The Kirby Reports: Volume I - Report - Chapter VIII continued

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5. PROBLEMS INHERENT IN THE SCHEME

5.1 Introduction

A number of operational problems were discussed in
the course of public hearings. Certain safeguards
will be suggested in Section 6 of this Report to
overcome problems which may otherwise arise.

5.2 The Destination of Import Containers

5.2.1 The Destination Must be Known Before the
Vessel Begins Discharging

Under the Western Suburbs Scheme it will be necessary
to identify FCL containers destined for the Western
region. These containers would then be segregated
from other containers and despatched by rail to a
decentralised depot.

It was suggested that the identification of the final
destination of an import container by the terminal
was difficult if not impossible. The CTAL submission
made the following comment ₍₁₈₄₎:

"The P.E.C. scheme (i.e. the Western Suburbs
option) appears on the surface to be a
logical appraisal of an environmental issue.
Unfortunately, no recognition is given to the
enormity of the problems resulting from its
basic requirement of geographically identify-
ing the origin/destination of export/imports."
(emphasis added)

184. S.K/C 1421 letter 27/3/80 and see transcript
28/3/80, page 3.

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The shipping documents do not always disclose the
final destination of the container. Very often
the ship's manifest records a post office box
number or a head office address. The actual
destination (which may be a warehouse or a factory)
is not stated. In many cases it is not known until
the vessel is actually discharging.

Someone must obviously know the final destination
of an import container by the time the vessel
completes discharging. An importer is only allowed
a storage period of 3 days. If the container is not
removed within that time, hefty storage fees begin
to accumulate.

Knowing the destination after the vessel berths is
not good enough. The final destination must be known
before the vessel begins discharging. Only then can
the 'Western suburbs’ containers be separated from
the rest, or placed with other containers being
handled by rail.

The terminal relies upon the shipping company (not
the importer) to furnish information concerning the
nature of the containers on board its ship. If the
shipping lines know the final destinations of import
containers before the vessel begins discharging, and
can brief the terminal with that information, obviously
the terminal's computer will quickly assimilate the
information and organise the unloading sequence
accordingly. The matter was put to the General
Manager of Glebe Island Terminals Pty. Limited in a
question referring to a promotional document
distributed by that company ₍₁₈₅₎:

"COMMISSIONER:.. Opposite the heading
‘Computer Based Planning’ - where you
do mention a total of 26 categories of
information recorded for every container
passing through the terminal and that
seems to be available by either visual

185. Transcript 17/4/80, page 102.

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display or high speed printer. In the
context of this additional information
required (for) destinations.. in view of
the complexity of the material with
which the computer is required to cope,
would that additional requirement be a
problem?

GILBERT: I don’t think so. Certainly
it would be another category of
information.. It would require a certain
amount of reprogramming in a couple of
areas. I couldn’t claim that this was
a serious problem”.

The issue which must be addressed is whether it is
impossible or unreasonable to expect the shipping
lines to gather information about the destinations
of import containers in good time before the vessel
begins discharging. The Inquiry does not accept
that this is a significant problem.

5.2.2 The Practice of Quarantine

The Inquiry investigated the practice adopted by
Quarantine. Quarantine has an interest not only
in the goods themselves (which may or may not be
subject to quarantine) but the dunnage, and wooden
crates in which goods are sometimes transported.
The following is an extract from a publication by
the Australian Department of Hearth entitled "Cargo
Containers and Unit Loads” ₍₁₈₆₎:

"Experience over the years has
demonstrated that dunnage, especially
the heavier dimension timber, is a
particular quarantine hazard.”

The same booklet specified a procedure for FCL
containers. The procedure presupposes disclosure
of the final destination of the container to the
Quarantine officer. The immediate release of the
container is made conditional upon, inter alia,
‘the destination (being) within the Metropolitan
Area of the port of entry’ ₍₁₈₇₎. The requirement

186. Cargo Containers and Unit Loads - Quarantine Aspects
and Procedures, Australian Department of Health,
page 3.
187. Ibid., page 5.

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is not difficult to understand. Country areas
are vulnerable to diseases imported from overseas.
Quarantine officers are especially vigilant in their
examination of containers destined for the country.

Under the title "Follow-up Inspections" the
following appears ₍₁₈₈₎:

"Plant quarantine in Australia has
adopted a system of follow-up
inspections for a percentage of FCL
containers given immediate delivery."

These inspections and the disclosure of final
destinations, were the subject of discussion between
the Quarantine Department and customs agents acting
through the Cargo Facilitation Committee (a committee
set up to solve practical difficulties which arise
from day to day in the running of the port). The
minutes of the New South Wales Cargo Facilitation
Committee record the discussion ₍₁₈₉₎:

"Mr. Milburn (from Quarantine) was adamant
that his department could not allow
containers to enter the country without
some type of inspection being carried out.
The Quarantine requires that the correct
delivery address of all FCL containers was
required to be documented in order to
allow necessary random follow-up inspections
on containers given immediate delivery.
Unfortunately, some organisations do not
like to disclose the destination of a
container and this results in the delays
being experienced as mentioned by Mr. Day
(representing the customs agents)."

(emphasis added)

The ship’s manifest is made available to Quarantine
by the shipping company. The Inquiry was shown
examples. Certainly there are cases where the
importer’s address is given as a post office box
number or a Sydney head office address. The
Quarantine Office made it clear (as does the minute

188. Ibid., page 18.
189. Exhibit 132: Meeting No. 39 (20/3/79), page 4.

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which we have extracted) that they insist upon
knowing the final destination of a container. It
was obvious from the manifests we were shown that
they have been altered in many cases by the shipping
line, in anticipation of a requisition from the
Quarantine officers. In those cases where there
was only a Box number, the final destination was
inserted. The Quarantine officers confirmed that
unless they have this information they simply place
an impediment upon the container and it is put to
one side until the information is forthcoming.

It may be said that this does not advance the
argument very much further. Quarantine is really
only concerned with final destinations once the
vessel has discharged. The scheme suggested by the
Inquiry requires the information to be in the possession
of the shipping line before that time. It is obvious,
however, that the shipping line is conscious of the
requirements of Quarantine. It begins gathering the
required information at the first opportunity.

5.2.3 The Information is Known to the Shipping Line or Readily
Ascertainable

First, information concerning the destinations of
import containers will in most cases be either known
to the shipping company or readily ascertainable.
It will be known because there is usually an intimacy
between importers (or their agents) and the shipping
lines. Shipping companies court importers and make it
their business to know their requirements. In the
nature of things they would know exactly where their
factories are and exactly where the containers are
packed or unpacked. Indeed their ten largest clients
may make up 70% or even 80% of the number of
containers they carry. We are, therefore, talking about
the residue which could be 2o% or could be less ₍₁₉₀₎.

190. See transcripts Liner Services Pty. Limited 1/4/80,
     page 74 (Captain Manly); Customs Agents Association
     of New South Wates (Mr. D. Cable) 1/5/80, page 15;
     Australian National Line 14/4/80, pages 65-73.

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Secondly, even with the residue, the ship's manifest
and the shipping documents will, in most cases, provide
the destination. If they do not an enquiry can be made.
Captain Jensen of Seabridge Australia Pty. Limited
representing the Australian Chamber of Shipping made
the point in -this way ₍₁₉₁₎:

"JENSEN: The destination of most import
containers is generally known from
documents received by the shipping
company. They receive documents such
as consignee notifications and delivery
orders. Other people receive different
sorts of documents called different names
to do the same thing and they generally
indicate the final destination of the
container. When it isn't known the
shipping company then enquires. If they're
doing the transport they must know and they
enquire before they release the documents to
tell the driver where to go, so I find it
difficult to accept that it is not generally
known. I'd say it’s more the other way round.
It is more generally known the final
destination of a container than not."

There is a third reason for rejecting the suggestion
that the ascertainment of final destinations is a
significant burden. It is identified by Captain
Jensen in the passage above. The shipping line, more
often than not, is concerned to encourage the importer
to use its services (or those of its agents) in the
transportation of the container. Indeed, when
containerisation was first introduced in Australia
the shipping lines promoted a concept of door-to-door
delivery in which they were responsible for the entire
carriage of containers from one side of the world to
the other. That concept has taken root in various
countries overseas. It never caught on in Australia.
Importers, by and large, prefer to arrange their own
transportation.

Nonetheless, the shipping lines are still concerned
to maximise their share of the land transportation
task. The following evidence was given by Captain
Bosman on behalf of the Chamber of Shipping ₍₁₉₂₎:

191. Transcript Australian Chamber of Shipping,
13/4/80, page 60.
192. Transcript Chamber of Shipping, 13/3/80, page 7.

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"BOSMAN: Well prior to the vessel's
arrival the shipping company in
general contact the client and ask
him - they say "What means of transport?"
and he says, "I have my own transport,
or my customs agent has his own transport”.

COMMISSIONER: So the shipping company’s
agents in this country will telephone
the importer.

BOSMAN: Yes."

The fourth reason for rejecting the suggestion is
furnished by this passage. We are led to believe
that in many cases, if not most, the shipping
company is in contact by telephone with the importer
prior to the vessel's arrival. As captain Jensen
said above, if the shipping line does not know the
final destination of the container it can, when
making contact with the importer, enquire.

Finally, shipping companies will usually know where
the container is being delivered because the container
box is either its property or its responsibility
(leased from one of the international leasing
companies). Once the import container has been
unstuffed the importer is obliged to return it to a
depot nominated by the shipping company within 24 hours.
Rather like a billiard player the shipping company is
always thinking of the next move. It endeavours to
locate the container in a yard which is geographically
convenient to the exporters who will next use the
container. The transport company of the importer, on
the other hand, is anxious to minimise the distance he
is required to travel. Almost certainly he will
indicate where he is delivering the container so that
the shipping company can nominate a depot which is
compatible with its needs, and with the convenience of
the road transport company.

So what is left? We have established that usually
the shipping line through force of habit in dealing
with certain clients will know its requirements and

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will know the final destination of the container;
that if the requirements are not known they can
usually be ascertained from the shipping documents;
that where the shipping documents do not tell the
full story the destination can be obtained when the
shipping line enquires about the delivery of the
container; and where that is not done, or where it
is done impersonally by letter or computer printout,
the shipping line can make a separate enquiry by
means of a telephone call.

5.2.4 Difficulties Will Arise in Certain Cases

The Inquiry accepts that there are difficulties.
First, the activity of the shipping company (in the
course of which it may ascertain or confirm the
final destination) cannot really begin until the
shipping documents arrive in this country. On those
journeys which take a long time (the United Kingdom
which takes 20 days or more, and the United States)
that is not likely to be a problem. Even on the
shorter trades (for instance from Hong King and the
Far East) which take ten days or slightly less, the
documents are usually available in good time. The
position is different with the Japanese Trades. The
particular requirements of the Bank of Japan sometimes
delay the shipping documents so that they arrive with
the vessel itself.

Steps can be taken to overcome the problem. First, it
is a matter of educating exporters overseas as to the
requirements of Australia. That process has already
begun. We were furnished with certain material from
the Customs Agents Association of New South Wales.
The Australia-wide body, the Customs Agents Federation
of Australia, arranged a conference with a Japanese
delegation in which it made the requirements of
Australian Ports known. We acknowledge that the
entrenched procedures overseas are unlikely to change
overnight. Educating exporters cannot be looked upon
as anything but a long-term solution.

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There are short term expedients. This is, after
all, an electronic age ₍₁₉₃₎:

"GILBERT: There is no problem with the
Imports from Hong Kong. We believe the
problems when they do arise are almost
entirely confined to Japan and they’re
related occasionally to the Bank of
Japan.

COMMISSIONER: Of course telex is one
thing one would imagine could...

GILBERT: Of course there is no reason
why they shouldn't.”

Sizeable consignments of cargo are sent by air.
Documents must be available on this side of the
world very rapidly so that the cargo can be cleared.
Though there is a cost and an inconvenience created
by the unavailability of shipping documents, it does
not seem to the Inquiry an insuperable problem.

There are other difficulties, and they are not to be
underestimated. The New South Wales Road Transport
Association drew attention to certain importers for
whom the advance disclosure of a final destination
of a container would be either impossible, embarassing
or simply difficult ₍₁₉₄₎. Often an importer will
make arrangements to ship certain cargo to Australia
and negotiate the sale of that cargo whilst the vessel
is on its way. Sometimes the sale will be made before
the vessel arrives. Sometimes it will be made shortly
after the vessel docks. The final destination may
depend upon whether the indent importer is able to
clinch the sale before the container has to be moved.

In other cases the shipping line will know the
requirements of the importer, but those requirements
will vary from day to day. The importer may have a
number of stores or warehouses. The container is
despatched to whichever store or warehouse is in need
of the goods at that particular time.

193. Transcript Glebe Island Terminals Pty. Limited,
17/4/80, page 85.
194. Submission S.K/C 804 New South Wales Road
Transport Association, letter 10/4/80, page 7.

-196-

We do not underestimate the difficulties. We do
not believe that the scheme should flounder because
of those difficulties. Though there will always be
recalcitrant containers where the destination is
difficult to identify, the vast majority should be
handled with a minimum of fuss. Captain Manly from
Liner Services Pty. Limited put it in this way ₍₁₉₅₎:

"MANLY: 80% of containers shouldn’t
be an over great problem. Of the 20%
remaining, 10% would be a problem but
you should be able to overcome it. I
would think there would be quite a
problem with the 5 or 10%."

For the reasons we have given, we rather doubt that
the percentage would be as high as suggested by
Captain Manly. If it is that high when the scheme
is introduced, it is likely to be lower after a
period of education and adjustment to the require-
ments of the scheme.

Where the destination of the container cannot be
ascertained in time a presumption should operate.
It should be presumed that the container is caught
by the scheme. It will then be automatically railed
to either Chullora or Villawood at the option of the
shipping line. The onus is placed squarely upon the
importer to notify the shipping line before the vessel
arrives. It will be a simple matter for the shipping
lines to either tell importers of the scheme's
requirements (in those cases where personal contact
was made) or include a notice (by means of a stamp or
otherwise) in the document which notifies importers
of the anticipated arrival of the container. The
Notice would indicate that the importer is required
to notify the shipping line of the final destination
of the container ₍₁₉₆₎.

195. Transcript Liner Services Pty. Ltd., 1/4/80, page 74.
196. See the suggestion of Mr. Cleland of the N.S.W.
Road Transport Association, Transcript 18/4/80,
page 61.

