, leaving
5.6% of profit on average. IBISWorld [11].
Cost Structure (Transport and Storage Industry)
Cost Structure of the Transport and Storage Industry 2009-10
.
24.8%
6.1%
6.1%
13.9%
5.6%
43.3%
100.0%
Purchase Wages Depreciation
Rent
Utilities,
Interest,
Other
Total
Profit
Source: IBISWorld [11]
www.laa.asn.au 13

S u p p l y C h a i n R e p o r t 2 0 1 0
Labour Cost
• Labour cost in the Transport and Storage sector increased by
3.2% in 2009-10.
• The rate of increase was similar to the country’s average rise
across all sectors of 3.1%.
• The 2009-10 annual increase of labour cost in Transport and
Storage is the smallest increase in the past 5 years.
Change of Labour Price Index
(All Sectors vs. Transport and Storage)
Percentage Change of Labour Price Index for All Sectors and Transport Sector
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
All Sectors
Transport
0.5%
0.0%
2000/
2001
All Sectors
Transport
Source: ABS [30]
3.7%
3.2%
2001/
2002
3.2%
2.4%
2002/
2003
3.5%
3.3%
2003/
2004
3.5%
3.1%
2004/
2005
4.1%
3.2%
2005/
2006
4.2%
4.3%
2006/
2007
4.0%
4.1%
2007/
2008
4.3%
3.9%
2008/
2009
3.7%
4.4%
2009/
2010
3.1%
3.2%
Fuel Cost
• The strengthening sign of economic
recovery has gradually added the pressure
on fuel prices.
200.0
Cents
Average Monthly Fuel Price (Unleaded and Diesel)
July 2001 to June 2010
• It is expected that the average fuel price
will trend upwards and remain volatile. The
industry should expect to respond to the
impact of an unprecedented rise and fall of
fuel prices.
• The strength of the Australian dollar plays
a role in limiting petrol price increase.
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
Diesel
Unleaded
20.0
0.0
Period
Source: AAA
Jul
-01
Jan
-02
Jul
-02
Jan
-03
Jul
-03
Jan
-04
Jul
-04
Jan
-05
Jul
-05
Jan
-06
Jul
-06
Jan
-07
Jul
-07
Jan
-08
Jul
-08
Jan
-09
Jul
-09
Jan
-10
Jul
-10
Industrial Rental Cost
• During the economic turmoil of 2008-2009, we
saw overall demand soften in almost all areas.
• Average net face rents for industrial markets
remained stable or improved slightly.
• The future of industrial rental costs is expected
to stabilise given a positive economic condition.
Area
Perth
Core
North, East, South
Brisbane
Trade Coast
Northside
Southside/Outer South West
Yatala
Industrial Market Indicators (2009-2010)
Rent per Sqm
Prime Secondary
$90-110
$80-100
$115-125
$110-120
$110-115
$110-115
$80-100
$70-90
$80-110
$75-95
$75-105
$70-100
Change of Rent
from last period
Remained steady
after a slight decline
in 2008-09
Remained steady
or slightly improve in
some areas after a
moderate decline
in 2008-09
Forecast Rent
(6months)
Adelaide
Inner area
Outer Area
$100-160
$60-100
$50-100
$35-65
Stable
slightly increase
Gold Coast/Northern NSW
$90-110
$80-100
Moderately declined
Sydney
North
South
West/South West
$160-185
$130-150
$95-135
$110-150
$80-110
$70-90
Remained steady
after a slight decline
in 2008-09
Melbourne
Fringe
East/South East
West
North
$130-150
$65-85
$65-70
$65-75
$75-95
$40-70
$42-47
$55-65
Remained steady or
slightly improve in some
areas after a moderate
decline in 2008-09
Source: Colliers International [22,23,24,25,26,27]
www.laa.asn.au 14

