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DP World Brisbane Queensland Transport Infrastructure 2013

Catering for future growth: DP World Brisbane Container

Terminal Redevelopment Project

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About DP World

• DP World operates a portfolio of more than 65 marine terminals across six continents1,

including new developments underway in India, Africa, Europe, South America and the Middle East

• Container handling is our Company’s core business and generates more than three quarters of our revenue. In 2012, DP World handled more than 56 million TEU (twenty-foot equivalent container units) globally

• With our committed pipeline of developments and expansions, our global capacity is expected to rise to more than 100 million TEU by 2020, in line with market demand

• DP World has a dedicated, experienced and professional team of 28,000 people serving its customers around the world, with the Company constantly investing in terminal infrastructure, facilities and people to provide quality services today and tomorrow, when and where customers need them

• In taking this customer-centric approach, DP World is building on the established relationships and superior level of service demonstrated at its flagship Jebel Ali facility in Dubai, which has been voted “Best Seaport in the Middle East” for 19 consecutive years

1 As of August 2013

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About DP World

• DP World was formed in September 2005 with the integration of the terminal operations of the Dubai Ports Authority (DPA), which was focused on the UAE ports of Rashid and Jebel Ali, and DPI (Dubai Ports International) which had been set up to export this success internationally

• In January 2005, DPI transformed its network with the strategic acquisition of CSX World Terminals (CSX WT), the international terminal business of CSX Corporation. This acquisition gave the company a strong presence in Asia with major operations in Hong Kong and China as well as operations in Australia, Germany, Dominican Republic and Venezuela. Importantly for the future development and expansion of its network, DP World also acquired CSX’s 9-berth Pusan Newport (PNC), South Korea

• DP World’s growth in the operation of marine terminals took another giant leap forward with the acquisition of P&O in March 2006, expanding our portfolio of terminals and adding P&O Maritime Services to the group. The combined container throughput of both companies for 2005 was more than 35 million TEU across terminals from the Americas to Asia

• The acquisition also brought with it an exciting pipeline of projects

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Global terminal network

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Our Vision, Mission and Values

Vision

Sustainable value through global growth, service and excellence

Mission

A global approach to a local business environment where excellence, innovation and profitability drives our core business philosophy of exceptional customer service

Values

• Commitment to our people and our customers

• Profitable global growth

• Responsible corporate and personal behaviour

• Excellence and innovation

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Port of Brisbane

• The DP World Brisbane is located at the Port of Brisbane, formally known as Fisherman Islands

• The Port of Brisbane is one of Australia’s fastest growing container ports and Queensland’s largest general cargo port

• The Port of Brisbane is located at the mouth of the Brisbane River, and is managed and developed by the Port of Brisbane Pty Ltd (PBPL), under a 99-year lease from the Queensland Government

• DP World (through it’s former company’s BATL and then P&O) secured the first stevedoring lease at the Port of Brisbane in 1980

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Trade growth

• Annual containerised cargo growth through the Port of Brisbane (particularly in early part of the last decade) was particularly strong and well ahead of the larger southern ports of Sydney & Melbourne

• 2000-2008 delivered averaged growth of an annualised 11%

• Whilst a retraction of -4.5% in 2009 as a result of the GFC was experienced annualised growth from 2010-2013 has been an average of 4.5%

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Background to our redevelopment/ challenges

• The facility opened in 1980 with a rail mounted gantry crane and forklifts followed by the addition of internal tractor trailers from the late 80’s

• With low volumes by global standards, the existing equipment continued to allow the efficient movement of containers cargos to/from ships, the yard and road transport

• With strong volume growth the key challenges of continued use of existing equipment included: – Poor use of land through requirement for large roadways – Disproportional need for increased requirements for mobile equipment – Increasing manpower requirements – Loss of ‘usable capacity’ as vacant slots had to be reserved for internal movement of containers to

affect the efficient delivery to road transport

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Container stacking density

Stack Density per Hectare

Image courtesy of Kalmar Industries

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Background to our redevelopment/ challenges

• With 2 Stevedores operating with close of 50/50 market share and a third likely to enter within the decade, by the end of 2007 the Company has set it’s sights on a redevelopment of the facility to a Straddle terminal given the Company’s familiarity with this equipment both locally (Melbourne & Adelaide) and internationally

• With targeted development due to commence in 2009 and completed by 2011, an estimated A$250m investment would deliver operating capacity of 1m TEU through improvements in waterside & landside performance, a reduction in overall operating costs and improved financial returns