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5.3 The Origin of Export Containers

At the present time only 13% of export FCL containers
(according to the STSG Survey) originate from the
western suburbs. Most exporters are located either
in the country or the Eastern zone (the city and
especially the Central Industrial Area).

In the nature of things there is direct contact
between the shipping lines and the exporter. The
exporter, or his agent, books 'space’ on a vessel
for a particular time. Since there is direct contact
it would be possible for the shipping line to enquire
where the container was coming from.

Ordinarily it would be unnecessary for the shipping
line to make that enquiry because the intimacy
between shipping companies and exporters is even
greater than in the case of shipping lines and
importers. The following appears in the evidence of
the Australian Chamber of Shipping ₍₁₉₇₎:

"COMMISSIONER: But how do you know
where he (i.e. the exporter) is and
where he is going to take those boxes?

JENSEN: We know where he is because
he is usually a regular shipper. We
know his area of operation. We go and
visit him.

COMMISSIONER: You do visit them?

JENSEN: Oh yes, we have marketeers
going around visiting all our exporters
on a regular basis because of the
competition. We have to keep a face to
face involvement with the shipper all
the time..We know where the container’s
going to, we know what ship he is booked
on, we don’t always know when he’s going
to send it to the terminal."

Evidence to the same effect was given by the Australian
National Line, culminating in the following question
and answer ₍₁₉₈₎:

197. Transcript Australian Chamber of Shipping,
13/3/80, page 77.
198. Transcript Australian National Line 14/4/80,
pages 65-66.

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"COMMISSIONER: So that in the case
of export containers, leaving aside
the whole issue of policing, and
people giving false information,
you would not anticipate any great
difficulty in imposing upon the
shipping company the requirement
that it does ascertain the actual
origin of the export containers.

DOWNES: No, no problem at all.

NEEDS: What my colleague said is
correct, we could easily identify
certain premises that pack containers,
but..cargo volume flow would be
impossible to really determine."

Determining the origin of exports will not, we
believe, pose a significant problem. At the time
the booking is made the shipping company can make
the appropriate enquiry. Where the export is coming
from the Western Suburbs, the shipping company can
simply direct the exporter to arrange delivery to a
nominated terminal (whether Villawood or Chullora)
by a certain date.

5.4 Sorting at the Terminal

The Inquiry accepts that the introduction of a scheme
will require additional handling and will require
additional sorting. It may even require additional
manpower. The Inquiry does not accept that this is
likely to significantly affect the turn-around time
of ships. It does not accept that operationally the
additional rail share imposes an insuperable problem.

5.5 Country and Interstate Containers

The STSG port survey suggested the following split
between road and rail in the carriage of intrastate
and interstate FCL containers:

8% carried by road

23% carried by rail

The Planning and Environment Commission and others
suggested that the intrastate and interstate FCL

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containers (the 8%) should also be diverted to
rail. The Inquiry takes the view that this is not
appropriate at this stage for a number of reasons.

First, the rationale for the scheme is the
environmental damage occasioned by container road
transportation. The PEC do not confine their scheme
to railing interstate or intrastate import FCL
containers to the Western Suburbs depot, from which
they could be picked up and taken by road. They
suggest they should be taken by rail for the entire
journey. But that rationale would disappear at the
perimeter of the Metropolitan Area, if not before.
On a country road the environmental impact of noise,
pollution and intimidation does not have the same
force.

Secondly, the proportion of containers which goes
interstate or intrastate by road is small. Rail is
the cheaper mode for long hauls and is used by most
importers and exporters (23% as opposed to 8%).
There are probably good reasons why the 8% choose to
use road. A cargo may be especially urgent. There
may be no loading or unloading facilities at the
destination. The goods may not be suitable for
transportation by rail. The destination may be
relatively close to Sydney (though outside the
Metropolitan Area) and remote from any rail facility.

For those containers with interstate destinations
there may be an additional reason for excluding this
trade. Section 92 of the Federal Constitution
provides that trade commerce and intercourse among
the states shall be absolutely free. It may be
suggested that a scheme which requires an importer
or exporter of interstate cargo to use rail, even
for environmental reasons, offends this section.
Queens Counsel retained by the Inquiry (Mr. Michael
McHugh, Q.C.) rejects that view. His opinion is
annexed (Appendix I).

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At this point in time it seems to the Inquiry that
the interstate and intrastate road trade should be
excluded. We have considered the possibility of
requiring portion only to use rail (going to
Western New South Wales or using the Western Roads
leading out of Sydney) but on balance we are
inclined to think that the 8% of interstate and
intrastate is better left out of the scheme
altogether. This aspect can be reviewed by the
Government at a later stage.

5.6 Empty Containers

5.6.1 Introduction

Should empty containers be included or excluded
from the scheme?

The question will be considered in three stages:

First, what environmental benefits
flow from their inclusion?

Secondly, what is the cost?

Thirdly, it the benefits are dubious
or the cost too great, is the scheme
compromised by empty containers being
left out?

5.6.2 The Environmental Benefits of Including
Empties

A container on the back of a semi-trailer looks no
different whether it is empty or full. It is still
a large steel box on a large vehicle. Environmentally
it is, perhaps, a greater hazard when empty than when
full. When it is empty it rattles. It may also be
unstable as the following passage makes clear ₍₁₉₉₎:

199. Transcript Liner Services Pty. Limited,
1/4/80, page 38.

-201-

"MANLY: I think an empty 40 foot truck
on the road, where the driver knows it
is empty, probably driving at more
excessive speeds, has less control
over it because it is under-balanced,
and is more of an environmental hazard
than a loaded truck.”

The same questions, addressed in the context of
Port Botany, arise:

What routes are trucks likely to use?

How many trucks are involved?

Empty container parks are heavily concentrated in
the Central Industrial Area and specifically South
Sydney. The STSG survey monitored the distribution
of empty containers in the course of its examination
of the Port. The following table reproduces the
result:

TABLE 22.

DISTRIBUTION OF EMPTY CONTAINER DESTINATIONS

AND ORIGINS GOING TO OR COMING FROM

PORT JACKSON₍₂₀₀₎

Local Government Area                %

Auburn                               5
Bankstown                            3
Botany                              15
Leichhardt                           7
Liverpool                            1
Marrickville                         7
Parramatta                           2
Randwick                             2
South Sydney                        53
Strathfield                          1
Sydney                               3
Country                              1

(Figures have been rounded)

200. Exhibit 114, STSG “Data Relating to Empty
Container Movements”, Table 3.

-201-

The survey sample was 1094 containers. The
result can be accepted with confidence because
it coincides with the location of empty
container parks.

TABLE 23.

SYDNEY (EMPTY) CONTAINER PARKS₍₂₀₁₎

Location                          Capacity

Conpark Pty. Limited
Auburn                               1,800

John Fletcher. Pty. Limited,
Glebe                                1,000

Johnstons Transport,
Alexandria                           1,200

Maritime Container
Services No. l,
St. Peters                           3,000

Maritime Container,
Services No. 2,
St. Peters                           1,500

Seatons Transport,
Camellia                             1,500

Sea Container Australia,
Banksmeadow                          1,400

Sydney Haulage Terminal
No. l, St. Peters                    2,400

Sydney Haulage Terminal
No. 2, Punchbowl                       500

Sydney Haulage Terminal
No. 3, Homebush Bay                  1,000

W.C.S., Camellia                     2,000

TOTAL CAPACITY                      17,300

There are a number of other parks with a capacity
of less than 1,000 containers.

The concentration of parks in the inner city
reflects the convenience of shipping lines. The
containers are more likely to be required there than

201. From information supplied by Liner Services
Pty. Limited, S.K/C 1425.

-203-

elsewhere. There is a surplus of containers in
the Western Suburbs which can be appreciated from
the following figures (based upon the STSG Survey)

Approximately 52,000 FCL import
containers will be destined for
the Western suburbs ₍₂₀₂₎

Approximately 13,000 export FCL
containers will come from the
Western suburbs ₍₂₀₃₎.

More than likely the shipping company will require
the import containers to be returned from the Western
Suburbs to the Central Industrial Area. The route
taken on the return journey from the Western Suburbs
may be different from the route taken when leaving
Port Botany for the west or south-west. (Bexley
Road, Harrow Road and Bay Street, Rockdale). The
trucks may find it more convenient to thread their
way through Marrickville. It will obviously depend
upon the particular container park nominated by the
shipping company.

5.6.3 Practical Implications of Including Empty
Containers in the Scheme

What would the scheme require? Wherever it was
necessary to transfer an empty container from the
Western zone to the East, or from the Eastern zone
to the West, the container would have to make the
journey by rail.

If an import container were sent to the Western
suburbs under the scheme it would travel by rail to

202. FCL imports (in the past) represented approximately
     39% of the total container throughput. If that
     percentage is maintained in 1985, and assuming a
     1985 throughput of 418,000 TEU, the import FCLs
     in 1985 will be approximately 163,020. 32%
     (52,166 TEU) represents the Western Suburbs
     component.
203. In the past FCL exports have represented 24% of
     the port throughput. Making the same assumption
     (418,000 TEU in 1985) the total FCL exports in
     1985 will be approximately 100,320, The Western
     suburbs component will be 13% of that (13,042 TEU).

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either Villawood or Chullora. It would be then
picked up by a road transport company and taken
to the importer. If the empty container was then
required in the Eastern zone (as is probable) the
truck driver would take the empty container back
to either Villawood or Chullora. From there it
would be put on rail to Port Botany or Port
Jackson as the case may be.

It could certainly not remain at Port Jackson.
There is not the space. It would have to be picked
up and taken by road to an empty container park.

The contrast is between the following movements:

the truck (having unstuffed the
container at the importer's premises)
driving directly from the Western
suburbs to the empty container park
in the Eastern zone

lifting the container off the back
of the truck at the empty container
park (one lift).

.. and the following:

the truck driving between the importer’s
premises and the decentralised depot at
Villawood or Chullora

the empty container being unloaded

the container being stored until the
train is available for it to be taken
to either Port Jackson or Port Botany

loading the container onto the train

the rail journey between the depot and
Port Jackson

unloading the container once it arrived

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storing the container until picked
up by its owner or lessee

a further lift onto the back of a
truck

a road haul to the empty container park

a further lift off the back of the truck
into the park.

The position is not likely to be very different at
Port Botany. Botany has greater storage space for
empty containers. The space is not unlimited. It
will probably not exceed 1,000 TEU per terminal.
The storage charges at Botany for empty containers
are likely to be substantially more than those
offered by the empty container parks. The empty
container parks do not have the manning scales which
apply under the waterfront awards. They are not
obliged to pay the same rates and penalties which
obtain on the waterfront.

5.6.4 Practical Difficulties in Including Empty
Containers

The Western suburbs surplus of containers does not
mean that it will be unnecessary to ever transport
empty containers to the Western Suburbs. It is done
at the present time, notwithstanding the surplus. It
will be done in the future. The need arises because
the empty containers do not, as it were, form a pool
which is available to all shipping lines. Particular
containers are owned or leased by particular companies.
Though there is a degree of cross-hire, occasions
will arise where a particular shipping company wants
a container in the Western Suburbs and does not have
any immediately available.

Secondly, special types of containers are required
by particular trades. The surplus may not include
the particular types of containers required. Captain

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Manly from Liner Services Pty. Limited put the
matter very well ₍₂₀₄₎:

"MANLY: An empty is not just another
container. Each shipping line has a
varying number of flatracks - containers
for wet hides, containers for bulk
cargoes, 8ft. 6in. containers, 8ft.
containers, insulated containers,
integrated refrigerated containers and
you can go on almost ad infinitum.
They have other containers they have
on lease and for their own reasons
they want to get back to special
destinations. So a container control
system is a pretty complicated system.
We more or less move containers as we
are told and we are not involved in
the intricate control of the shipping
company’s containers. Now just because
you may happen to have a certain number
of containers in one area, those
containers may not be suitable or
desirable for cargo that is going to
stem from that area."

Once it is conceded (as it must be conceded) that
it will be necessary to transport empty containers
from the Eastern zone to the Western zone,
absurdities arise if those containers are included
in the scheme. Would it be necessary to take the
empty container to the Port Botany terminal or to
Port Jackson to have it transported by rail to be
picked up at the other end? Quite apart from the
cost, a day at least would be lost, and environmentally
little would be achieved. There would still be a
truck journey from South Sydney to port Jackson or
Port Botany. The inner city area would still be
subjected to the movement of heavy trucks.

If an exception is made of empty containers moving
from the Eastern zone to the Western zone problems of
another sort arise. A class of containers is not
being exempted but rather a segment of one class. It
may be rather easier to police a scheme where empties

204. Transcript Liner Services Pty. Limited,
1/4/80, page 81.

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are excluded altogether than a scheme in which
some empties are included and others excluded.
We will deal with the question of policing
later in this Report.

Apart from the needs of a particular exporter at
a particular time, the shipping lines re-position
empty containers from time to time either to
accumulate a pool of containers where they expect
to need them, or for repairs and refurbishment.
If re-positioning moves are to be included in the
scheme where the boundary between zones is crossed
the same absurdities arise. Worse, environmentally,
little is achieved.

In the course of the Inquiry we had occasion to
visit the establishment of Liner Services Pty.
Limited. That company has a significant transport
division specialising in the carriage of containers.

It has a fleet of trucks and a number of sub-contractors
(owner-drivers). They work with two-way radio. The
work road for the following day is tabulated and an
attempt made to co-ordinate the operation so as to
minimise the number of truck kilometres and 'empty
running’. To the extent they are successful, the
environmental impact of container transportation is
minimised. There are many other companies organised
along similar lines.

Mr. Hart Krtchil of Liner Services Pty. Limited,
furnished the Inquiry with a document ₍₂₀₅₎ which
sought to demonstrate (in the context of a particular
example) that, the inclusion of empty containers would
generate a greater number of truck kilometres (and
consequently a greater environmental impact) than
their exclusion. The contrast, in the example, was
between 108 kilometres, if the Western Suburbs
Scheme included empty containers, and 54
kilometres if it did not.

205. Submission Liner Services Pty. Limited S.K/C 1425
document "Hypgthetical Container Movements by
Road Under PEC Scheme.”

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It was conceded in evidence that the example was
extreme ₍₂₀₆₎. Nonetheless, it does underline
that the inclusion of empties is environmentally
dubious. It adds a rigidity to the scheme it
could well do without.

