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ECA & SAL Conference Sydney, August 2012 TOWAGE & MARINE SERVICES BUILDING COMPETIVENESS.

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Presentation on theme: "ECA & SAL Conference Sydney, August 2012 TOWAGE & MARINE SERVICES BUILDING COMPETIVENESS."— Presentation transcript:

1 ECA & SAL Conference Sydney, August 2012 TOWAGE & MARINE SERVICES BUILDING COMPETIVENESS

2 Melbourne Harbour Towage Operations Terminal Towage Salvage Warehouse Newcastle Weipa Cairns Mourilyan Lucinda Bowen – Abbott Point Mackay Brisbane Bundaberg Sydney (Port Jackson & Port Botany) Port Kembla Westernport Geelong Port Adelaide Whyalla Port Pirie Ardrossan Port Giles Project Magnet Port Bonython Port Lincoln Thevenard Albany Kwinana Fremantle Geraldton Koolan Island Cockatoo Island Darwin Darwin LNG Eden Port Moresby Rabaul Kimbe Lae Madang Papua New Guinea Australia New Zealand Suva Lautoka Fiji New Caledonia Gorgon LNG TOWAGE & MARINE SERVICES SVITZER AUSTRALASIA COVERAGE

3 TOWAGE & MARINE SERVICES HOW RELEVANT ARE TOWAGE CHARGES Towage represents on average 30% of the cost for calling at an Australian Port Different ports vary to a significant degree based upon - Size of vessels - Number of vessels calls - Frequency of individual vessel calls - Tug intensity per ship movement

4 TOWAGE & MARINE SERVICES CURRENT COST OVERVIEW

5 TOWAGE & MARINE SERVICES TOWAGE COST MODEL

6 TOWAGE & MARINE SERVICES TARIFF V LABOUR COST TREND Productivity/Recruitment/Redundancy

7 REVENUE V COST TREND SINCE LAST EBA

8 TOWAGE & MARINE SERVICES SERVICE PROFILE Service reliability, as an industry, is extremely high Service provision typically covers all eventualities Economic impact of >99% service level perhaps not the most efficient, how any lowering of service will not equitably effect all ports users Cost of service failures to our customers can be extreme e.g. demurrage, fuel etc What is the correct and most efficient level? What would the market accept?

9 TOWAGE & MARINE SERVICES EXPERIENCE PROFILE Towage is a “facilitation” service and is to a large degree insurance The skill of the crew is more important than the tug capabilities The importance of local knowledge and experience cannot be underestimated The retention of skills/experience is a KPI and increasingly challenging Finding the correct balance between “fit for purpose” and upgrading fleet capability is key component of cost mitigation

10 TOWAGE & MARINE SERVICES HOW WE ARE IMPROVING COMPETITIVENESS

11 TOWAGE & MARINE SERVICES LABOUR COST COMPETIVENESS Three factors are driving labour cost trend; - availability (projects, supply v demand) - “Traditional” waterfront attitudes (reluctance to change) - retention of core skills/experience We are taking a number of steps to address the trend; - Roster certainty and improved work/life balance - TABU, improved empowerment/ownership/job satisfaction - Advisory board concept, both nationally and locally - Increased transparency on cost outcomes/modelling - Annual employee engagement survey - Clarify the delta between salary trend and cost trend

12 TOWAGE & MARINE SERVICES ASSET UTILISATION Looking to cover increased work levels with the same tug fleet by; - Reviewing optimal tug configuration - Greater utilisation of assets via roster enhancements - Utilising scale of operation to mitigate off service periods - Cascading of older tugs to suit commercial and operational requirements Review and match our operational capability to the needs of our customers and stakeholders. Consider alternative use of HT assets to decrease the financial burden on the customers of a port (where operationally feasible)

13 TOWAGE & MARINE SERVICES FUEL COSTS AND EMISSIONS REDUCTION Circa 10% of our operating costs Fuel consumption linked closely to operational behaviour Chemical solutions being trialled to reduce fuel burn and emission per litre consumed Improved planned maintenance system being rolled out to increase operational efficiency

14 TOWAGE & MARINE SERVICES FURTHER OPPORTUNITIES

15 TOWAGE & MARINE SERVICES SHIPPING REFORM PROCESS Towage (and offshore) not currently considered as part of initial reform Largest trade sectors with regard to existing employment, significant growth profile Any workforce initiatives will need and should need to involve towage/offshore sectors An opportunity exists to meet both shipping reform ambitions and the future training and employment needs of the country whilst making port services more internationally competitive AMTA recently established to consider, alongside ASA, how this can best be achieved

16 TOWAGE & MARINE SERVICES STAKEHOLDER DIALOGUE Long term views with regard to capability to allow efficient planning Port Licensing process to permit a continuous competitive landscape A balanced approach to marrying desired marine capability with a competitive “fit for purpose” capability customers can afford Flexible labour paths and certification routes to maximise workforce opportunities and efficiency and avoid “boom and bust” Weigh up cost/benefit analysis of 100% service level capability 24/7

17 SUMMARY


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