• Capacity concerns would be addressed through to 2026

• Development could be staged with an orderly transition from the existing tractor trailer & forklift mode to Straddles with the addition of 9ha due to be acquired from the Port of Brisbane Corporation in 2009

• The Company set about finalising detailed layout design, development and a transition strategy

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Straddles

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What changed - Automation

• With volumes through the Port of Brisbane jumping in 2007 by 14% we had concerns that continued strong growth would see capacity constraints realised in less than 15 years and despite the A$250m investment and wholesale change we would have to revisit a further redevelopment within a window of 10 years or less

• Whilst automation on the waterfront industry was not new (ECT in The Netherlands in

1993 & CTA in Germany 2002), the generally accepted industry norm was that satisfactory financial returns could only be achieved in an automated or semi facility handling more than 1m TEU/pa

• Whilst a long held view, clearly this view was changing: – Our competitors opened a world first fully automated Straddle facility with the

introduction of AutoStrad™ technology in 2006. Despite operational performance being below expectations initially we saw they had delivered significant savings in operational costs and efficiency

– DP World in Belgium commenced civil works and placed orders for initially 4 Automated Stacking Cranes (ASC’s) and a subsequent order for an additional 10 ASC’s

– APMT Virginia’s development was also well underway with the planned introduction of ASC’s by the end of 2007

– All 3 facilities would initially be handling less than 1m TEU/pa

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The planning

• In early 2008 the Company then set an aggressive 8 month objective of:

‘ Defining an automated terminal design that achieves the lowest operating cost, at acceptable capital expenditure, offering highly efficient services and flexibility to expand throughput capacity, in addition to a feasible transition process’

• A project team was established and we engaged with industry experts in simulation and emulation of automated facilities. The goals

– Determining the productivity of the ASCs for both the land and the waterside under varying circumstances e.g. stack width, interchange buffers, ASC speed, and number of transportation vehicles per ship to shore crane/quay crane (QC)

– The engineering specifications of ASCs required

– QC productivity

– Service time of trucks at the landside from arrival at the transfer zone, until receiving the container

– Maximizing throughput capacity, balancing storage capacity against the handling capacity, based on dynamic simulations, comprehending all relevant variations to which the terminal would be exposed

– A layout design able to handle peak loads, both handling and storage wise, balancing costs and both investment and operational costs per move

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What is semi automation?

• Landside

• Automated stacking cranes (ASCs) loading & unloading trucks

• Yard

• ASCs stack, pick, sort, housekeep and deliver to landside and waterside interchange or truck

zones

• Waterside

• Manned sprinter straddles (2 high) deliver between ship and stack and/or between stacks

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The planning & next steps

• The 8 month timeframe was achieved and by Nov 2008 financial justification for redevelopment of the site to Automated Stacking Cranes (ASC’s) and Shuttle Carriers (1 over 1 Straddles) at a total cost of A$250m was presented. Provisional approved granted subject to finalisation of final development, equipment, system and infrastructure costs

• Following this approval the project team then set about reviewing and finalising:

– Simulation and emulation modelling to optimise layout and required performance

– Engaging with consultants to undertake detailed civil & electrical designs

– Finalisation of detailed equipment specifications and tenders

– Finalisation of operating systems and technology requirements and tenders

• Critical to this process were a number of detailed investigative tours of automated facilities in Belgium, Rotterdam, Germany and Virginia

• Final approval for the project was attained in May 2012, following a delay due to GFC

• Civil construction commenced July 2012

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DP World Brisbane pre construction commencing

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Plan

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The future

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Technology & Infrastructure

• Investment in technology from the start was a critical component of the project

• Training of employees ahead of commencing the new facility was identified as a key

risk and we set out to look for solutions

• We identified that a training simulator similar to those used in other industries

including the Mining industry, Airline Pilots and Marine Pilots would be a great

option

• After an extensive search the contract to develop the custom-made software was

awarded to Applied Research International (ARI) from New Delhi

• Trainees and stevedores practice in a virtual environment where they manoeuvre

containers with outside factors including wind and tight spaces being taken into

account as well targeted time frames that need to be met

• The training simulator, the only one of its kind in the Australian stevedoring industry,

and allows trainees and existing employees to practice the operation of different

container handling equipment used onsite

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Technology

• This investment in technology ensured our stevedoring employees’ skills remain current and the simulator is a fantastic tool to assist in their competency development and assessment