5.6.5 Effect of Excluding Empties on Rockdale and
Bexley

What would be the effect upon Rockdale, Bexley and
Campsie? STSG made certain calculations at the
request of the Inquiry contrasting the scheme
suggested by the Planning and Environment Commission
(which included both empty and country and interstate
containers) and the scheme recommended by the Inquiry
(in which both these classes were excluded). The
figures were:

there would be a 47% rail share
under the PEC version of the
Western Suburbs option

there would be a 41% rail share
under the version recommended
by the Inquiry

under the PEC version the number
of trucks per day in Rockdale
would reduce to 26 per day (from
400 maximum)

under the Inquiry’s recommended
scheme the number would reduce
to 67 per day (from 400 maximum)

It is not possible (on the information we have) to
dissect the difference, (41 trucks) further, to say
which part is attributable to the exclusion of empties,
and which part flows from the exclusion of interstate
and intrastate containers.

206. Transcript Liner Services Pty. Limited,
1/4/80, page 42.

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It is plain from these figures that environmentally
the effect of excluding empties from the scheme
is not substantial.

5.6.6 The Cost of Including Empty Containers

The inclusion of empty containers in the Western
Suburbs scheme will add substantially to the cost
of the scheme.

If the scheme is confined to full containers the
cost per container is approximately $20 more than
the likely road charge. For that cost there is a
substantial benefit, namely the reduction of trucks
through Rockdale, Bexley and Campsie from 400 or
more (to adopt the STSG maximum figure) to 67
containers per day. If the scheme embraces empty
containers, the number of trucks is reduced by a
further 20 or so per day. Yet that small reduction
more than doubles the cost of the entire scheme.
It cannot be supported.

5.6.7 Does the Exclusion of Empty Containers
Compromise the Scheme?

It was suggested that if empties were excluded from
the scheme, it would be impossible to police.

We do not accept that argument. To the casual
observer an empty container may appear to be the
same as a full container. To a person (such as an
inspector) not casually observing the container but
endeavouring to distinguish whether it is empty or
full, the differences between the two are obvious.
You do not require x-ray vision eyes. First, a
truck carrying a full container behaves differently
to a truck carrying an empty container. Any truck
under load splutters and gasps as it moves off from
the lights, as it takes the weight of the load. It
sits differently on its wheels. It is liable to give
off more smoke and make more noise. Secondly, the

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container itself rattles when it is empty. The
noise resonates and is amplified by the steel box.
Thirdly, the type of truck used to carry an empty
container is often different to the type of truck
needed for the weight of a full container.

Once the container is stationary the differences,
are even more obvious. A full container is locked
with a padlock and seal. The door of an empty
container is simply shut and can be opened.

We do not believe that the exclusion of empty
containers from the scheme will make the task
of policing a scheme any more difficult.

The Inquiry is firmly of the view that at this
moment in time, when the scheme is being introduced,
empties should be excluded. If for any reason
(including policing) their exclusion causes
difficulties the matter can be reviewed.

There are certain further benefits in excluding
from the Western Suburbs Option both empty
containers and interstate and intrastate containers.
The Inquiry is concerned not to overload the
decentralised depots and specifically the Villawood
depot. Under the Inquiry's proposal Villawood’s
share would be reduced.

5.7 Road Transport

We have said already there should be no interference
with the road transportation of containers to or
from the depots.

It is our belief that the road transport industry
will not be disadvantaged by the implementation
of the Western Suburbs Option. First, the cost of
road transportation involves a ‘f1ag fall’ element
(see Table 12) ₍₂₀₇₎ where the importer or exporter is

207. Page 156.

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simply paying for the basic time involved in
stuffing or unstuffing a container (two hours) and
the time involved in attending the wharf or depot
{say half an hour). The cost does not increase
greatly with additional distance. Containers will
still be delivered by road. The distance the road
transport operators will be required to travel will
be less, but only marginally less. That margin is
of great importance from the point of view of the
environment. It spares the inner city suburbs and
it spares Rockdale, Bexley and Campsie.

Secondly, the repositioning of empty containers
(which often provides valuable backloading) will
continue to be exempted from the scheme and
therefore available to road transport operators.

Thirdly, the scheme will not confine the transport
task (unlike the State Rail option) in a few hands.
It will be available to everyone, including owner-
drivers.

5.8 Reaction of New South Wales Road Transport
Association

The New South Wales Road Transport Association
opposed the introduction of the Western Suburbs
Scheme. They recognised, nonetheless, the vast
difference between the State Rail Authority option
and the Western Suburbs Scheme. Their president
made the following statement ₍₂₀₉₎:

"MR. ALCOCK: If the question is: "Is
it possible”, of course it (the Western
Suburbs Scheme) is; it certainly is
possible. Now, in some respects it
will not affect the transport industry
very much. So that from our point of
View, we are looking at it objectively
from (the point of view) of commerce
as a whole, rather than as transport
operators, this is a vastly different
proposition to the PTC (now SRA). We
would view this proposal very differently
- from the PTC proposal.”

208. Transcript 18/4/80, page 65.

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5.9 Reaction of the Transport Workers’ Union

The scheme was outlined in the public hearings
to the Secretary of the New South Wales Branch
of the Transport Workers' Union, Mr. Quinn.
The relevant part of the transcript is as
follows ₍₂₀₉₎:

"COMMISSIONER: So in other words if
a scheme such as the PEC scheme
(i.e. the Western Suburbs Option)
were introduced, in which case your
members would still be required to
carry the containers from the inland
depot, you have no argument with
that proposition?

QUINN: None at all, provided our
industrial interests are safeguarded.

COMMISSIONER: And they would be
safeguarded, would they not, if
in fact there was no monopoly, as
it were, for particular transport
operators at the decentralised
depots at Chullora and Villawood?”

Mr Quinn at this point made his Union's attitude
to the State Rail Authority's suggested monopoly
by five transport operators abundantly clear.

We returned in due course to the Western Suburbs
Option and Mr. Quinn had this to say ₍₂₁₀₎:

"The proposition of going to an inland
depot, utilising the railway, I think
is quite sound - quite sound – I’m
not against that at all, but I am
apprehensive about what would happen
in Villawood with an increased volume."

The Inquiry shares Mr. Quinn’s apprehension
about Villawood and for this reason has
specifically recommended a number of
improvements in the area designed to minimise
the impact upon the area.

209. Transcript 5/5/80, page 15.
210. Transcript 5/5/80, page 19.

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6. SAFEGUARDS DESIRABLE UNDER THE WESTERN SUBURBS SCHEME

6.1 Introduction

If a scheme were introduced a number of safeguards
would be essential to protect the legitimate
interests of various parties.

6.2 Rail Duplication

6.2.1 Introduction

Two sections of track came under scrutiny:

the track between Canterbury
and the Marrickville loop

the Botany goods line (which
leads from the Marrickville
loop to the terminals)

A significant increase in coal traffic is anticipated.
The container traffic will share the same goods track
between Canterbury and the Marrickville loop. The
Inquiry was concerned to know whether the combination
of the two, together with other anticipated traffic,
may create capacity problems. The impact of coal
traffic was investigated by British consultants to
the State Rail Authority, Transmark ₍₂₁₁₎. The track
between Canterbury and the Marrickville loop has been
duplicated. It is an exclusive goods track. There
appears to be ample capacity even with the
anticipated coal traffic.

6.2.2 Submissions Express Misgivings Concerning
the Capacity of the Botany Goods Line

The Australian National Line doubted the capacity of
the single Botany goods line to handle the anticipated
traffic. Others expressed the same view. Captain
Jensen from the Australian Chamber of Shipping gave
the following evidence ₍₂₁₂₎:

211. Summary Report to the Task Force on the Long Term
     Strategy for the Export of N.S.W. Coal dated
     5/2/79 - An attachment to the submission by the
     State Rail Authority, S.K/C 208.
212. Transcript Australian Chamber of Shipping
     13/3/80 page 53.

-214-

"The question raised in our minds and
the Chamber's mind is how a single
unelectrified track (will handle) I
don’t know, 150,000 or 200,000 boxes,
something like that.. We can't visualise
the operation of one line handling that
number of boxes efficiently, bearing in
mind that you have peaks and troughs.
You can divide the total number of
trains by the number of days, or the
containers and get a figure of 12 or 15
trains a day, as an example. But then
you throw into the figure all the peaks
and the trough demands as a result of
industrial disputes.. and the fact that
trains won’t move every day of the week
and they won't move 12 hours a day through
the terminals and at 20 minute intervals..
It’s a fact of life. We see that the
railways is going to be asked to handle
20 or 30 trains a day in theory on one
track. Which to our minds is just
ridiculous frankly."

Before examining the complexities of track capacity
we will look at the recommendations made in the past
in respect of the Botany goods line.

6.2.3 The Sydney Area Transportation Study
Recommendation

The Sydney Area Transportation Study was completed
in 1974. It made a number of recommendations for
the upgrading of passenger and freight rail services.
In the context of the Botany goods line it proposed
a 'South Sydney line’ which would utilise part of
the track. Its recommendation, therefore, is not
exclusively related to freight. It was in the
following terms ₍₂₁₃₎:

"It is recommended that provision be made
for duplication and electrification of
the Botany goods line, between Meeks Road
junction and the Botany port area."

By way of justification for its recommendation it
said ₍₂₁₃₎:

213. SATS Volume 4, Chapter XX, page 12.

-215-

"Not only will this line have to service
the port area, but also industrial areas
around Botany, oil terminals and
refineries located in the area, Cooks
River goods yard and passenger traffic
along the proposed South Sydney Line."

Earlier it drew attention to limitations in the
Cooks River goods yard which may be assisted by
duplication. It said ₍₂₁₄₎:

"Another limiting factor (in the Cooks
River goods yard) is the amount of space
available. Freight forwarders consider
that the short length of rail sidings,
the restricted manoeuvring areas within
the yard and the need to load and shunt
in the same roads are handicaps to
expanded use of this yard... These
factors can be overcome. Rail access
can be improved to a sufficient standard
by duplication of the Botany goods line
from its origin near the Marrickville
loop to the Botany area, or at least
as far as the Cooks River goods yard.”

6.2.4 The Recommendations of the Simblist Inquiry

The Botany Bay port and Environment Inquiry was
completed in November 1976. It examined a proposal
to install a coal loader at Botany Bay as well as
certain other facilities including two container
terminals. Had the coal loader been constructed it
would have given rise to twenty-two coal trains per
day. In terms of train movements (trains in and
trains out) this would have amounted to forty-four
train movements per day. Commissioner Simblist
recommended against the establishment of the coal
loader. He recommended in favour of certain other
facilities including the container terminals.

Notwithstanding the rejection of the coal loader
proposal, Commissioner Simblist still favoured
duplication of the Botany goods line. His
recommendation was in the following terms ₍₂₁₅₎:

214. Ibid. chapter III, page 24.
215. Botany Bay Port and Environment Inquiry
paragraph 10.6.1.

-216-

"The P.T.C. (now the State Rail Authority)
proposed the upgrading, duplication and
electrification of the Botany line to
meet the anticipated requirements of
the Port. But, this was said to be
conditioned upon the installation of
the coal loader.

The P.T.C. estimated that the cost for
this work would be $11,141,000. Notwith-
standing this cost, the Inquiry considered
that these improvements should be carried
out with or without the coal loader.”
(emphasis added)

6.2.5 State Rail Authority Confident Concerning
Liners Capacity

The calculations of track capacity are complex.
No one who made submissions to the Inquiry, outside
the State Rail Authority, claimed expertise in this
area. Indeed they were anxious to disclaim such
expertise. The following, for instance, was said
by the Australian National Line ₍₂₁₆₎:

"We did an examination of this (i.e. track
capacity) in Melbourne and not being rail/
road operators we got into difficulty
because we are not sure where the loops
are, and the shunt loops on the line are,
and how many trains would pass. We find
it very difficult to estimate how many
trains a day they could do, bearing in mind
that we wanted a two and a half hour turn-
around at the terminal. So really what we
got down to was that they’re rail/road
operator; they have got to prove to us
(that they've got the capacity. They’ve
got to do the exercise or the evaluation
and give it to us to show that they can
do it." (emphasis added)

The State Rail Authority, at the Inquiry's insistence,
endeavoured to discharge that onus. The evidence
was not entirely satisfying and the statements made
not always reassuring. The following was said ₍₂₁₇₎:

216. Transcript 14/4/80, page 83-84.
217. Transcript 15/4/80, page 45.

-217-

"COMMISSIONER: I think you indicated
that you carried out an exercise in
which you made some calculations of
the capacity of the single track
between the Marrickville loop and
the Botany terminal.

McGRILLEN: What we looked at in that
particular exercise was if we suddenly,
today, were confronted with a situation
that we had to run our existing container
programme that operates to White Bay onto
the Botany line, in effect, as is, could
we handle the programme. We found that
we could. Sure, we didn't have such a
terrible lot of track space left by
virtue of the fact – remember these other
trains are still occupying the main line
for shunting requirements.” (emphasis added)

Later in the same day the following evidence was
given concerning the White Bay 'programme’ (218):

"McGRILLEN: We look to achieve an optimum
of nine trains to Chullora and three to
Villawood. That’s the biggest programme
we consider we can operate to those
terminals at the current time. We’re
never higher than nine. We say nine is
as much as we can achieve and they say
that that’s as much as they can give us
anyway in and out of their terminal at
Chullora. That's going 24 hours a day
basically."

The ‘Botany programme' will be greater than the present
‘White Bay programme'. Is the “track space”, therefore,
sufficient?

There will be important changes to the Botany track
which will expand its capacity. A total of three
master sidings are being installed, and automatic
signalling will cut down the journey time
significantly.

A further exercise was performed incorporating these
improvements. A train-control diagram was prepared
and submitted by the state Rail Authority as an
exhibit ₍₂₁₉₎. That exhibit is not reproduced in

218. Transcript ibid. page 55.
219. Exhibit 142.

-218-

this Report, since it is not meaningful except
to the specialist eye.

The conclusion derived from this exercise was
in the following terms:

"The diagram indicated that it is
theoretically possible to provide
twenty container trains to the Port
and back in each twenty-four hours..
based om the assumption that a train
can be loaded and unloaded at the
Port in two hours. The Commission
maintains that this is possible but
if the trains are not loaded and
unloaded in two hours the capacity
of the system is reduced."