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
S u p p l y C h a i n R e p o r t 2 0 1 0
Section B: Market Update
An Update on Climate Change
Business Response to the Climate Change Issue
• Australian federal and state governments have been
working on policy and legislation to reduce greenhouse gas
emissions since 2002.
• At present, the direction of any major legislation is unclear
after the government decided to defer the introduction of the
Emission Trading Scheme (ETS) until 2013.
• Despite the uncertainty of government speed and directions
around climate change policy and legislation, global
businesses continue to put climate change initiatives on top
of their agenda according to the surveys conducted by both
Ernst & Young and PwC [36,32].
Latest Update on Australia’a Greenhouse Gas Emission Level
Australia’s National Greenhouse Gas Inventory
Category
Annual Emissions through to March
quarter (MillionTon CO2)
% change
in annual
emissions
March quarter 2008 March quarter 2009
National Inventory
Energy: Electricity
Energy: Stationary energy
Energy: Transport
Energy: Fugitive emissions
Industrial processes
Waster
Agriculture
National Inventory Total
200
94
80
38
31
15
90
548
201
94
80
40
31
15
91
552
0.80%
0.20%
-0.50%
5.10%
-0.40%
0.60%
0.50%
0.70%
Source: Departmant of Climate Change [31]
• This section highlights the latest change in Australian
Greenhouse Gas Inventory, and reports the current progress
against the target and updates of some of the industryrelated
initiatives.
National Greenhouse Gas Emission Level
• In the 12 months ending March 2010, Australia’s
greenhouse gas emissions declined slightly to approximately
542 million tonnes, or about a 1 per cent reduction from the
previous year.
Greenhouse Gas Emission Reduction Target
Against the Target
• The 532 million tonnes emission recorded in
2010 is a 1.4% decrease from the peak of 549
million tonnes in 2008.
• When compared to 2000, the emission level
has increased approximately 9 per cent.
• Over ten years, the government scheme aims
to reduce between 5 to 15% from emission levels
recorded in 2000.
Million Ton CO2
600
500
400
300
200
100
0
Australia’s Greenhouse Gas Emission Target
GDP ($m)
Minimum Reduction
Target 5% of 2000 level
Ambitious Target, 25%
reduction from 2000 level
Year
• The government also plans to commit to a
more ambitious target of 25% reduction if the
450 parts per million CO 2
target is endorsed
by global members.
Source: Departmant of Climate Change [31]
www.laa.asn.au 15

S u p p l y C h a i n R e p o r t 2 0 1 0
Industry Initiatives
• This section reports a few examples of industry initiatives during 2009-10.
Logistics System Review and Sustainable Facility
• Coca Cola Amatil (CCA) has been widely recognised for its sustainability initiative at its Eastern Creek distribution centre (DC) which
opened in late 2009.
• The DC is part of the CCA logistics system upgrade which expects to remove 26,000 large truck movements from Sydney roads
annually.
• More than 15% of the DC’s energy consumption is supplied by its solar system that produces clean and renewable energy.
• It is estimated that the energy and fuel saving at CCA Eastern Creek distribution centre will result in a reduction of greenhouse gas
emissions of up to 1000 tonnes per annum.
Waste and Damage Reduction
• After reviewing its transport logistics, Sugar Australia has changed the way finished goods are delivered to delivering in containers.
• The initiative resulted in less packaging usage and less damage to finished products.
Fuel Efficiency
• In last year’s report, it was mentioned that the Australian Logistics Council, supported by Linfox and Woolworths, launched an
e-learning program named Eco-Drive for Commercial Vehicles, aiming to provide fuel efficiency education. Many corporations
have embraced the initiative in 2009-10, for example CEVA and Cement Australia commenced the Eco-Driving Training on their
transportation fleet.
Significant Mergers & Acquisitions – All Sectors
• After a quiet year for M&A during 2008-09, late 2009 looked like a strong period for activity after a very large deal in Australia M&A
records was announced for the proposed BHP and Rio Pilbara iron ore joint venture. The proposed deal has a value of AUD 116
billion.
• The proposition however was withdrawn in 2010 after objections by different regulators in Japan, Korea, Germany, Europe and
Australia.
• Resources, Energy and Mining sectors are still the most active sectors in term of M&A deal volume and value in 2009-10.
Significant Mergers and Acquisitions (M&A) Deals
Announced in Australia (2009-10)
Large M&A Deals Announced in 2009-10
Year Deal Industry Size ($AU) Status
2009 BHP and Rio Pilbara iron ore joint venture
Resources 116 billion Abandoned
2009 Yanzhou Coal Mining takeover of the
Australian coal producer, Felix Resources
Resources 3.5 billion Completed
2010 Newcrest Mining takeover offer for Lihir Gold of
remaining shares it does not own
Resources 9.5 billion Completed
2010 Singapore Exchange proposed to takeover
Australia stock exchange operator, ASX
Investment 8.3 billion Pending
2010 Seven Network and WesTrac merged to create an Investment/
operating and investment group
Resources
3 billion Completed
www.laa.asn.au 16

