Sydney Ports Corporation

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Sydney Ports Corporation
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Sydney Ports Corporation
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Committed, not just compliant

Sydney Ports Corporation
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Sydney Ports Corporation was established in 1995, but its history truly dates back centuries. “It has got a long history and it’s been through a number of evolutions or revolutions in the way the corporation’s been structured,” says Grant Gilfillan, CEO of Sydney Ports. Every one of those changes has been centred on making the port authority more productive and efficient, and brought it closer to being run more like a private enterprise. “Indeed, that’s the way many of the port corporations are these days, particularly in Australia.” This has proved to be a good thing, because under its current leadership, Sydney Ports Corporation has become a world leader in innovation.

 When Gilfillan started at the organisation in 2008, Sydney Ports Corporation only did what was expected of a port authority, providing services like pilotage and navigation, and generally acting as a landlord. In Gilfillan’s view, however, that was insufficient. “We reinvented ourselves from 2008 on and we built a team of people who are focused on not just delivering those services and being a landlord, but also in playing an active role in improving the way the port operates,” Gilfillan says. Over that period of time, Gilfillan and his team have implemented some substantial reformation measures – doing things like building incentives into the stevedores’ leases to be more productive in the way they operate, and creating the Port Botany Landside Improvement Strategy (PBLIS), which has created a regulatory relationship between road transport carriers and stevedores to ensure there is a consistent level of service with minimal queuing and delays.

“Our role has diversified,” Gilfillan says. “We’re more than just a facilitator. We’re a leader, and we have regulatory power to make the port as efficient as possible.” A prime area of focus thus far has been implementing PBLIS to improve truck turnaround time. “Every port around the world has its own set of issues,” says Gilfillan. “We at Sydney identified that the barrier to achieving the full capacity of our port footprint is the interface of the transport industry – trucks and trains – with the port.” Before Sydney Ports started the reform process, the truck turnaround at Port Botany used to be considered subpar. However, through a combination of cooperation and regulation, Sydney Ports has implemented a commercial relationship between transport companies and stevedores, wherein both parties pay each other reciprocal penalties if they do not perform. “I think that’s a first, I’m not aware of that anywhere else in the world,” Gilfillan says. “It’s been highly successful.”

The penalties that flow back and forth through PBLIS between the transport companies and the stevedores almost cancel each other out, Gilfillan explains, so the system has been proven to work. The net effect is that truck service times have come down from around 55 minutes to less than 30 minutes.“That’s something we have done here that definitely needs to be known. There are ways to deal with these issues if you put your mind to it,” he says. “It’s just been a combination of having the right people in government who are prepared to support us with the regulatory power, and secondly having a team of people inside the port corporation who are motivated to make a difference and want to improve things, not to view it as somebody else’s problem. And in PBLIS that’s what we have.”

Those measures constituted Stage 1 of Sydney Ports reform plan, explains Lachlan Benson, Executive General Manager of Industry Relations and Logistics. “We’ve had an overwhelming success with the reduction in truck turnaround times,” he says. “One of the next challenges for us revolves around looking at the efficiencies of the empty container parks, which form a vital link in the supply chain – particularly understanding the correlation between truck trips made to empty container parks and then on to the port terminals, and any sort of causal effects of delay we can look at improving.”

Another key challenge facing the PBLIS team is lifting the rail mode share to and from the port. At the moment, Sydney Ports is finalising a rail strategy, and working on implementing that strategy. The goal is to double the percentage of containers carried to and from the port by rail by 2021. “All of the work we have been doing has been focused on four goals – efficiency, consistency, transparency, and transition to 24/7 operations,” Benson says. Sydney Ports is currently developing an Intermodal Logistics Centre at Enfield to service the port via dedicated freight rail line access, which Benson says is proof that Sydney Ports is putting its money where its mouth is in regards to their commitment to growing the rail mode share.