The capacity of the line is dependent upon two
things:

the capacity of the track itself
(as amplified by the master sidings)

the capacity of the terminals -
train turn-around times

We will later deal with terminal capacity.
Confining our focus, for the time being, on the
capacity of the track, the State Rail Authority
documents are not always consistent. The
inconsistencies include:

the theoretical annual capacity
of the track was estimated on the
basis of 250 working days per year
originally ₍₂₂₀₎

in one document which accompanied the
train control diagram (dated 20/5/80),
it was assumed that the track would
operate 260 days per annum and the
annual capacity was calculated on
that basis

in the document providing a typical
train timetable and commenting upon
the train control diagram ₍₂₂₁₎ 300
working days per year were assumed.

220. SRA Submission S.K/C 298 document entitled
     "Rail Capacity from Port Botany".
221. Submission S.K/C 208 document "Train Control
     Diagram" showing the capacity of the rail
     section from Chullora to Botany.

-219-

There are other inconsistencies. We will refer to
some of them when evaluating the evidence. It
seems to us less confusing to make the analysis in
terms of the daily capacity of the line rather
than an annual capacity;

6.2.6 Factors Effecting Line Capacity

A number of matters affect line capacity. With a
single line between point A and point B, the capacity
of the line will depend upon the time it takes to
get from point A to point B. If it takes 30 minutes
the capacity of the line theoretically will be 48
train movements per day (being the number of 30-
minute time spans in the space of 24 hours).

The calculation is complicated by two matters. First
there is the contrast between theoretical capacity
and practical capacity. The State Rail Authority
works on the basis that practical capacity is 75%
of theoretical capacity. The inevitable delays and
operational instabilities which must occur in any
system are absorbed by the 25% discount. In the
example, the practical capacity of a single line
between point A and point B, where the journey time
was 30 minutes, is 36 train movements (being 75% of
48). This represents 18 trains to the terminal and
18 trains back.

The second factor which destroys the simplicity of
the calculation is the presence of the master sidings
along the track. The purpose of the master sidings
is described in the following passage (which refers
to the Train Control Diagram) ₍₂₂₂₎:

"The diagram is constructed assuming that
there are signals at Botany, Mascot and
Cooks River. This means that while the
train is between Botany and Mascot or
Mascot and Cooks River, no other train
can enter that section until the first
train has left the section.

222. S.R.A. Submission S.K/C 208, letter 24/7/80,
precis of Train Control Diagram, page 1.

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The object of the master sidings is for
trains to enter the section while other
trains are still in the section performing
shunting operations at various sidings
within the section."

Certain traffic which presently uses the Botany
goods line requires extensive shunting to make up
a full train. A waggon is collected from one area
and shunted somewhere else where it is hooked up
with another waggon and so on. Eventually a train
is put together. Before the master sidings were
installed the track could not be used by through
trains while shunting operations were being
performed.

Whilst theoretically it may be possible to put a
loaded container train into one of the master
sidings, to allow another train to pass, and to
increase the capacity of the track in thus way,
we gather that the sidings have not been installed
for that purpose. The following evidence was given ₍₂₂₃₎:

"McGRILLEN: Bearing in mind, of course,
that normally we wouldn't be putting
container trains into these particular
master sidings; that's not really
their function.

FENNELL: The point about the master
sidings is that we run a mixed goods
train on the Botany line to service
various industries on the line. Now
they currently take up a lot of track
space or track time if you like, but
when the new scheme comes in, they will
enter those master sidings and the container
trades going to Port Botany can pass them."

In short, for the purpose of calculating the track
capacity it was necessary, before the master sidings
were installed, to discount the practical capacity
even further to make allowance for the time occupied
in shunting operations. Once the master sidings are

223. Transcript S.R.A. 15/4/80, page 43.

-221-

available, that discount will no longer be
appropriate. The capacity of the track will
be largely determined by the time it takes to
move between point A and point B.

What is that time? The evidence is confusing
and contradictory. In a document provided by the
State Rail Authority, early in their evidence, it
is suggested that the single track can be
traversed by a train in 20 minutes ₍₂₂₄₎. This
is repeated in evidence where the following
appears ₍₂₂₅₎:

"FENNELL: We expect that we can put
one train through every 20 minutes;
that’s one train would go from Port
Botany through the Marrickville loop.

COMMISSIONER: Is that realistic?

FENNELL: yes.

COMMISSIONER: How many trains per day?

BELL: 72 on the basis of 24 hours per
day and one train every 20 minutes.”

Certain evidence was later given by Mr. McGrillen
from the operations Department of the State Rail
Authority. He said ₍₂₂₆₎:

"Actually to get from (the Marrickville
loop, which is where you depart from
the main passenger connection at
Sydenham, to (the) Botany Bay terminal
at the moment is a total time of 40
minutes one direction which would be
reduced by 10 minutes with the altered
signalling arrangement at Mascot which
requires the guard to de-train at the
moment and physically operate the changing
and the staff token and that type of thing.”

Later Mr. McGrillen also referred to 20 minutes ₍₂₂₇₎.

224. S.K/C 208 document entitled “Rail Capacity
from Port Botany".
225. Transcript SRA (then the PTC), 29/1/80, page 8.
226. Transcript SRA 15/4/80, page 39.
227. Transcript ibid. 15/5/80, page 42.

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Most recently a letter from the State Rail
Authority ₍₂₂₈₎ contained the following
information:

"Journey times on the Botany line:-

Marrickville-Cooks River: 15 minutes

Cooks River - Botany: 20 minutes

Botany - Port: 7 minutes”

The reference to ‘Cooks River' in this passage is
a reference to the Cooks River goods yard. To get
from the Marrickville loop to the Cooks River goods
yard only takes a matter of a couple of minutes.
On the basis of that passage it would appear that
the journey time, even with improved signalling, is
likely to be something of the order of 30 minutes
(or perhaps slightly less). Adopting that figure
and ignoring for the time being the effect of the
master sidings (if any), the relevant capacity
figures are:

theoretical capacity 48 train
movements per day

practical capacity (i.e. 75%)
36 train movements per day

6.2.7 The Anticipated Traffic Upon the Botany
Goods Line in 1985

In 1985 the following traffic will use the Botany
goods line:

industrial trains (servicing various
large factories in the area)

oil trains

the container terminals

There are some minor contradictions concerning the
number of oil and industrial trains. The most recent
letter from the State Rail Authority provides the
following information:

228. S.K/C 208, letter dared 19/8/80.

-223-

"Number of trains per day on the Botany
line at the present time is as follows:-

Cooks River to Marrickville:       15
Oil trains to Botany:               2
Oil trains from Botany:             3
Industrial trains to Botany:        4
Industrial trains from Botany:      3
Single engines to Botany:           1
Single engines from Botany:        1”

We presume that the 15 train movements to the Cooks
River goods yard should be ignored, because trains
can slip in and out of the yard whilst other trains
are journeying further down the track. With the
assistance of the master sidings the same may be
true of trains destined for Botany. It would appear
from this passage (ignoring the single engines) that
the number of movements for oil trains and
industrial trains is 12.

Is growth anticipated in these trades? The State
Rail Authority gave its view ₍₂₂₉₎:

"There is only expected to be one additional
industrial train using the Botany line in
1985. This will service a proposed siding
at the ICI plant at Botany. Any additional
oil or freight business can be accommodated
on existing services which are currently
under-utilised."

The number of trains to service the container
terminals is more difficult to calculate. Calcula-
tions of a theoretical kind can be made, which must
then be discounted because of the not inconsiderable
gulf between theory and practice.

The predicted throughput for Botany in 1985 is
273,000 TEU ₍₂₃₀₎. Under the Western Suburbs Scheme
the rail share is estimated to be 41% (112,000 TEU
approximately). On the assumption of a 250 day year
the following can be stated:

229. S.K/C 208, letter 19/8/80.
230. See page 65 of this Report.

-224-

448 TEU would be carried each day
by rail

each train has a capacity to carry
30 containers (either 15 cars with
a capacity of two containers each
or 10 cars with a three container
capacity)

accordingly, 15 train movements
would be required each day

That is the theory. In practice there would be a
greater number of trains for a number of reasons.
First, there are two terminals at Botany and they
each will have their own idiosyncrasies and opera-
tional requirements. They cannot be expected to
dovetail exactly with each other. A degree of
co-ordination between the two terminals can be
introduced by train scheduling, but the possibility
of mismatch and delay, which may waste time and eat
away the track capacity, cannot be overlooked.

Secondly, the calculation assumes that the trains
are fully loaded in both directions. Obviously
they are not. Imports substantially exceed
exports. The Botany figures are as follows:

rail imports 68,183 TEU; ₍₂₃₁₎

rail exports 41,852 TEU. ₍₂₃₁₎

If one takes the import figure (68,183 TEU) and
divides it by the number of operational days
(250), and further, by the number of containers
per train (30), the number of trains required for
imports would be nine. The number of train move-
ments, therefore, would be 18 (a train going to
the port and coming back from the port).

231. Exhibit 139; an adjustment has been made
     to the FCLs going to the Western Suburbs
     to take account of the 10% hazardous
     etcetera.

-225-

It is not even possible to assume that all import
trains will be full. Some will not. Where there
are not enough containers at one terminal to make
up a batch of 30 for a train load, the train will
move off with whatever number it has. It will not
go from one terminal to another to ensure that
there are no empty waggons.

There is another matter. It has been mentioned
already and is of the utmost importance in the
shipping industry. The shipping industry is
afflicted by peaks and troughs. To some extent
the railways must be in a position to accommodate
the peaks. It was suggested by CTAL that the
daily average throughput may be increased by half
as much again during a peak. If this is right,
and assuming 18 train movements per day, the
number of train movements for containers increases
to 27.

How does this figure compare with the calculations
made by the State Rail Authority? It is in fact
conservative. The State Rail Authority was obliged
by the State Pollution Control Commission in the
Inquiry into the CTAL terminal to furnish a statement
concerning the noise impact of trains. It retained
consultants. In the report prepared by the
consultants the following description is given of
the rail operation ₍₂₃₂₎:

"It is expected that there will be an
average of 16 train movements per day, 8
into and 8 out of the port. However, the
rail movements are dependant on ship
arrivals which occur with irregularity.
Therefore, it is expected that up to 28
train movements will occur on 2 days per
month and up to 36 movements on one day
per month...

The above estimates are based on rail trans-
portation being used to carry 30% of the
container traffic from the port. If the
percentage should increase then there will
be a corresponding increase in the number
of rail movements."

232. Report Louis A. Challis & Associates Pty. Limited,
"Noise Impact Statement for Rail Operations Within
the Port Botany Development”, 7/12/79, pages 1 & 2.

-226-

It was confirmed in evidence that the 1985 estimate
of the Botany throughput was used to make the
calculation ₍₂₃₃₎. Now 30% of the predicted 1985
Botany throughput (273,000 TEU) is 81,900 TEU.
The Western Suburbs scheme has a 41% rail share
or approximately 112,000 TEU. If the 16 train
movements are increased by one third (to take
account of the jump from 30% to 41% rail share)
the number of train movements necessary to move
112,000 TEU would be approximately 22 movements.

The consultants in the same passage refer to various
peak loadings. They exceed the figure suggested
by CTAL (1.5). Applying the CTAL factor to 22 train
movements, 33 train movements can be expected in
the peak.

Is it appropriate to simply add the container train
movements to the industrial and oil train movements
and contrast the total with the practical capacity
of the line? There seems to be some difference of
approach. The original calculations discussed at
length on transcript with the State Rail Authority
proceeded on the basis that it was appropriate to add
the two together. Having later been presented with
the train control diagram and with certain further
evidence from Mr. McGrillen, we rather doubt that
this is so. If the two are to be added together the
practical capacity of the track would be exceeded.
If they are not added together, the peak demands made
upon the track would still hover dangerously close to
the practical capacity. Even if the capacity were not
exceeded in 1985, it would not be many years
thereafter before it was exceeded.

If the evidence remained there we should think it
difficult to say that duplication was essential
(rather than desirable). The evidence does not remain

233. Transcript 27/11/79, page 12-13.

-227-

there. There are other f actors which persuade us
that duplication is essential. It should be
programmed to be completed by the year 1985.

6.2.8 Additional Factors Limiting Track Capacity

There used to be a number of level crossings at
various points along the Botany goods line. One
by one, with one exception, they have been eliminated.
The exception is Lords Road, Mascot. It has proved
difficult to eliminate. It is not possible to
elevate the road because of the adjacent airport.
It is not possible to depress the road because of
a major underground sewer. Until this conundrum
has been solved the crossing will remain. It will
be controlled by automatic gates. The road carries
a significant traffic volume. It may be difficult
in these circumstances (at least without some
delay) to utilise the crossing during peak hour
periods. The Inquiry was assured that a delay
factor had been built into the train control diagram.
Relative to the other factors referred to below, the
crossing is a minor matter.

The train control diagram emphasises that the capacity
of the track is dependant, to some degree, upon the
ability of the terminals to achieve a two hour turn-
around time for trains (unloading 30 containers from
a train and then replacing them with another 30 to be
taken out by rail). The following comment was made
by CTAL ₍₂₃₄₎:

“PLANT: We’ve given an estimate of
the train turn-around times. These
train turn-around times will only
be as good as the train schedules
that can be achieved..."

When trains are late, labour may wait around until
the train arrives. If there is a job available it
may be diverted to other jobs.

234. Transcript CTAL (Day 2) 28/3/80, page 56.

A survey was carried out at the suggestion of the
Inquiry by the State Rail Authority. We reproduce
that table in full as an appendix to this Report
(Appendix II because it is important evidence. It
is apparent from the survey that delay is the rule
not the exception. Blame for the delay cannot
always be placed at the door of the State Rail
Authority. In some cases the terminal is to blame.
In other cases delay is occasioned by waterfront
stoppages. The delay varies from 10 minutes to
over six hours. These delays operate to further
erode the capacity of the line.

The rail system does not operate like clockwork.
It seems to us the 25% discount between theoretical
capacity and practical capacity may be appropriate
for the operational difficulties occasioned by the
railway system itself. To those difficulties must
be added the operational difficulties inherent
within the terminals which complement the railway
system.