S u p p l y C h a i n R e p o r t 2 0 1 0
Significant Mergers & Acquisitions – Transport and Logistics Sectors
• Few substantial propositions were announced within the sector during 2009-10. The biggest was a proposition by the Canadian
Pension Plan Investment Board, CPPIB, to take over the Transurban Group, which was finally rejected.
• Toll Holdings continued its expansion into different regions by acquiring new businesses as shown in the table.
Recent Mergers and Acquisitions (M&A) in Australia’s
Transport and Logistics Sectors (2009-10)
Recent M&A deals in Transport and Logistics Sector 2009-10
Year Deal Size ($AU) Status
2010 Transurban Group, an Australa’s toll road operator, was proposed to be taken 8 billion Rejected
over by the Canada Pension Plan Investment Board (CPPIB)
2010 Transurban Group bid for Connector Motorways to own the Sydney’s Lane 700 million Pending
Cove tunnel
2010 Port operator China Merchants Group (CMG) acquired Loscam, a leading pallet 676 million Completed
pooling and rental service business in Australia
2010 CPPIB acquired the Goodman Group’s Kmart distribution centre in Melbourne 60 million
Completed
2009-10
Toll Holdings acquired:
2009 Footwork Express, an express freight services company (Japan)
2009 Express Logistics Group (ELG), the freight forwarding companies in NZ
2009 Logistics Distribution Systems (LDS), one of the leading private
international freight forwarding companies in the United Arab Emirates
2010 Qantas Airway’s Asia Pacific air freight business DPEX Group (Asia)
2010 Summit Logistics International (New Jersey)
2010 Concord Park, a privately owned interstate transport company (Australia)
2010 WT Sea Air Group and Genesis Forwarding Group, the freight forwarding
companies in UK
95 million
80 million
128 million
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Pending
2010 Brambles has acquired Unitpool, a Swiss-based major independent provider of 38 million Completed
pooled containers and pallets used by airlines
Australia’s Future Infrastructure
International Gateways & National Freight Network are in
the top priority list for future national infrastructure
• As part of the National Infrastructure Priorities declared in
May 2009, the federal government has committed to develop
competitive international gateways and a national freight
network for the country.
Infrastructure funding is managed through the Nation
Building Program
• Auslink Land Transport Funding Program has been replaced
by the Nation Building Program.
National Infrastructure Priorities
• Competitive International Gateways
- To develop more effective ports and
associated land transport systems
• National Freight Network
- To develop rail and road networks so more
freight can be moved efficiently by rail and by
road
Source: Infrastructure Australia [35]
• Approximately $37 billion is planned for investments on road and rail infrastructure through the Nation Building Program over the
six-year period between 2008-09 and 2013-14.
• $8.5 billion was allocated to several transportation infrastructure projects during 2009-10.
Infrastructure Australia plays a key role in seeking public input and public consultation, and advising the government on
infrastructure needs and priorities for the nation
• During 2009-10, Infrastructure Australia called for public input on the National Freight Network Plan.
• Infrastructure Australia is seeking public consultation on the National Ports Strategy after receiving several public submissions on the
Proposed National Ports Strategy in early 2010.
www.laa.asn.au 17

S u p p l y C h a i n R e p o r t 2 0 1 0
Significant Rail Infrastructure Upgrade Programs 2010-2011
• Significant rail infrastructure upgrade projects for 2010-2011 are shown below.
WA
• Re-railing the line between Koolyanobbing and Kalgoorlie
and building two new passing loops, to reduce
transit times and delays - $95 million, 11 months.
• Upgrading grain freight network, to improve
grain transport efficiency - $352 million,
48 months.
SA
• Re-railing the lines between Whyalla and Broken Hill
and between Parkes and Broken Hill, to allow both lines
to be used by heavier trains - $312 million, 25 months.
Source: Departmant of Infrastructure and Transport [34]
QLD
• Line straightening between Maitland and the
Queensland border, to help reduce transit
times along the eastern seaboard
- $170 million, 14 months.
NSW
• Building three double track passing loops near
Goulburn, Moss Vale and Glenlee, to provide
more overtaking opportunities and reducing
delays - $24 million, 20 months
• Replacing wooden sleepers with new
concrete sleepers on the line between
Parkes and Broken Hill, to improve
capacity, transit time and eliminate the
need for temporary speed restrictions
during summer - $253 million, 13 months
• Complete the detailed planning on the
Moorebank Intermodal Terminal Project in
Sydney’s southwest. The terminal is set
to handle container traffic from interstate rail
freight and Port Botany - $70.7 million,
6 months.
VIC
• Re-railing the line between Albury to Melbourne to Geelong, to reduce transit times
and allow use by heavier trains - $110 million, 13 months.
• Building four new passing loops between Gheringhap and Maroona, to provide trains
with more overtaking opportunities and reduce delays - $32 million, 16 months.
Significant Road Infrastructure Upgrade Programs 2010-2011: SA, ACT and QLD
Below are road projects in South Australia, Queensland and the Australian Capital Territory.
SA
Projects commencing in 2010-11
• The South Road Superway in
Adelaide, the second stage of
the north-south corridor
upgrade, scheduled to be
completed in late 2013 - $812
million, the biggest single
investment in a South Australian
road project.
Projects completing in 2010-11
• The Northern Expressway between
Gawler and Adelaide, opened for traffic in
September 2010 - $564 million.
Source: Departmant of Infrastructure and
Transport [34]
ACT
Projects completing in 2010-11
• Tharwa Road/Lanyon Drive
Extension Stage 2 - $19 million.
QLD
Projects commencing in 2010-11
• Bruce Highway - Cardwell Range realignment in
North Queensland, scheduled completion in 2012 -
$115 million.
• Ongoing improvements to the Warrego Highway,
including the upgrade of sections of the road
between Roma and Mitchell, expected
completion by 2012 - $70 million.
• An upgrade of the Bruce Highway across
the Cardwell Range, scheduled completion
in 2012 - $115 million.
• Safety improvement on the Bruce
Highway between Curra to Sarina and
Sarina to Cairns, expected completion
by 2014 - $24 million.
Projects completing in 2010-11
• Upgrade to the Bruce Highway, southern
approaches to Mackay - $57 million.
• Pacific Motorway - Mudgeereba interchange - $47million.
• Pacific Motorway - Coomera Interchange - $31million.
• Pacific Motorway - Varsity Lakes Interchange - $80 million.
www.laa.asn.au 18