An interesting dynamic

Sydney Ports Corporation employs approximately 330 people in total, about half of whom are employed in operations directly. When Sydney Ports is looking for employees, it looks for different qualities for different jobs. When it comes to their operations personnel, it needs people who are committed to high quality service and consistent service delivery. Those qualities are not inconsistent with the rest of the organisation, but the inspiration does differ. “What motivates those who are involved with these new processes is that desire to push the boundaries, to do new things, and make things better,” Gilfillan explains. At Sydney Ports, there is a culture which values both innovation and the quality and history of being a good operator. “It’s an interesting dynamic within the organisation,” Gilfillan says. “You’ve got the steady hand on the tiller in operations, and you’ve got the ‘Let’s make a difference’ philosophy in our logistics area.”

While Sydney Ports does have some amount of staff turnover, the rate is very low compared to other organisations. For some time now, it has been targeting people who have a desire to be part of a journey. “Once we got a core nucleus group who were like that, that was when this reform process really gathered momentum,” Gilfillan recalls. “It wouldn’t have happened if the government in New South Wales hadn’t been committed to this process as well. We had a champion in the government pushing us to do this because they could see the benefits not just to the port, but to the whole state.”

“You get this alignment of purpose that occurs within an organisation,” continues Gilfillan. “We have a vision from the top down. That goes right to government and down through to staff, who buy into the journey and are really committed to what they’re doing. It’s the difference between being compliant and being committed.”  When Gilfillan started, he saw Sydney Ports Corporation as compliant, doing its duty but not much more. Now, three years later, it is an organisation that is committed to being a world leader at what it does.

Continuous quality

Over the last three years, Sydney Ports Corporation has been conducting a lot of project work, and that has forced it to consider the issue of sustainability. “All of these projects require us to take a fairly proactive stand on how we approach the project from a sustainability perspective, but also from the perspective of giving back to the community,” Gilfillan says. Sydney Ports is building a new terminal at Port Botany, for example, and of the more than $800 million it is spending on that, $30 million is going towards environmental works – things like improving the estuary, improving the beaches, and building boat ramps. “Not all of that is about environmental sustainability, but it’s about community sustainability as well.”

While Sydney Ports is taking these sorts of initiatives, its commitment goes above and beyond. “Sustainability and being conscious about the environment, to some people, is about printing on both sides of the paper and small ticket initiatives like that,” Gilfillan says. “But when you think about what we are doing with this logistics chain improvement through PBLIS, this is about sustainability on a massive scale. It’s the macro initiatives that others find very difficult to deal with. And when you can’t fix the big issues you play around with the little ones – but we’re trying to do both.” If Sydney Ports is able to bring all its logistic chain reformations to fulfilment, it will massively cut its carbon emissions. It will be doing things like getting more boxes on rail, more boxes per truck trip, and will have trucks parked in a dedicated truck marshalling area so they do not have to sit on the side of the road idling in community areas. “We’re just doing a whole range of things that lead to more efficient transport,” he says. “And efficiency means fewer emissions. That’s where we can put our hand on our heart and say we’re making a difference.”

When it comes to the challenges facing Sydney Ports Corporation, Gilfillan says the most topical is shipside port congestion – a challenge that has been exacerbated by events like severe weather, mechanical issues and industrial relations issues. “We have a new terminal and new operator in Hutchinson coming on stream in 2013,” Gilfillan says. “Our issue at the moment is: what do we do between now and 2013?” Sydney Ports is in the middle of this issue because it has taken on a leadership role in assisting with logistics chains and implementing leases to improve the terminals operations. “Our stevedoring leases contain performance clauses in them,” he explains. “They pay more rent if they underperform and they pay less rent if they perform better. These things all assist in encouraging the stevedore to invest in equipment to resource up the terminal and provide the maximum service level.” Those incentives, and other aspects of Sydney Ports’ logistics reform, mean the port is heading in the right direction.

As far as the future is concerned, Gilfillan sees Sydney Ports continuing on the path to improvement. “I see more of the same. More intensity,” he says. The New South Wales Government recently announced that it will investigate the refinancing of Port Botany, looking to free up capital to reinvest in transport infrastructure as well as bring in private investment. Because of that, Gilfillan says that in the next three to four years, Sydney Ports will likely be leaner and tighter in everything it does, but will not lose that commitment to continuous improvement in how the port and the logistics chain operates. “Considering the quality of work we’ve done so far, I would be optimistic that the government would want to maintain that sort of quality activity.”