There is a further matter: it is one of some
importance. The public in its clamour for rail
can sometimes overlook the fact that there is an
environmental cost attaching to the transportation
of goods by rail. The cost is miniscule when
compared to the environmental cost of road transport-
ation. But the cost can be magnified, and magnified
considerably, if those who must pay the price do so
in the important hours between 12 midnight and 6 am.
Mr. Raymond Smith is a resident of Terry Street,
Sydenham. His home is adjacent to the Botany goods
line. He gave evidence before the Inquiry ₍₂₃₅₎:

"I will go home tonight and wake up twice
during the night because the trains stop
along that particular railway line. We
have two trains that go through during
the night. One of them comes through at
one o'clock at night. It stops exactly

235. Transcript 31/10/79, page 80.

-229-

opposite Terry Street which has 117
houses along it. It runs between the
Princes Highway and Unwins Bridge Road.
The community there is mostly migrant
and in a sense inarticulate.. I was
talking to Mr. John Fennell from the
P.T.C. (now the S.R.A.) who said one
million dollars worth of railway
signals would be put in before the end
of next year, which would mean the
trains would not stop every night,
twice a night. All this is encouraging,
but if most of the freight containers
move by way of rail in the future, we're
still going to be subjected to immense
amounts of diesel. I sit on my balcony
and look out and see the diesel trains
spewing out huge amounts of smoke and
debris..."

To function as a container terminal the Australian
National Line required approval under section 27
of the Noise Control Act. By letter dated 1/5/78
it was given approval. The following appears in
that letter ₍₂₃₆₎:

"We draw your attention to your company's
verbal commitment to schedule trains to
the hours of 7 am and 10 pm if possible,
thus minimising sleep arousal effects on
residents living in premises near the
train lines."

When CTAL sought the same approval it offered, in
its Environmental Impact Statement, the same sort
of reassurance. It said ₍₂₃₇₎:

"Rail transport will be a 24 hour
operation with a concentration in the
day and evening shifts."

In conducting the Inquiry into the CTAL terminal,
the State Pollution Control Commission obviously
assumed that the same conditions, which were the
subject of an assurance by ANL, would apply to the
CTAL terminal. The Report says ₍₂₃₈₎:

236. See Appendix A, Report S.P.C.C. extracting the
entire letter.
237. CTAL Environmental Impact Statement, page 17.
238. S.P.C.C. Report on the CTAL application
July 1979, page 28.

-230-

"The (State Rail Authority) will supply
trains with a horizon period of 24
hours when required by the Terminal
Operators. However, one week’s advance
notice will normally be given. Trains
will mainly be required between 6 am
and 10 pm on a seven day week basis.”

Later in the same report the S.P.C.C. made the
following comment on rail transport ₍₂₃₉₎:

"Noise from trains has been identified
as the major environmental concern of
this mode of transport. A noise impact
assessment of trains using the Botany
Line has not been carried out to date.
Bearing in mind local concern on this
issue it is considered a proper noise
survey quantifying the impact of future
rail traffic along the Botany Line be
carried out as soon as possible."

The noise impacL survey was carried out by Louis
A. Challis and Associates Pty. Limited. Their
report contains the same reassurance concerning
the period in which trains will be moved ₍₂₄₀₎:

"These train movements will generally
occur between the hours of 6 am and
10 pm with occasional operations outside
that period."

The S.P.C.C. having recognised that noise from the
Botany goods line was a problem, and having sought
and having been given an assurance that train
movements would mainly occur between 6 am and l0 pm,
it seems to us unfair, when calculating the track
capacity, to suddenly call in aid a 24 hour time
span. The track capacity should be considered on
the basis of the assurance given. We have already
demonstrated that even on a 24 hour basis the track
is hovering close to saturation. If the Traffic is
substantially confined to the period 6 am to 10 pm
(as it ought) the capacity must be open to doubt.

239. ibid., page 34.
240. Report Louis A. Challis & Associates Pty Ltd.,
ibid., page 2.

-231-

The calculation made by the State Rail Authority
makes no allowance for the demands which can be
expected (or which should be encouraged) from
the Bulk Liquids Terminal at the port. There is,
in addition, other port land adjacent to the
container terminal which may be developed in the
course of the decade. Rail ought to be in a
position to capture as large a share of the
market as possible. It ought not suffer the
inhibition of doubts about its capacity which
may arise if there is but one track.

6.2.9 Capacity of the Terminals

The Australian National Line and CTAL both took
the view that two hours was insufficient to road
and unload the train.

The terminals referred to a proposed railway
demurrage agreement. A penalty would attach to
a failure by the terminals to perform the loading
and unloading task within the following time frame:

1½ hours to load or unload 30 TEU

2½ hours for 60 TEU

2 hours for 45 TEU

The terminals submit that the state Rail Authority,
by this agreement, acknowledge that two hours is an
unreasonable period for the loading and unloading
of 60 containers. We do not agree. A demurrage
agreement is designed for a different purpose. The
time in the agreement is calculated according to
the formula: ‘what is a reasonable time and what
should be allowed on top of that for contingencies,
before a penalty is incurred’.

We are reinforced in our conclusion by the fact that
the Port Jackson terminals apparently manage a 2 hour
turn-around for a container exchange involving 60 TEU.
Although caution is needed before drawing upon the
productivity of overseas terminals, the following

-232-

observation in respect of the British experience
by Freightliners is of interest ₍₂₄₁₎:

"All major terminals are equipped to
turn-around i.e., to strip and reload
a train within 2 hours."

We have referred already to the interlocking nature
of the railways and the terminals. A snag in one
has repercussions in the other. While we believe
that the Botany terminals will be able to turn
trains around within 2 hours, their ability to
perform will depend, first, upon the performance of
the railways and the maintenance of train schedules,
and secondly, upon the productive time which is
available on each shift. The State Rail Authority
in its calculations assumed a 24 hour day. In fact
there are 3 shifts which total 23 hours:

the day shift is 8 hours
the evening shift 7½ hours
the night shift 7½ hours

The productive time on each shift is less than the
shift time. Certain calculations were made by CTAL.
The calculations take account of breaks under the
Waterfront Award and the time it takes for labour to
get to and from the amenities building ₍₂₄₂₎. On
this basis the productive time per shift was as
follows:

day shift: 5 hours, 45 minutes
evening shift: 5 hours, 15 minutes
night shift: 5 hours, 20 minutes

The productive time affects the number of trains
which can be turned-around in each shift. The
number of trains per shift affects the capacity of
the track.

241. Containers - Their Handling and Transport
Chapter 16, page 313.
242. CTAL Transcript (Day 2) 28/3/80, page 71.

-233-

6.2.10 The Cost of Duplication

The State Rail Authority was asked to provide an
up to date estimate of the cost of duplication
and electrification. The estimate is as follows:

Track construction      $2,968,000

Bridges                 $2,200,000

Signals                 $ 626,000

Total                   $5,794,000

If the track were also electrified the additional
cost would be $2,020,000 making a total of
$7,8l4,000.

We are not suggesting that duplication will be
needed tomorrow. Clearly it will not. It will
take approximately one year to carry out the
necessary work. In our judgement the work should
be completed by the end of 1985.

6.2.11 Electrification

The Inquiry is not persuaded that electrification
is desirable either environmentally or operationally.

Electrification was essential to service the coal
loader proposed for Port Botany. The coal for that
loader would have come from areas where gradients
are steep. An electric locomotive is essential in
that situation. Botany, and the track which
connects Botany with the depots, is flat.

The overhead wires necessary for electrification
could not be extended into the terminals themselves.
They would foul the masts of heavy fork-lift trucks
which move around the terminal. Electrification
would have to stop short of the terminal gate.
Small shunting locomotives would then push the trains
into the terminal to be loaded or unloaded.

It appears that the Chullora depot is not
electrified. The following evidence is given ₍₂₄₃₎:

243. Transcript SRA, 7/11/79, page 8.

-234-

"In addition one of the main depots,
that's the one at Chullora, it is
not electrified either, so that we
would have to change locos somewhere
in that region to take it into the
terminal, or we would have to pay
for the electrification into.. that
depot."

The section of track between the Marrickville loop
and the terminals is not the only section within
the Sydney Metropolitan Area not electrified.
There are many sections of the freight network not
electrified.

Environmentally the benefits are also dubious.
Noise arises principally from the clatter of steel
wheels upon steel rails rather than the diesel
engine. The following evidence was given ₍₂₄₄₎:

"McGRILLEN: And I suppose you could
take it from a pollution point of
view. There’s a small gain to be
made in electrification but let me
qualify that. Flat terrain at Botany
with a branch line locomotive doesn't
really create a tremendous (the way
I see it anyway from a layman's point
of view) pollution.

MIDDLETON: Noise, its differential
is of great significance?

McGRILLEN: ...Not straining at a
heavy incline or anything like that
going to Botany. Sure there's a bit
of an advantage there with electrified
movements."

Electrification may be thought desirable far other
reasons unconnected with the container trade. If a
passenger service incorporating the Botany line is
thought desirable (a matter which will be the subject
of comment in a separate report) electrification
would be essential. It is not essential for the
efficient carriage of containers.

244. Transcript 15/4/80, page 64.

-235-

6.3 Rail Capacity

We have said already that some operators expressed
satisfaction with the performance of the railways.
Others express marked dissatisfaction. A good
deal of hyperbole entered the discussion, as
appears from the following exchange:- ₍₂₄₅₎

"CAPTAIN JENSEN: The question...
in our mind (is) we cannot
understand how the P.T.C. is going
to make available so many
different rakes of trucks and
machinery in Port Jackson and Port
Botany to satisfy the individual
demands of the different depots.
They can't do it now efficiently to
our satisfaction...

CAPTAIN BOSMAN: There is a tremendous
shortage and you may quote me on
that...

COMMISSIONER: Has it been the subject
of complaint?

BOSMAN: Yes Oh yes

JENSEN: Over and over

MIDDLETON: Does this relate to wagons
or locomotives as well?

BOSMAN: Now locomotives, I can add to
that, the P.T.C. have officially told
us - me personally in meetings, that
they are short of 400 engines, and that
they cannot comply with the service
that they should comply with."

This passage was put to Mr. McGrillen from the State
Rail Authority (formerly the P.T.C.):- ₍₂₄₆₎

"McGRILLEN: Well I comment initially..
on the alleged shortage of 400
locomotives. I might tell you that our
current locomotive fleet consists of
(excuse me if I'm one or two out) 244
main line diesel electric locomotives,
39 x 46 class electric locomotive, 5
of the new 85 class electric locomotives.
They perform the major work of the system.
Supplementing that we have a total of,
I think, its 201 branch line locomotives..
so taking a line through that, there's

245. Australian Chamber of Shipping, transcript
13/3/80, page 93.
246. Transcript State Rail Authority 15/4/80,
page 69.

-236-

244 plus 44 plus 68..we haven’t
reached the figure of 400 yet to
perform our annual task of 33
million tonnes... and here's a man
telling us that we have a shortage
in excess of that rate. I rest my
case on that one."

Statements were made, nonetheless, which gave the
impression that the State Rail Authority does
find difficulty in meeting the demands made upon
it. Two examples will suffice. There are many
others. The first relates to the shortage of
waggons ₍₂₄₇₎:

"McGRILLEN: Waggons supply, yes.. its
fair to say that at the moment we have
a pretty critical problem with
container wagons; so much so that
we’ve had (to) supplement regularly
our container waggons with side waggons
that really weren't constructed for
that type of traffic but do as stand-
ins, some of which we have to hire
from other systems in effect to meet
our requirements but we do that."

On the subject of locomotives Mr. McGrillen had
this to say ₍₂₄₈₎:

"I suppose its probably fair to say
one of our biggest problems, and
I’m not confining it to containers
either, (has been) meeting our
commitments as far as locomotive
power is concerned. We have
certainly never had any surplus of
them particularly in our peak periods.
They are dictated to a considerable
(degree) by shipping requirements for
export of coal and export of wheat,
of course, which have to receive
considerable priority. "

It is essential that the State Rail Authority should
be in a position to dispel the doubts expressed by
private enterprise as to its capacity. It can
only do this if it has the necessary rolling stock
and locomotives.

247. Transcript SRA, 15/4/80, page 70.
248. Transcript 15/4/80, page 65.

-237-

Evidence was given about the number of container
waggons which were on order. Evidence was given
about the locomotives which would join the
Authority’s fleet in the near future. Orders
have been placed for locomotives and waggons
based upon certain assumptions and predictions
about the future demand.

We were concerned to find out the extent to
which the Western Suburbs Scheme would impose
upon the State Rail Authority a demand in excess
of that predicted. Notwithstanding a number of
sessions, and many attempts, we were never able
to obtain this information.

It is of the utmost importance that the State
Rail Authority address that issue. It must
furnish the Government with a statement which
sets out the following:

the rolling stock available at
present to carry containers

rolling stock on order for this
purpose

the assumptions which were made
at the time the order was placed

the short-fall, if any, between
the level of freight traffic anti-
cipated by those assumptions, and
a level which can be expected under
the Western Suburbs Scheme

what that short-fall means when
translated into waggons and
locomotives

The State Rail Authority must have the wherewithal
to carry the number of containers embraced by the
scheme.

-238-

When the assessment is made certain matters should
be borne in mind:

1. It is the firm view of the Inquiry
that the matter should be approached
on the basis of having spare capacity
rather than barely enough capacity to
get by. We are not suggesting that
lavish arrangements should be made.
We are suggesting that some allowance
over and above the bare minimum ls
essential if confidence is to be
inspired.

2. We have emphasised throughout this
Report that the STSG predictions are
estimates for which some variation
must be allowed. The scheme proposed
by the Inquiry would suggest a 41%
rail share for Port Botany and rather
less for Port Jackson because Darling
Harbour is not on rail.

3. We have said that we regard the MSB
estimate of 418,000 TEU in 1985 as
conservative. We are confident that
that estimate will be exceeded.

4. That estimate includes the coastal
trade of the Australian National Line.
We will recommend (see below) that
the coastal trade be exempted for the
time being.

5. We have recommended that a presumption
operate in respect of those containers
whose destination cannot be identified
when the ship is discharging. That will
add to the 41% rail share especially in
the beginning when importers are becoming
used to the scheme.

6. We will recommend (see below) a 6,000
TEU depot at the Port. This in unlikely
to make a substantial difference to the
rail share. It may subtract 1% from the
containers which would otherwise be
carried by rail.

These considerations suggest a series of additions
and subtractions to the estimates made by STSG.
What is to be subtracted, and what is to be added,
depends, to some extent, upon the policy decisions
taken by Government once this Report is in its hands.
We can do no more than draw the attention of the Govern-
ment and the State Rail Authority to the matters which
will affect the computation.