S u p p l y C h a i n R e p o r t 2 0 1 0
Significant Road Infrastructure Upgrade Programs 2010-2011: WA, NSW, NT, TAS and VIC
NT
Projects commencing in 2010-11
• A new high level bridge over the Cullen River on the Stuart Highway, expected completion in 2011 - $6 million.
• An improvement of flood immunity on the Port Keats Road, scheduled for completion in 2012 - $11 million.
• An upgrade of the Central Arnhem Road, scheduled for completion in 2012 - $14 million.
Projects completing in 2010-11
• Stage 2 of the Tiger Brennan Drive East Arm Port Access Road - $89 million.
• Upgrade of the Buntine Highway – $6.6 million.
• Construction of a high level bridge over the McArthur River – $3 million.
• Upgrade of the Plenty Highway – $8 million.
WA
Projects commencing in 2010-11
• Dampier Highway stages 2-6
between Balmoral Road West and
Burrup Road, scheduled for completion
in 2012 - $89 million.
• Great Eastern Highway/Roe Highway interchange, scheduled for
completion in 2012 - $110 million.
• Great Northern Highway realignment in Port Hedland, scheduled for
completion in 2014 - $188 million.
• Hepburn Avenue Duplication stage 1 (Shire of Wanneroo), scheduled
for completion in 2011 - $3.5 million.
Projects completing in 2010-11
• Mandurah Entrance Road at Mandurah - $155 million.
• Reid Highway/Alexander Drive Interchange - $45 million.
TAS
Projects completing in 2010-11
• Bridgewater Bridge Refurbishment and Lyell-Midland
Highway Junction Upgrade - $14 million.
• Formby Road Redevelopment – $2 million.
• Illawarra Main Road Upgrade - $94 million.
NSW
Projects commencing in 2010-11
• Hunter Expressway scheduled for completion in
2013 - $1.7 billion.
• Pacific Highway, Kempsey Bypass, scheduled for
completion in 2014 - $618 million.
• Pacific Highway, Sapphire to Woolgoolga,
scheduled for completion in 2014 - $610
million.
• Pacific Highway, Devils Pulpit, scheduled for
completion in 2012 - $62 million.
• Hume Highway, Holbrook Bypass,
scheduled for completion in 2012 - $210
million.
Projects continuing in 2010-11
• Hume Highway, Tarcutta Bypass - $290
million.
• Hume Highway, Woomargama Bypass -
$265 million.
• Pacific Highway, Ballina Bypass - $640 million.
• Pacific Highway, Banora Point Upgrade - $310
million.
• Pacific Highway, Bulahdelah Bypass - $300 million.
• Pacific Highway, Glenugie Upgrade - $60 million.
• Great Western Highway, Wentworth Falls East
Upgrade - $132 million.
Projects completing in 2010-11
• NSW Bruxner Highway, Alstonville Bypass - $43 million.
• ACT/NSW Lanyon Drive Extension Stage 2 - $19 million.
VIC
Projects commencing in 2010-11
• Kings Road Interchange (Calder Freeway), scheduled for completion in 2012 -
$60 million.
• Geelong Ring Road 4B, Princes Highway Connection, scheduled for
completion in 2014 - $71 million.
• Duplication of the Princes Highway from Waurn Ponds to Winchelsea,
scheduled for completion in 2014 - $220 million.
• Development of the Wimmera Intermodal Terminal at Dooen, scheduled for
completion in 2011-12 - $6.5 million.
Source: Departmant of Infrastructure and Transport [34]
Projects completing in 2010-11
• Geelong Ring Road 4A, Anglesea Road Connection - $125 million.
• Westgate Bridge Strengthening - $240 million.
www.laa.asn.au 19