• Whilst time-saving, it is also a cost effective form of training, as it reduces the impact on the terminal operations, especially during peak periods

• DP World were a finalist and recognised as a leader of innovation in the Brisbane Innovation Scorecard 2012 awards

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Technology - Emulation & Simulation

• Modelling waterside, landside performance levels, stack length, truck processing times

etc. was critical to ensuring we and our suppliers designed and delivered a ‘best in class’

facility

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Infrastructure

• Civil & electrical design

• Future proof the facility through installation of 30% more conduit than required

• Installation of HV substations with redundancy to cater for any future localised power interruption

• Power regeneration redirected internally to offset power consumption in other areas reducing overall site consumption

• Wireless technology allowing real time viewing of power & fuel consumption, equipment and operator performance

• Unmanned gates

• Automated road truck handling

• Bunded areas for hazardous/marine pollutant storage

• Energy efficient & sensor controlled lighting

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Technology and Infrastructure

• DP World Brisbane has partnered and engaged with both international and local suppliers for design, construction, systems, technology and equipment required to operate in the new facility

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Key learning’s

• Project team

• Establish an Executive leadership team including the appointment of an experienced Project Manager

• Don’t ‘short change’ the size of the project team

• Establish a regular and fixed date/time progress meeting schedule, have a set agenda, require all reports to be updated ahead of meetings

• Sharing of information

• Hold people accountable for their areas of responsibility and commitments

• Take a ‘no surprises’ approach to the project team

• Manage up. If you are seen to be totally across the project whomever you report to will have the confidence to let you run it without unnecessary inference

• Focus on the detail

• Drainage, electrical, external parties/suppliers, clearly defined equipment requirements

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Key learning's

• Suppliers

• Potential suppliers are very adapt at over promising the value and breadth of their products

• Engage with others who operate similarly or use their product or services

• Nothing beats engaging with other business and understanding their experiences, their successes and challenges, their key learning’s, having them identify what they got right, what they would do differently, where they realised unforseen gaps in operating system or suppliers and how they overcame them

• Ensure contracts or service agreements are water tight

• Outline your expectations on co-operation between suppliers from the beginning

• Project costs

• Establish early and clear recording and reporting of costs against the project budget

• Set procedures and limits for expenditure approval

• Be clear on your costs

• Don’t assume another department has accounted for something

• Don’t underestimate the hidden costs such as variations, extra security, fencing, portable toilets, delays etc

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Key learning's

• Partner with key suppliers

• Selecting the right key suppliers is essential

• Civil designers who are prepared to share in your goals

• A civil construction company who is flexible to changing requirements

• Civil supervision (Superintendent) who are project owner focused

• Don’t fall into the trap of setting unrealistic timeframes. It always takes longer

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Equipment

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Overview

Click to start time lapse video >>>

https://vimeo.com/76179137

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Challenges

• It’s been a remarkable privilege to have had responsibility for this redevelopment project since inception, despite the significant challenges along the way. These have included;

• Increasing volumes both through port growth and increased market share

• A reduction in available/usable terminal capacity of greater than 30%

• The emergence of larger vessels and the demand for reduced berthing windows (i.e. time alongside) with unchanged or growing vessel exchanges

• Improving operational performance and engineering efficiency

• The continued business demand for improving financial returns

• Ageing equipment requiring increased attention to maintain uptime

• The Human Resources and Industrial relations challenges of in the face of a reduction in workforce numbers by greater than 50% at the conclusion

• Consulting/negotiating revised work/rostering arrangements delivering operating labour savings and increased labour flexibility

• No industrial action

• Leading a highly motivated team

• Delivering a $250m project on time and on budget

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Benefits to industry

• ‘…A world class automated terminal driving consistent operational performance and boosting productivity…’ DP World Australia Managing Director Ganesh Raj

• ‘…Greater efficiency and increased productivity through the port. DP World’s transition to an automated terminal will position the Port of Brisbane as one of the most modern, state-of-the-art ports in the world. We are very supportive of the work DP World is undertaking to streamline the logistics supply chain and enhance trade growth through the port …’ Port of Brisbane Pty Ltd Chief Executive Officer, Russell Smith

• ‘…Highly secured operations and fully integrated systems minimise unexpected errors and maximise safety…’ Peter McLean Vice President Cargotec Oceania

• The project is due to be completed by end Q1 2014

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Thank you