-239-

6.4 Depot Arrangements

6.4.1 The Chullora Depot (Seatainer Terminals Ltd.)

The Chullora depot is located on railway land with
an access road leading to Rookwood Road. Rookwood
Road, Chullora is a major arterial road. The
throughput at Chullora will not increase under the
Western Suburbs Scheme. It is not anticipated
that the scheme will give rise to any special
problem at that depot.

6.4.2 The Villawood Depot (Freightbases Pty. Ltd.)

The Villawood depot is not so happily placed.
Figure 7 of this Report is a reproduction of the
relevant page from the U.B.D. Sydney Street
Directory.

The depot has been identified on that map. It is
adjacent to the railway line, in Miller Road,
Villawood, near the junction of Christina Road, and
Waldron Road. We will describe the locale, and then
outline the measures which ought to be taken to
preserve the amenity of the area.

The depot is approximately 1.5 kilometres from the
Hume Highway. Miller Road is classified by the
Bankstown Council as an industrial road. It is, in
fact, substantially residential for approximately
one kilometre between the Highway and Koonawarra
Road.

Christina Road is parallel to the railway line and
links Miller Road with the Woodville Road. The
Woodville Road is a major arterial road giving
access to the Hume Highway at one end, and the
Parramatta Road at the other.

The continuation of Christina Road is Waldron Road.
Waldron Road has been classified as a light traffic
road by Bankstown Council. That classification met
with substantial opposition from the Transport

-240-

FIGURE 7.

THE VILLAWOOD DEPOT OF FREIGHTBASES PTY. LIMITED

-241-

Workers Union. Waldron Road is a convenient
by-pass (via Amy Street) to Joseph Street and
Rookwood Road. It is essentially a residential
road and one can well appreciate why the Bankstown
Council took the action it did.

The possible courses of action are these:-

(i) By far the best way to preserve the
amenity of the area is to confine heavy
traffic to Christina Road. It is an
industrial road with a railway line on
one side and factories on the other.
For some journeys it would require the
truck driver to detour. The distance
is not insubstantial although, in the
Inquiry’s judgement, it is not
unreasonable. The direct distance from
the Hume Highway to the Freightbases
terminal is approximately 1.5 kilometres.
The distance if one travels past Miller
Road to the Woodville Road and then via
Christina Road is approximately 3
kilometres further, i.e., 4.5 kilometres.

Not all trucks would be required to make
that detour:

Some would be coming from the
Paramatta area and would ordinarily
use Christina Road anyway.

Some would be coming from the west
travelling east.

Only those using the Hume Highway
coming from the east would be
required to make a more circuitous
journey.

Even with this segment, the empty
trucks could use Miller Road if
they wish (see below).

Only the trucks leaving Freightbases
carrying a full container should be
constrained to use Christina Road.

(ii) We have already mentioned the affiliation
between ACTA (the shipping line),
Freightbases Pty. Limited (operators of
the Villawood depot) and Actrans (a
transport subsidiary of ACTA). Under
this scheme a substantial number of ACTA
containers would no doubt go to Villawood.
A proportion of these would be carried by
Actrans. Since Freightbases Pty. Limited
stands to benefit from the Western Suburbs
Scheme, it should be enjoined to direct
(through its parent company, ACTA), that
drivers from Actrans use the Christina
Road route.

There is nothing unusual in that procedure
as demonstrated by the following questions
and answers ₍₂₄₉₎:

“MIDDLETON: Just on the question of
environmental appeasement, perhaps
Mr. Allison could advise you Mr.
Commissioner, in view of the fact
that Liner Services do in fact
carry so many road haul containers
within the Sydney region, whether
or not any instructions are provided
by Liner Services with regard to
routes which should be followed by
the Company's drivers when they are
in fact hauling containers.

ALLISON: Containers on roads that
are authorised for the weights that
they carry, they are also instructed
to avoid bridges and other hazards
which may do damage. In other
respects, no, we don’t unless we
have special client requirements for
delivery, make any special arrange-
ments for delivery routes."

249. Transcript Liner Services Pty. Limited., 1/4/80,
page 44.

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Later in the same transcript the following
appears ₍₂₅₀₎:

“KRTCHIL: Alexandria is fact, was
mentioned; that they may use a road
going through some shopping centres.
I think using Bunnerong Road if
I recall correctly. We could specify
the route to be taken by the drivers.
I cannot see any undue problem there.

ALLISON: No I can’t either.

KRTCHIL: We pay for the road haul
and we can specify the route to be
taken, yes.

MANLY: It’s in the best interests
of our company, of course, to cause
the minimum impact around that area.”

(emphasis added)

(iii) There are steps which can be taken to minimize
the impact of noise in that part of Miller
Road which is residential. A solution should
not be foisted upon the community without
consultation. It may prefer one course rather
than another. The possibilities are:-

(a) Noise barriers can be erected. By
means of landscaping and vegetation
they can be made quite attractive.
(involving approximately 72
properties estimated by the P.E.C.
to cost $170,000) ₍₂₅₁₎

(b) Provision for double glazing and
possibly air-conditioning to shut
out noise, if it is found out to be a
problem.

Noise insulation is provided as a matter of course
in the United Kingdom, the United States, much of
Europe and Japan. It is not yet available in New
South Wales. A start should be made. Should the

250. Transcript ibid., page 45.
251. Annexure to P.E.C. letter dated,24/7/80,
page 24.

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noise experienced in Miller Road be unacceptable
(and we think that unlikely because of the other
measures we have suggested) noise insulation or
noise barriers should be installed.

It should not be thought that this small step
will open the flood-gates. The installation of
noise barriers along Miller Road will not create
an entitlement elsewhere in the Sydney Metropolitan
Area, where noise levels exceed an acceptable level.
In the United Kingdom legislation, and elsewhere
throughout the world, a commencing date for the
benefit was nominated. Any public work commenced
after that date, which created unacceptable noise,
carried with it a right to compensation by way of
noise barriers or insulation. It is commonplace in
social welfare legislation to nominate a commencing
date. In the nature of things the commencing date
must be arbitrary. It is recognised that government
finances are not unlimited. It is better that an
injustice which is perceived is corrected for the
future, than not addressed at all.

At the present time Christina Road is inadequate in
a number of respects. First, the carriageway in
certain areas is narrow and in poor condition.
Secondly, the junction between Christina Road,
Waldron Road and Miller Road is not satisfactory
and trucks experience difficulty in moving from
Christina Road into Miller Road. The access across
the railway bridge and into the depot may also need
upgrading. The Inquiry recommends:

First, Christina Road should be
substantially upgraded. The cost
of that upgrading should be met by
the State Government rather than
the Local Council.

The Department of Main Roads and/or
the Traffic Authority should examine
the intersection of Miller Road,

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Christina Road and Waldron Road
to ensure that access from
Christina Road is adequate.

Access from the railway bridge
to the depot premises in Miller
Road should also be examined
with a view to making any
improvements which would
facilitate the use of the
Christina Road route.

The number of export containers from the Western
Suburbs is small (a total of 13%). The Villawood
share will be smaller still. Substantially all
truck movements will be empty trucks attending
the Villawood depot to either pick up a full FCL
import container or LCL cargo. If they are
picking up LCL cargo then they are unlikely to
create the environmental and emotional problems
to which container trucks give rise. In the case
of import FCL containers the empty truck could,
where appropriate, use Miller Road. Once loaded
with the container, it should be required to use
Christina Road

Such an arrangement operates, for instance, in
Glebe. The Fletcher empty container park is at
the end of Forsyth Street, Glebe, which is a
residential street. The Fletcher depot directs
trucks picking up empty containers not to use
Forsyth Street, but rather Miller and Taylor
streets which offer access to Pyrmont Bridge Road.

6.4.3 A New Depot in the Western Region

The Western Suburbs Scheme presupposes the
continued existence of the Villawood and Chullora
depots. Two other possibilities must be
confronted:

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First, what would happen to the
scheme if one or other (or both)
depots were, for any reason, to
cease operations?

Secondly, what should the Government's
attitude be to another operator
seeking to establish yet another
depot in the Western zone?

We will address each question briefly.

If both depots were to close it is the view of
this Inquiry that the Government should step in,
and establish, by tender, another depot. The
location of that depot would be a matter of some
importance. It would obviously need to be
connected to rail. It should have easy access to
the arterial road network (rather in the manner of
the Chullora depot, and unlike the Villawood depot).

What would happen if one depot closed? We are
confident that the scheme would survive. It would
very much depend upon which depot closed, and the
environmental implications for the other.

It may be regarded as somewhat unlikely that another
operator would wish to establish yet another depot
in the Western Suburbs. Mr. Jones, the National
Operations Manager of Freightbases Pty. Limited had
this to say in the course of his company's
submission ₍₂₅₂₎.

"JONES:.. Anybody who would be interested
in establishing a third depot might like
to consider buying one from one of the
existing operators first, because I am
sure that we would be quite interested
to talk to him, because the idea that a
depot business is a licence to print
money is so far from the truth that many
depot operators would be quite pleased
to review their present status. I might

252. Transcript Freightbases Pty. Limited, 16/3/80,
page 64.

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mention that earlier this year
Freightbases sold its depot in
Western Australia to S.T.L. as
part of a scheme to make things
better in Western Australia -
the depot business is not a good
business today. So anybody who
wanted to go into it would want
to have a good hard look at it
first."

Having had 'a good hard look at it’, should a depot
wish to establish in the Western zone, it should
not be discouraged from doing so. To some extent
the scheme provides a guaranteed income for the
existing depots. Competition between depots is
desirable in these circumstances.

Planning permission to establish a depot should be
conditional upon the depot having rail access and
proper road access to the arterial road network.

6.5 Evasion of the Scheme

6.5.1 Incentive to Evade the Scheme

There are a number of questions:

First, what are the disadvantages
of the scheme?

Secondly, are they sufficiently
oppressive to provide an incentive
to evade the scheme's requirements?

It is said that there are two disadvantages: cost
and delay. We have expressed the view that the
additional cost per container will be no more than
about $20. We do not believe that sum is
sufficiently large to provide a worthwhile incentive
for evasion. If the shipping companies absorb the
cost differential, and spread it across the entire
Sydney throughput there will be no cost difference
at all (indeed it will be cheaper because of a
shorter road haul). It follows there will be no
cost incentive to evade the scheme.

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We have analysed the question of delay ₍₂₅₃₎. We
believe that delay will be approximately one day
and should not exceed three days. The delay will
be far less than experienced when Port Jackson was
working beyond its capacity.

We do not consider there are other significant
disadvantages. Importers and exporters will be
entitled to use the Customs Agent and the road
transport contractor of their choosing.

6.5.2 The Possibility of Evasion Cannot be Ignored

We are not suggesting that the question of evasion
can be ignored. It cannot. There is a history,
which is not entirely happy, of road transportation
circumventing regulations of one sort and another.
The President of the New South Wales Road Transport
Association made the following statement ₍₂₅₄₎:

"ALCOCK: I think the transport industry,
as you probably recognise, is made up of
a lot of people that tend to circumvent
the law in various ways they regard as
legitimate and by that I mean they may
overload; they may not pay their road
maintenance tax; they may have avoided
the co-ordination tax when that was here.
There are a lot of individualists in the
road transport industry. Now I suppose,
you know, one should apologise for that,
representing the industry, but I am
telling you what I believe is a fact of
life."

The Department of Motor Transport was charged with
the duty of enforcing the Road Maintenance
legislation. Mr. Gannon, a senior officer of
that Department said in evidence ₍₂₅₅₎:

"As soon as you put down a law in these
areas people will do counter things,
and that's our experience and they’ve
never disappointed us. Their ingenuity
is exceptionally good. And with a lot
of them it is a game; a game they play
very well."

253. Page 182.
254. Transcript 18/4/80, page 71.
255. Transcript Department of Motor Transport, 12/5/80,
page 10.

-249-

We do not doubt that certain importers and
exporters may attempt to evade the scheme for
reasons which they consider sufficient. Measures
are necessary to deter them from doing so, to
detect transgressions when they occur, and to
inflict punishments which are appropriate.

No positive suggestions were made by parties
before the Inquiry. The Planning and Environment
Commission did not address the issue, apart from
one suggestion thrown out casually in evidence (to
which we will come to shortly). The State Rail
Authority made a perfunctory attempt to deal with
the problem ₍₂₅₆₎. Broadly it took the view that
policing was not a problem under the scheme it
proposed because the road transportation of
containers would be so tightly controlled,
concentrated as it was in the hands of five large
companies. The Terminal operators and the Chamber
of Shipping simply opposed any form of regulation.
It was understandably difficult for them to make
the imaginative leap required to presuppose regula-
tion in order to address the problem of evasion.
We were not told what would be the least obnoxious
form of policing from the industry's point of view.

This Report will suggest various ways in which the
scheme can be policed. The suggestions should not
be regarded as a prescription which must be followed
to enable the Western Suburbs Scheme to survive. If
the industry, through the Cargo Facilitation
Committee or through its various representative
bodies, is able to suggest a mechanism which will
ensure reasonable compliance with the scheme without
unduly burdening those concerned with the importa-
tion and export of goods, so much the better.

256. S.K/C 108 Answers provided to questions posed
by the Inquiry on 5/12/79.

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6.5.3 Difficulties in Policing a Scheme

It is not possible to perch an inspector or two on
the line of demarcation between the East and the
Western zone to stop container trucks crossing the
line. The border between the Eastern and Western
zone is not a major road. It follows local
government boundaries. They, in turn, either
follow geographic features, railway lines or major
roads.

Under the scheme proposed there will be, in any event,
container trucks legitimately crossing the line of
demarcation between zones. We have given elaborate
reasons for excluding empty container trucks from
the scheme. Trucks carrying empty containers will
therefore pass from one zone to another.

It cannot even be said that all full containers
are covered by the scheme. A number are not. We
have recommended against the inclusion (for the
time being) of intrastate and interstate containers.
We will, later in this Report, recommend that certain
classes of containers be exempt from the scheme.

The container box, moreover, is used for the transfer
of domestic cargo by freight forwarders. First, many
of the large freight forwarding companies have their
own containers which carry their own logo. They are
used throughout the Metropolitan Area and interstate.
No doubt they will from time to time cross the
boundary between the Eastern and Western zones.

Secondly, under the Customs Act a container box is
permitted to enter the country duty-free upon
condition that it is re-exported within a certain
period. Under Section 162A of the Act 'one
positioning move’ is permitted. The permission
extends to using the container for the transfer of
domestic freight. Shipping lines, for instance, re-
position containers from the East coast of Australia

-251-

(Melbourne or Sydney) to the West (Perth).
Freight forwarders negotiate with the Lines to
fill the empty containers being re-positioned with
domestic freight. The freight, in these circum-
stances, is carried at a discounted rate.