S u p p l y C h a i n R e p o r t 2 0 1 0
Significant Infrastructure Upgrade 2010-11: Ports and ICT
Ports
Melbourne Port Expansion
• After the completion of the channel deepening project in November 2009, the Victorian government started seeking industry views
and options to meet the future trade volume at the port, which are projected to double by 2020.
• The submission closed in September 2010. The Port of Melbourne Authority is preparing advice for the government based on the
analysis of these submissions.
Port Botany Expansion
• The Port Botany $1 billion expansion project, which began the planning process in 2001, now progresses into the third year of
construction.
• The first five berths are expected to be available for trade in 2012.
Darwin Port Expansion
• Federal government has agreed to allocate $50 million to the expansion of the Port of Darwin.
• The project is expected to commence in 2010-11, and once completed will double the existing capacity and reduce export costs.
National Broadband Network
• The National Broadband Network is the largest infrastructure project the nation has ever undertaken, and is expected to cost $47
billion over eight years.
• The network is the Fibre to the Premises (FTTP), which will deliver an internet speed of 100 Mbps to more than 90% of households
and businesses.
• The network will be designed, built and operated at the wholesale level by NBN Co Limited, a company established by the
government in 2009.
Latest Status
• A trial roll out was lunched in Tasmanian towns (Smithton, Scottsdale and Midway Point) in August 2010.
• Wholesaler prices have not been set. The price guide given by the Minister is to be around $20–30 per month for an internet-only
service, and $30–35 for internet plus voice services.
• Currently, carriers can access the network at a flat rate of $300 per premise.
• A further five trial sites in NSW, VIC, and QLD commenced construction in July 2010.
• An additional 14 trial sites have been announced in all states and the construction will be commenced in Quarter 2 of 2011.
[DBCDE,12]
Warehouse Availability and Trends: Demand
• On the demand side, in 2009-10 there
appeared to be concern over the stability
of economic recovery.
Warehouse Availability and Trends: Demand
Region 2009-2010 Demand Condition and Outlook Demand
Forecast
• Issues of uncertainty in the European and
US markets and the introduction of a resource
tax have slowed down decision-making in
businesses.
• It is noted that Kmart has taken the
opportunity to consolidate into one DC
north of Melbourne, in order to lower costs.
• Demand is expected to strengthen given
a positive outlook of the economy.
Perth
Brisbane
Adelaide
Gold Coast/
Northern NSW
Sydney
• Demand for larger warehouse remains healthy driven by the resource related
sector
• Given the anticipated recovery in economic condition, the planned investment by
resource sector, and the better employment level, demand is likely to improve.
• Demand has overall been improved, although there were times that outlook of the
economic recovery were unclear
• Future demand is expected to be firm and tighten in 2010-11 provided the lower
level of concern over resource tax issue and stability of economic condition
• Demand in 2009-10 has been resilient especially for the smaller space (

S u p p l y C h a i n R e p o r t 2 0 1 0
Warehouse Availability and Trends: Supply
• Supply remained limited in most areas
during 2009-10.
• New developments are expected to be
seen given the less restricted lending conditions
to which investors have begun to adjust.
• It is noted that although the availability of
secondary warehouses has improved
significantly during the crisis, the case is
not true for high quality and prime location
warehouses.
Perth
Brisbane
Adelaide
Warehouse Availability and Trends: Supply
Region 2009-2010 Supply Condition and Outlook Supply
Forecast
• Ongoing lending constraints continued to limit supply in the market
• The market still experienced low level of supply stock
• Shortage of high quality space is presented in larger warehouse
• Now that the investors have taken time to address the credit issues, it is expected
that they will re-enter the market. Given the stabilised land price, we can expect
not to see less supply
• Supply has been quite limited due to a stricter condition impose by financial
institutions. This resulted in a higher cost of new developments upfront.
• As investors getting adjusted to the new financial condition, supply is expected to
continue to be less constrained.
• Limited availability of land in the prime locations (inner regions) still confined the
development opportunities.
• New developments are expected in the pre-commitment leasing group after
almost 2 year of quiet period.
Gold Coast/
Northern NSW
Sydney
Melbourne
• Supply level was driven higher in 2009 because many occupier was forced to
liquidate the asset
• However, development activities and new investments are expected to still be
limited due to stricter lending practice of the bank.
• Lack of high quality property in good locations both for lease and for sale.
• New development activities are very limited due to a stricter condition impose by
financial institutions and the soften demand
Source: Colliers International [22,23,24,25,26,27]
GDP ($m)
www.laa.asn.au 21