In the same way maritime containers being
re-positioned will cross from one zone within the
Sydney Metropolitan Area to another.

It would obviously be far easier if all full
containers were embraced by the scheme, so that
the passage of full containers from one zone to
another would be enough to indicate that the scheme
was being infringed. This is far from being the
case.

6.5.4 Certain Features of Containerisation which
Facilitate policing

First, the terminals deal with the shipping lines
and not with the importer. We have already stressed
that the shipping lines know their clients. They
make it their business to visit their premises.

It is the shipping company which conveys information
to the terminal to enable the terminal to unload the
vessel in the correct sequence. The unloading is
determined according to a rudimentary sorting
procedure which separates FCLs from LCLs, road from
rail, and so on.

Where the shipping line is dealing with a familiar
client the chances of evasion are slight. The
scheme requires the shipping line to ascertain the
final destination of the container. With a familiar
client the shipping line will know exactly where the
container is going.

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Evasion of the scheme presupposes two things:
first, a deliberate misrepresentation by the
importer as to the location of his premises;
secondly, that the shipping line conveys that
information, which it knows to be false, to the
terminal in furtherance of the nefarious purpose
of evading the scheme.

An importer is hardly likely to misrepresent the
location of his premises to the shipping line.
He would be well aware that the shipping line
knows his whereabouts and has visited his
premises. The fact that the shipping line must
join in the conspiracy to defeat the regulation
offers some guarantee that the scheme will be
implemented. It is one thing to ask a favour of
the shipping line for the sake of commercial
relationship. It is quite another to expect it
to aid and abet the breach of a regulation or
even become party to a criminal conspiracy. The
conspiracy would be very obvious and not difficult
to prove. The special relationship, from which
knowledge of the truth could be imputed, would
emerge from an examination of the association
between the importer and the shipping line. The
documents passing between the shipping line and the
terminal, and the records kept by the terminal,
would preserve the misrepresentation.

How often is the importer or exporter well known to
the shipping line? We considered that matter earlier
in this Report when we dealt with the suggestion that
it was impossible to determine the final destination
of an import container (or the origin of an export
container). The position is summarised by Captain
Jensen from the Australian Chamber of Shipping ₍₂₅₇₎:

"COMMISSIONER: Most of the people the
shipping companies are dealing with are
regular clients who have a regular trade?

257. Transcript 13/3/80 (Day 1) Australian Chamber
of Shipping, page 83.

-253-

JENSEN: Yes.

COMMISSIONER: Who require their service
periodically and whom the shipping
companies know reasonably intimately?

JENSEN: Yes.”

In a number of cases (it may be 10% it may be 20%)
the importer or exporter will not be known, or not
well known, to the shipping line. The shipping
line, in these circumstances, may unwittingly pass
on false information as to the location of the
premises to which the container is being despatched
or from which it is coming. It is primarily in
respect of those cases that some policing procedure
is required. For the rest, (the 80% or more) we
feel the scheme will look after itself.

There are other features of containerisation which
will assist the policing of the scheme. First, we
have said more than once that containers are highly
visible. They cannot easily slip away from someone
keeping them in view in a traffic stream. Secondly,
numerically the number of container vehicles is not
great, although environmentally their concentration
in certain areas and for certain periods of the day,
causes a significant impact. Thirdly, there are
constraints upon the hours at which containers can
be delivered. There is a need to stuff of unstuff
the container once it is delivered and ordinarily
that must be done in office hours. The port survey
indicated a concentration of road movements between
say 7.30 am and 2.30 pm.

Fourthly, each container has a unique number alloted
according to an international register. It is owned
by a shipping company or a leasing company. The
movement of it is tightly controlled according to
container management records, most of which are
computerised. As it moves from a container park to
an exporter, and from there to a terminal to be
shipped overseas, it leaves a trail of records like

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footprints in the snow. Its geographical path
can be accurately traced. Under previous schemes
(such as the Co-ordination Act) cargo being
transported between one point and another was
anonymous. Containerised cargo is different.
The container, with its unique number and accompany-
ing records, makes detection of any systematic
evasion easier.

There is a fifth reason. It is one thing to join
a conspiracy between two trusted parties. The
conspiracy to evade the regulation must involve at
least three parties - the importer (or exporter)
the shipping line and the transport operator. One
need not go beyond television drama to know that
it is unwise to leave so many witnesses to one's
wrong-doing.

6.5.5 The Recommended Policing Scheme

The essential features of the scheme recommended are
as follows:

A road transport driver when leaving a
container terminal should be obliged to
indicate to the gate-keeper his final
destination. The shipping document which
passes between them should be stamped
accordingly. The following stamps would
be needed:

Eastern Zone
Western Zone/Exemption
Country/Interstate

2. A road transport driver delivering a container

to the terminal should be obliged to make
the same declaration at the terminal gate.
The shipping documents should be marked
accordingly.

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3. The stamp should not only signify which
zone the container is destined for (or
coming from), it should record the date.
This would ordinarily be done anyway.

4. It sometimes happens that the goods within
an FCL container are destined for various
suburbs throughout the Metropolitan Area.
Some may be within the Eastern zone and
some within the Western zone. Where the
contents of a container, or part of the
contents, are to be unloaded in the
Western zone, it should be obligatory for
the container to be first despatched to
the decentralised depot where it can later
be taken by road (partly unstuffed) to
the Eastern zone. If this is not made
obligatory the scheme may be evaded by
dropping off a token parcel in the Eastern
zone before moving on to the West. To
partly unstuff the container in the Eastern
zone (even to remove a token parcel) may
be unlikely because it would involve
unlocking the container and breaking the
seal, and this may have implications for
insurance if it transpires (when the
container gets to the Western zone) that
goods are missing. This notwithstanding,
we are inclined to the view that the
contingency should be covered from the
outset to remove the temptation to side-
step the scheme by that device.

5. We have referred to indent importers who are
often scrambling to consumate a sale as the
vessel is being unloaded. Their success or
otherwise will determine the final destina-
tion of a container. The balance of
convenience may favour their nominating a
final destination in the Eastern zone and

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warehousing the container until the
contents are sold. Having nominated
the Eastern zone before the vessel
berths, what if the bargain is struck
and the purchaser is located in the
Western suburbs? The problem poses a
difficulty for the scheme. Strictly
the container is caught by the scheme
since its final destination is in the
Western suburbs, and it therefore should
go by rail. That situation lends itself
to a device which was the bane of the
Co-ordination Act - the 'dummy yard’.
If an exception is made for those cases
where the final destination is thought
to be the Eastern zone and turns out to
be the Western zone, the scheme could
be easily avoided. Dummy yards, within
the Eastern zone would become a growth
industry, and semi-trailers would pass in
one gate and out the other, on their way
to the Western suburbs.

The device can be avoided by simply making
it an offence to transport the container
from the Eastern zone to the West, or from
the Western zone to the East, on the same
day as the container passes through the
terminal gate (which is recorded on the
shipping document). To evade the scheme
it would be necessary to off-load the
container, warehouse it for one day, and
load it again the following day. The
inconvenience and the expense would be a
sufficient deterrent.

And what of the indent importer who, without
malice aforethought, has nominated the
Eastern zone and later sold the contents
to someone located in the Western zone?
There are three alternatives. He can direct

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the terminal (within the 3 day storage period)
to transfer the container from the road stack
to the rail stack. Alternatively the container
can be picked up and taken to a warehouse
within the Eastern zone for one night, and then
transferred to the West. Thirdly, if the
contents are especially urgent, the container
can be unstuffed in the Eastern zone and its
contents transferred to ordinary road vehicles
to be delivered to the purchaser.

It is recognized that taking any one of these
courses may involve further expense. We are
talking about a very small number of containers.
Unfortunately, to prevent the scheme being
thwarted, that expense must be suffered.

6. It should be obligatory for the truck driver
carrying a container to produce the endorsed
shipping documents to an authorised inspector
from the Department of Motor Transport (in
much the same way as it is obligatory for a
car driver to produce his license to a
policeman). Mr. Gannon, from the Department,
made the following comments ₍₂₅₈₎:

"The consignment notes are a particularly
important part of this, I think... A
consignment note plus the requirement
that they have to produce that to
authorised officers on demand, and that
should set the whole thing on a very
good basis.. I think that's an essential
side of it.. you can call (the shipping
document) anything you like so long as
it meets certain requirements; that it
describes the goods, it describes the
point of origin, the point of delivery,
it has the date on it, it would have who it
was consigned by I would think, and there
would have to be some part in the legisla-
tion that makes it essential that that be
produced and makes it an offence I’d say
against the driver if he commenced the
journey without it. We have struck that
under Co-ordination in the past. You ask
drivers for documents and they don't have
any, and it's very difficult to get over.”

258. Transcript Department of Motor Transport,
12/5/80, page 13.

-258-

7. Finally, it is desirable that importers
or their agents declare the final destina-
tion of the import container (or exporters
declare the origin of the export container).
Declarations, whether made to the Reserve
Bank (as to the value of the goods being
exported) or to Quarantine or to other
Government Departments (for instance in
respect of dangerous goods etc.) are common-
place when importing or exporting goods. We
are conscious of the undesirability of adding
to the paper burden already shouldered by
Customs Agents and those involved in the
importation and export of goods. Some
guarantee of the authenticity of the informa-
tion conveyed to the shipping line is nonethe-
less desirable.

It is not necessary that a separate declaration
should be made in respect of each container.
It would be sufficient if an importer or an
exporter made one declaration that all
containers imported by him were destined for
a particular zone. This device was employed
some time ago when the Waterside Workers’
Federation required an assurance to be given
that containers were being despatched to
importers employing union labour. One declara-
tion was made by the importer in respect of all
containers being imported.

An officer of the Maritime Services Board or
the State Rail Authority or some Government
Department (the Ministry of Transport) should
be designated as an authorised officer to
receive these declarations. If the requirements
of an importer or exporter varied from week to
week, it would be necessary to work out where
the balance of his trade lay (whether in the
Eastern zone or the Western zone) and to make
a declaration in the appropriate terms.

-259-

We believe that the additional paper work
involved in such a scheme is minimal,
the likelihood of evasion slight and the
burden imposed upon those involved in
shipping (whether as importers or
exporters, customs agents, road transport
operators, shipping lines or terminal
operators) certainly not onerous.

Collusion between road transport operators and
the terminals to defeat the scheme (by falsifying
documents and especially by falsifying the date
upon which the container passes through the gates)
is unlikely. The computerised records of the
terminal records the date and time at which a
container is picked up or received.

The scheme would be enforced by inspectors who,
from time to time, would follow container trucks
to the terminal (with the export container) or
away from the terminal (in a case of an import) .
If a container is seen in the Western zone and
the driver made a declaration that it came from
the Eastern zone the inspector would be in a
position to refute that declaration. If he declared,
the container came from the country or interstate,
the shipping documents, which he would be obliged
to produce, would readily give the lie to that
statement if it were untrue. Even supposing the
shipping documents had been fabricated (which
presupposes a lot of trouble for so small a benefit)
the unique number of the container when matched
with the shipping company, container park and other
records, is likely to disclose the true facts.

With import containers it is rather easier. An
inspector would simply follow the import container
to its final destination. For those who operate
on the windy side of the law, who may be tempted
to leave the Sydney Metropolitan Area by one of the
Western exits only to immediately return and make a

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delivery in the Western suburbs (i.e., border-
hopping), it may be necessary to conduct spot
checks from time to time (using the unique
number of the containers and shipping company
and other records) in the same way as the Customs
Department conducts a number of spot checks
throughout the year of re-positioning moves under
Section 162A of the Customs Act. The importer is
required to satisfy the Customs Department that
the information given concerning the re-positioning
move is accurate and the container has been duly
exported.

6.5.6 Detection of Evasion Assisted by Truck Routes

We will recommend later in this Report that for
sound environmental reasons container trucks should
be confined to designated roads which can better
withstand their weight and presence.

Apart from the environmental benefits, such a
proposal would assist policing of the scheme.
Mr. Gannon from the Department of Motor Transport
made the following comment ₍₂₅₉₎:

"The major difficulty (with the scheme)
is because the container truck isn't
confined to a selected route. If he
was, I could see that this could be
regulated fairly simply, but a container
truck can go anywhere that a motor car
can go, basically. That would mean that
you would need to have a spread of
inspectors virtually on a roving basis..."

Later in the same transcript the following appears₍₂₆₀₎:

"COMMISSIONER: You made a suggestion
earlier - not a suggestion so much as
a comment, that the policing may be
much easier if in fact there were a
designated road system for containers.
Could you expand upon that?

259. Transcript ibid., 12/5/80, page 4.
260. ibid., page 9.

-261-

GANNON: Yes that would make it a lot
easier because the system of roving
patrols could be put up on the other
places and of course a permanent patrol
on the main highway: whatever was
selected to see if an unauthorised truck
was using it. Where you have a single
route you can do something about setting
up an interception point that is satis-
factory, that it is not dangerous, that
doesn’t create a hazard, and manning of
it becomes no problem at all. To spread
that type of operation over a vast network
of roads which hadn't got any rhyme or
reason to it, is extremely difficult and
the effectiveness would be on a percentage
basis only that nobody could predict."

The specific suggestion which we have canvassed in
this Report was then put to Mr. Gannon for his
comment ₍₂₆₁₎:

"COMMISSIONER: It's been suggested that
Quarantine officers very often follow
particular container vehicles to their
ultimate destination, and thereafter
inspect the contents of the container.
Now, what about a system whereby containers
are actually followed by roving patrols
on a random basis, so that one could at
the end of the journey, out of harm’s way,
as it were, inspect the documents of the
particular operator?

GANNON: I anticipate that will be part
of the scheme. We've done that in the
past...."

The Planning and Environment Commission made a
suggestion that enforcement may be assisted by
having some form of magnetised sign which could
be placed upon the semi-trailer indicating to
the inspector and all the world, the destination.

We disagree. All semi-trailers at various stages
would be delivering containers throughout the
entire Metropolitan Area, so drivers would need a
complete selection of signs for use on appropriate
occasions. The temptation to use them on inappropriate

261. Transcript ibid., page 9.

-262-

Occasions, as a passport from one zone to another,
may be too great. Such a system is likely to
frustrate detection rather than assist it.