S u p p l y C h a i n R e p o r t 2 0 1 0
Section C: Market Participants
Major Players in Integrated Logistics
• Integrated Logistics is the largest sector within the Transport and Storage
Industry worth approximately AUD 90 billion [IBIS World, 15].
Integrated Logistics Market Share
Major Players in Integrated Logistics
• Integrated Logistics contributed more than 50% of the industry’s gross
product.
• Significant players in Integrated logistics include Toll Holding, QR National,
Asciano Group and Linfox.
Toll group
• Toll is the number one player in integrated logistics by market share,
generating a total annual revenue of more than AUD 6.9 billion in 2009-10,
with approximately AUD 293 million net profit.
Other 84%
8%
3%
3%
2%
• Toll provides freight services, freight forwarding services, and logistics services
domestically and globally.
QR National
• QR National is Australia’s largest rail freight company and the world’s largest
train transporter of coal from mine to port for export markets.
• The company has been separated into QR National and Queensland Rail as of
July 2010.
2009-10 Annual Revenue and Profit of
Key Players in Integrated Logistics
Company
Toll
QR
Asciano
Linfox Logistics
All Sector (Approx)
Revenue
(Billion)
6.9
2.9
2.9
2.2
90.0
Profit
(Million)
293
203
310
N/A
• In 2009-10, QR National generated AUD 2.9 billion in revenue. Before
excluding the passenger transport business, the company generated
approximately AUD 4 billion.
Asciano Group
• Asciano Group operates in four segments of Coal, Intermodal, Container
Ports, and Auto, Bulk and General. Coal and Intermodal operate under the
Pacific National brand.
• The group generated AUD 2.86 billion in 2009-10.
Linfox
• Linfox is another major player in Integrated Logistics, operating approximately
5,000 trucks and 1.8 million m 2 of warehouse space.
• Linfox generated more than AUD 2.2 billion of revenue in 2009-10 with an
undisclosed profit.
www.laa.asn.au 22

S u p p l y C h a i n R e p o r t 2 0 1 0
Section D: Australian Industry Performance
International Logistics Performance Index
• Australia’s Logistics Performance ranked
18th of 150 countries in 2010, down one
place from the previous ranking in 2007.
• Average LPI is currently at 3.84, up
from 3.79. The scores on each of the key
dimensions are displayed in the table.
• It is noted that Australia is rated better on
every dimension except Track & Trace.
Source: World Bank [17]
LPI
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Previous
Rank
3
1
4
2
23
7
6
9
12
16
11
15
8
10
14
13
18
17
5
21
Germany
Singapore
Sweden
Netherlands
Luxembourg
Switzerland
Japan
United Kingdom
Belgium
Norway
Ireland
Finland
Hong Kong, China
Canada
United States
Denmark
France
Australia
Austria
Taiwan
4.11
4.09
4.08
4.07
3.98
3.97
3.97
3.95
3.94
3.93
3.89
3.89
3.88
3.87
3.86
3.85
3.84
3.84
3.76
3.71
4.00
4.02
3.88
3.98
4.04
3.73
3.79
3.74
3.83
3.86
3.60
3.86
3.83
3.71
3.68
3.58
3.63
3.68
3.49
3.35
4.34
4.22
4.03
4.25
4.06
4.17
4.19
3.95
4.01
4.22
3.76
4.08
4.00
4.03
4.15
3.99
4.00
3.78
3.68
3.62
3.66
3.86
3.83
3.61
3.67
3.32
3.55
3.66
3.31
3.35
3.70
3.41
3.67
3.24
3.21
3.46
3.30
3.78
3.78
3.64
4.14
4.12
4.22
4.15
3.67
4.32
4.00
3.92
4.13
3.85
3.82
3.92
3.83
3.99
3.92
3.83
3.87
3.77
3.70
3.65
Tracking &
Tracing
4.18
4.15
4.22
4.12
3.92
4.27
4.13
4.13
4.22
4.10
4.02
4.09
3.94
4.01
4.17
3.94
4.01
3.87
3.83
4.04
International Logistics Performance Index 2010
Country LPI Customs Infrastructure
International Logistics
Shipments
Competence
Timeliness
4.48
4.23
4.32
4.41
4.58
4.20
4.26
4.37
4.29
4.35
4.47
4.08
4.04
4.41
4.19
4.38
4.37
4.16
4.08
3.95
Total Business Inventory
• The cost of Total Business Inventory reduced during 2009 to
about $130 billion in December and came back up slightly to
$134 billion in June 2010 Quarter.
• The significant fall of inventory level could be linked to the
reaction of businesses to the economic crisis. It is expected
that the level of inventory will be higher in 2010-2011 because
of an improved economic outlook together with the strength of
the Australian currency. Total inventory alone cannot provide a
full picture of the industry performance.
Total Business Inventory (June 2000 to June 2010)
$m
Inventories (Book Value, Current Prices)
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
GDP ($m)
Period
Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun
00 01 02 03 04 05 06 07 08 09 10
Source: ABS [4]
Inventory to Sales Ratio
• In the last report it was noted that the Inventory to Sales ratio
climbed slightly during 2009, which could suggest the delay of
the industry’s response to declining sales.
• The Inventory to Sales ratio improved again in 2010. Part
of the reason could be that business is still cautious about
prospects and avoids building up levels of inventory.
• Overall, the Inventory to Sales ratio has continued to improve
over the years due to improved supply chain management
practices.
Ratio
Inventory to Sales Ratio (June 2000 to June 2010)
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
Period
0.0
Jun
00
Jun
01
Jun
02
Jun
03
Jun
04
Jun
05
Jun
06
Jun
07
Jun
08
Jun
09
Jun
10
Source: ABS [3]
www.laa.asn.au 23

S u p p l y C h a i n R e p o r t 2 0 1 0
Section E: Employment and Training
Employment Level in Transport and Storage Industry
• The industry shows a long term growth of
employment over the last decade. Employment
level is up from 467,000 persons in 2000 to 571,000
in 2010.
• This represents an annual growth rate of 2.1%.
(’000) Person
700
600
500
Employment Level in the Transport and Storage
Industry between August 2000 to August 2010
Employment Level in Transport Industry (’000) Person
• However, when considering the short term growth,
the employment level was reported to be falling in
2009 after peaking at a workforce of approximately
600,000 people early the same year.
400
300
200
100
• The record shows that the employment level did
not fall further in 2010.
• The Department of Employment and Workplace
Relations (DEEWR) has predicted that industry
employment will grow in the long term and that
the industry is expected to employ around 640,000
persons in 2014-15. DEEWR [see 5].
0
Aug
00
Aug
01
Person Employed
Year on Year Growth
Source: ABS [37]
Aug
02
Aug
01
467
0.3%
Aug
03
Aug
02
442
-5.2%
Aug
04
Aug
03
465
5.1%
Aug
05
Year
Aug
04
494
6.3%
Aug
06
Aug
05
501
1.5%
Aug
06
509
1.5%
Aug
07
Aug
07
542
6.5%
Aug
08
Aug
08
571
6.5%
Aug
09
Aug
09
579
1.4%
Aug
10
Aug
10
571
-1.4%
Change of Job Vacancies in Transport and Storage Industry
• The figure shows the Internet Vacancy rate within
the industry across all skill levels based on a count
of online vacancies newly lodged on SEEK,
MyCareer, CareerOne and Australian JobSearch,
recorded by DEEWR [see 5].
• The Internet Vacancy in the industry reported in
February 2010 fell 45% compared to the same
period in 2008.
• A sharp drop in Internet Vacancy is noted in
all states and territories apart from ACT.
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Number of Internet Vacancies by State/Territory
February 2008, 2009 and 2010
Total Vacancy
% Change from Feb 08
Feb 08 Feb 09 Feb 10
15,607
N/A
9,449
-39%
8,557
-45%
Feb 08
Feb 09
Feb 10
NSW VIC QLD SA WA TAS NT ACT
Source: DEEWR Industry Internet Vacancy Index (three month moving average) see [5]
www.laa.asn.au 24

S u p p l y C h a i n R e p o r t 2 0 1 0
Employment in Transport and Storage Industry by Gender
• The industry’s workforce remains dominated by
males. The proportion of male-to-female
employment has remained virtually unchanged
during the past decade.
• In the August 2010 quarter, male employment
represented approximately 78% of the total
workforce.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Workforce by Gender (Quarterly)
August 2000 to August 2010
Transport and Warehouse Workforce by Gender
Percent Female
Percent Male
0%
Aug
00
Aug
01
Aug
02
Aug
03
Aug
04
Aug
05
Aug
06
Aug
07
Aug
08
Aug
09
Aug
10
Source: ABS [28]
Employment in Transport and Storage Industry by Age
• There is growing concern over the high proportion
of themature workforce in the industry.
• It is suggested that the proportion of the mature
workforce is amongst the highest of all industries,
second only to Agriculture, Education and Health
Care. [5]
• The figure illustrates the movement of workforce
proportion by age group over the past decade.
• The percentage of workforce aged over 45 years
grew from 36% in 2000 to 44% in 2010.
• The Australian Transport Council (ATC) has included
the fact as a key issue when developing a strategic
action plan for National Workforce Planning and Skills. [20]
• The ALC seeks industry collaboration and coordination
to support and act in the identified areas for action.
30%
25%
20%
15%
10%
5%
0%
Source: ABS [37]
Workforce by Age Group
Transport and Warehouse Workforce by Age Group
2000
2005
2010
15-19 20-24 25-34 35-44 45-54 55-59 60-64 65 and
over
Education and Training in Logistics
• Major channels which provide education and training in Logistics remain the same being:
- Universities and Colleges providing qualifications from Bachelor degree to Doctorate. Degrees in the area of Operations
Management, Supply Chain Management and Engineering are being offered at most of the universities/colleges.
- In terms of vocational studies, TAFE Institutions and Colleges provide short courses, Certificates I-IV and Diplomas in different
areas ranging from purchasing, transport, warehousing, maritime and aviation.
- Training Institutions offer courses (some of which are government funded) similar to the certificates and short courses offered by TAFE.
- Several companies in the industry also provide internal development programs, such as the graduate Program or Traineeship -
Program offered by Linfox and DHL.
- Other training channels include: LAA/apics which coordinates a mentoring program and short courses, TLISC which provides
training packages in Transport, Logistics, Maritime and Aviation, TDT Victoria which offers cadetship programs related to
Transport, Distribution and Logistics, and MGSM and CSIRO which offer executive courses.
• Although it seems that industry provides strong coverage of education and training channels, the need to improve integration
between these channels and long term capability requirements is highlighted as a key challenge facing the industry [18].
www.laa.asn.au 25

S u p p l y C h a i n R e p o r t 2 0 1 0
Section F: Regulatory Environment
Nationwide Transportation Regulation Reform – The Development
• In July 2009, the Council of Australian Governments agreed
to the Transportation Regulation Reform which forms part of
the National Partnership Agreement to Deliver a Seamless
National Economy. Three key agendas were proposed as part
of the reform which relate to;
1. Heavy Vehicles: a single national system of heavy
vehicle regulation, registration and driver licensing;
2. Maritime Safety: a single national system for maritime
safety regulation administered by the Australian Maritime
Safety Authority; and
3. Rail Safety: a national rail safety regulator and a
national rail safety incident investigator.
• The National Transport Commission (NTC) is responsible for
developing the draft of the national laws for heavy vehicles and
rail safety [21].
• The formal industry consultation on the draft laws is planned
to take place in the first half of 2011.
• It is intended that the agreed national legislation is to be
approved by April 2011.
• The transition is planned to take place during 2011-2012.
• It is expected that these regulators will commence
operation by 1 January 2013.
• The Emission Trading Scheme (ETS) which was planned
to be introduced in 2010, has now been deferred to 2013.
• The ETS scheme was to be based on Professor Garnaut’s
Climate Change Review that recommended the
mechanism for the trading scheme.
• In the meantime, the government plans to tackle the
climate change problem through Energy Efficiency [18].
• Queensland will be the host regulator for national heavy vehicles.
• The Australian Maritime Safety Authority to be the national
regulator for maritime safety, responsible for regulating of all
commercial shipping in Australian waters.
• The National Rail Safety Regulator will be based in Adelaide.
Source: ATC [33]
The Development
What the Industry might be Expecting to
See in the ETS
• Inclusion of Transport in the Emission trading scheme.
• Emission permits being sold by competitive auction, and not
given away freely.
• Permits may be sold at a “low, fixed” price during the transitional
phase.
• Inclusion of as many sectors as possible to the scheme for the
purpose of spreading the costs across the economy.
• Based on Garnaut’s Climate Change Review recommendations,
commissioned by the government. [16]
Source: ATC [33]
Propose Energy Efficiency Legislations
• Propose Energy Efficiency Legislations
• Introduction of an Emission Standard for light vehicles, 190 g/km
by 2015 and 155 g/km by 2024 (current level is 222 g/km).
• Legislation related to energy efficiency standards for electric vehicles
and heavy vehicles is expected.
Voluntary Program
• National Carbon Offset Standard (NCOS) launched in July 2010
- Businesses offering CO 2
-neutral products/services can have the
products/services certified and display NCOS logo
• Other voluntary programs to improve energy efficiency of light
and heavy vehicles is expected.
www.laa.asn.au 26

S u p p l y C h a i n R e p o r t 2 0 1 0
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www.laa.asn.au 27

1986-2011
Logistics Association of Australia
Phone: 1300 651 911
Web: www.laa.asn.au
Address: PO Box 1265
Parramatta NSW 2124