6.5.7 Inspectors from the Department of Motor
Transport

It seems to this Inquiry appropriate that inspectors
from the Department of Motor Transport should be
given the task of enforcing the scheme. The New
South Wales Police should, in addition, supplement
the Department of Motor Transport inspectorate
where appropriate ₍₂₆₂₎. An assessment should be
made by the Department of Motor Transport of the
manpower required.

We reiterate, on the question of manpower, that the
scheme is unlikely to involve extensive policing.
First, we have said already that the association
between shipping lines and their clients should
ensure that no attempt is made in the vast majority
of cases (over 80%) to evade the scheme. We are
dealing with the balance which will be substantially
less than 20% in the judgement of this Inquiry.

It may be necessary from time to time (by way of
deterrent) to operate out of hours. By and large,
however, it will be sufficient if the roving inspectors
operate during ordinary office hours. The marginal
gain (if any) in evading the scheme is likely to be
swallowed up in the penalty rates payable by an
importer or exporter stuffing or unstuffing a
container in the evening or night shifts.

262. See the comments of Mr. Gannon transcript
12/5/80, page 22-23.

-263-

6.6 Exemptions Under the Scheme

6.6.1 Inadequacy of Information

The Inquiry is not in a position to make a
worthwhile recommendation concerning the exemptions
which should be made to the Western Suburbs scheme.
Clearly some containers should be exempt, either
because they are not suited to rail, or because
the depots are not equipped to deal with them.

The White Bay terminal exempts certain containers
from the rail transfer to Chullora. The Inquiry
asked Seatainer Terminals Limited to indicate
what the exemptions were. Its reply was as follows ₍₂₆₃₎:

(a) highly hazardous containers

(b) 40 foot containers

(c) over height/over width containers
which cannot be transported by
rail due to limitations imposed
by bridges, tunnels, etc. on the
rail system."

Containers 40 foot in length are sometimes carried
by rail. We rather gather that Seatainer Terminals
exempts these containers because they cannot be
lifted by the equipment at Chullora.

The parties before the Inquiry were invited to submit
a list of appropriate exemptions ₍₂₆₄₎. They failed
to do so. Their failure is entirely understandable.
All but lawyers place a premium on sincerity, and
find it difficult to argue in the alternative. To
submit a list of exemptions presupposes a scheme,
whereas the parties steadfastly opposed the introduction
of any scheme.

The State Rail Authority is in a different position.
It advocated a scheme. It did not, however, furnish

263. S.K/C 953 Seatainer Terminals Limited, letter
dated 29/7/80.
254. For instance ANL transcript 14/4/80, page 95.

-264-

the Inquiry with material on this issue ₍₂₆₅₎.

The Inquiry is left in the position of having no
satisfactory evidence. There were vague sugges-
tions that refrigerated cargo was unsuitable for
carriage by rail. Yet the railways carry
considerable quantities of refrigerated meat each
year. There were suggestions that glassware and
other fragile commodities should be exempted.
Again, we were reminded that the railways carry
many thousands of tonnes of glassware each year.

We are not inclined to think that urgent cargo
per se should be exempted. All cargo being
exported or imported is more or less urgent. We
recognise, nonetheless, that there should be some
flexibility. Each of the terminals (and specifi-
cally Seatainer Terminals with forced rail)
acknowledge that emergency situations do arise.
There ought to be a procedure where, in an
emergency, application can be made to a nominated
officer within the State Rail Authority or the
Maritime Services Board, on affidavit, to exempt
a particular container (identified by its number
from the scheme so that it can be plucked from
the system and handled expeditiously.

We recommend that the State Rail Authority, the
terminals, the Australian Chamber of Shipping and
other interested organisations should be invited
to submit a list of exemptions within a specified
period and support that list (where they feel it
is appropriate) with a short statement outlining
the reasons for the exemption. The list of
exemptions should be kept short, both for the
sake of simplicity, and to ensure that the environ-
mental benefits, which this Report has sought to
promote, are not jeopardised.

265. See Transcript 15/4/80, pages 19 & 22 and
transcript 2/5/80, page 11.

-265-

Whatever the exemptions, they should each be
defined with precision.

6.6.2 The Coastal Trade

The Australian National Line is the trading name of
the Australian Shipping Commission. The Commission
is a body corporate established by the Australian
Commission Act 1956 and is wholly owned by the
Australian Government ₍₂₆₆₎. The Australian
National Line operates an overseas service and a
coastal service around Australia.

It was said by the Australian National Line in
evidence that because of the peculiar nature of
the coastal trade, it should be exempted from any
scheme.

That claim was also made before Commissioner Simblist
in the Botany Bay Port and Environment Inquiry.
That Inquiry was considering a proposal not dissimilar
in many ways from the Western Suburbs Scheme. The
following was said by Mr. Alty who was then the
manager of the Australian National Line Terminal ₍₂₆₇₎:

"MR. ALTY: The other thing is, that
this sort of alteration to the modus
operandi just could not be introduced
on coastal trades. As mentioned earlier
on, the destination and origin of that
cargo is frequently for freight forwarder
depots. They are road oriented and the
additional cost of such distribution
(i.e., via the decentralised depots)
could, in fact, put the coastal trade
out of business. Competition is now
close between road, rail and shipping."

The passage highlights certain features of the
coastal trade. First, part of the trade comes
from freight forwarders. The way in which they
carry on their operation is described in the
following passage ₍₂₆₈₎:

266. Containers Their Handling and Transport Chapter 18
Roll-on/Roll-off “The Australian Scene”, page 349.
267. Transcript Simblist Inquiry 7/10/76, page 12.
268. Transcript ANL 14/4/80, page 45.

-266-

"BRYANS: ..In the coastal sector 90%
of the cargo is received the day the
ship is in and in fact about 40% the
afternoon when the ship is sailing at
5 o'clock and evidently these ships
are only in one day.. A major proportion
of that (trade) would be (received)
after lunch time.

COMMISSIONER: Why would that be?

DOWNES: It’s a freight forwarder
operation, therefore every freight
forwarder is keeping a multitude of
containers open as the cargo is still
coming in and since he's only got a
weekly service he's obviously going
to try and keep his containers open
to the very last minute.

BRYANS: I don't think the rail could
cope with that in its present form,
unless the whole coastal shipping of
containers is altered."

Later in evidence the point was amplified ₍₂₆₉₎:

"BRYANS: The ship is invariably in for
one day. They are smaller types of
ships. They are faster operations so
freight forwarders deliver the day the
ship is in. 90% of the cargo and a
large percentage in the afternoon of
sailing day - the cargo is received and
loaded virtually in the one move.”
(emphasis added)

The introduction of a compulsory rail haul from
the Western suburbs (in the case of exports) would
certainly disrupt that sort of operation. We are
not convinced that it would greatly affect an import
operation.

There is a second feature of the coastal trade which
is referred to by Mr. Alty in the passage which we
have extracted: the competition between
transportation and other forms of transportation.
The point is underlined in the following passage ₍₂₇₀₎:

269. Transcript ibid., page 107.
270. Rendel and partners Ports and Urban Systems,
February 1976, page 35.

-267-

"..There has been a decline in the
proportion of coastal trade to total
trade reflecting the competitiveness
of land transport modes for an
increasing number of interstate and
intrastate commodity movements.
Associated Steamships claim that the
company cannot compete with the
railways in the transcontinental
general cargo trade is further evidence,
and ANL’s recent hike in freight rates
will encourage this trend. Coastal
traffic is thus becoming increasingly
oriented to the liquid and dry bulk
trades...”

The rivalry between the State Rail Authority and
the Australian National Line for the coastal trade
was acknowledged by the State Rail Authority ₍₂₇₁₎:

"MIDDLETON: But I think you have already
agreed that you are the most serious
competitor to ANL in its coastal general
cargo trade...

BELL: Yes I do agree.

MIDDLETON: And in fact the competitive
nature between yourselves and ANL for
that trade is finely balanced in terms of cost?

BELL: Yes."

In these circumstances the Australian National Line,
understandably, manifested some reluctance to entrust
its destiny to its main competitor.

There are other features of the coastal trade which
set it apart. Much of its cargo is unitised rather
than containerised and even where containers are
used they are often 16 ft. 8 in. (being a multiple
of the standard cargo pallet) rather than the
international standard 20 ft. unit ₍₂₇₂₎. The Botany
terminals design reinforces the distinctive nature of
the coastal trade. It is described by the Terminal
Manager in the following words ₍₂₇₃₎:

271. Transcript 15/4/80, page 13.
272. Containers - Their Handling and Transport,
ibid., page 351.
273. Transcript ANL, 14/4/80, page 108.

-268-

"PEGGRAM: I'd like to put on record..the
terminal layout that is designed does not
cater for a coastal movement by rail and
the coastal operations have been put away
in one corner, not to interfere with the
overseas operation. Should there be any
suggestion that coastal moves by rail, then
it would cause significant operational
problems within the terminal area, to
the detriment of the overseas trade."

We inspected the Australian National Line terminal.
The berth servicing the coastal trades has its own
entrance and is set apart.

The coastal trade is certainly 'interstate trade'
and entitled to the protection of Section 92 of
the Constitution. However, the scheme would not
infringe that section in the Inquiry's view.

What would be lost if the coastal trade were exempted?
First, the vast majority of the freight forwarders
who use the Australian National Line Service are
located in the immediate vicinity of the port.
Although they would have been affected by the State
Rail Option, they are not affected by the Western
Suburbs Option. The Australian National Line was not
able to tell us whether any freight forwarders, or any
of significance, were located in the Western suburbs.

Secondly, a substantial segment of coastal cargo is
apparently sent to Lysaght's in Port Kembla ₍₂₇₄₎.
Under the scheme proposed by the Planning and
Environment Commission, in which country containers
were included, that cargo may have been caught by
the scheme. The Inquiry has taken a different view.
It has exempted country and interstate containers.
Accordingly, this segment of the trade would not be
embraced by the scheme.

What is left? We were not told in evidence. We
suspect very few containers would be caught by the
scheme. It does not seem to us that the scheme will
be seriously compromised if a blanket exemption is
given for the coastal trade. The shipping documents

274. Transcript. ANL, 14/4/80, page 14.

-269-

and the records of the Australian National Line
will prevent that exemption being exploited as
a general means of evading the scheme. The
matter can be reviewed if abuses occur.

The Inquiry is therefore inclined to the view
that the coastal trade under the Australian
National Line should be exempted from the scheme.

6.7 Container Truck Routes

6.7.1 The Effect of the Western Suburbs Scheme

The Western Suburbs Scheme addresses only part
of the environmental problem. It is primarily
directed to container traffic which uses Bay
Street, Rockdale, Harrow Road and Bexley Road
and other roads within the Western and South-
Western areas of Sydney.

The remainder of Sydney, and specifically the
Central Industrial Area, will still be subjected
to the transportation of containers by road.
Regrettably, as this analysis has shown, there
is no practicable alternative. The State Rail
Authority option, which sought to regulate the
transportation of containers within the Central
Industrial Area, created as many environmental
problems as it solved.

Something can, nonetheless, be done. Container
trucks can be confined to certain designated
'truck routes’.

6.7.2 The Principle of Truck Routing

The principle of truck routeing is universally
applauded. The State Pollution Control Commission,
when enquiring into the CTAL terminal, posed the
following question to the Department of Main Roads
and received the answer which appears below ₍₂₇₅₎:

275. Submission DMR to the SPCC responding to
SPCC letter 9/5/79 (re: Proposed Container
Terminal of CTAL at Port Botany).

-270-

"S.P.C.C.: Does the Department (of Main
Roads) consider that through container
truck traffic should be encouraged to
use designated roads, particularly
within municipalities adjacent to Port
Botany, to ensure that associated heavy
vehicle traffic does not use local roads
or cause environmental damage.

D.M.R.: The encouragement of all heavy
vehicle traffic to use designated roads
is consistent with the concept of a
functional road hierarchy. This concept
has the acceptance and active encourage-
ment of both the Department and the Traffic
Authority, and Councils (including Botany
and Randwick Councils) are being encouraged
to adopt it."

Not withstanding the esteem in which this principle
is held, progress is slow. The following was said
in 1976 and the same could be written today ₍₂₇₆₎:

"The development of freight road networks
is overdue in Australian cities and major
research and development programmes are
warranted on the basis of both reducing
costs of goods distribution and minimising
urban impact."

The State Transport Study Group examined the issue
in 1978 in a publication "Trucks and Through Traffic
Routeing: Inner City Study Area" ₍₂₇₇₎, using a
computer model which simulated traffic movements
during the two hour a.m. peak. We will examine their
findings shortly. A member of the study group
commenting upon the study made the following observa-
tion ₍₂₇₈₎:

"Truck routeing is only one solution to
the conflict between trucks and the
environment. It is comparatively
inexpensive to undertake and has currency
in the Sydney situation.”

(emphasis added)

276. Rendel & Partners "Ports and Urban Systems" –
     The Study of Sea Ports/Land Use Interaction
     February, 1976, page 17.
277. UTSG (Now STSG), August, 1978.
278. R. Leavens “Inner Sydney Truck Route Study”
     Fifth ATRF Forum Papers, page 60.

-271-

6.7.3. What Routes Should the Trucks Follow?

The State Transport Study Group tested a number
of alternative networks. It assessed the
performance of each. It had this to say, for
instance, about confining trucks to the main
and secondary roads (279):

"If in the extreme case all five
Councils (in the inner area of
Sydney) in the study area applied
and received permission to close
all local roads to every form of
through traffic, it is demonstrable
that the main and secondary road
system could not cope

Artificial barriers to meet with
travel demand far in excess of
capacity would be thrown up across
the study area. The same truck
trips as in the base case would take
58% more time and all traffic would
need to use 41% more time. No
possibility for diverting around
the congestion would exist; trip
distances would be less than 2½%
longer."

The Group then tested what they termed 'an
intermediate road system’ in which the main and
secondary roads were supplemented by certain
strategic local roads. It said ₍₂₈₀₎:

"It is impossible to believe that a
system with all through traffic
on main and secondary roads would
operate without a terrific uproar
and irresistible pressure to amend
it. Rather than scuttling completely
the concept of full traffic restric-
tion it is possible to apply it to
an intermediate road system."

The result was encouraging ₍₂₈₁₎:

"Road performance under such a scheme
is quite acceptable. The extra roads
offer a greater opportunity for trucks
to divert and minimise the travel time
penalty (they travel 3% further than

279. STSG Study ibid., page 5.
280. ibid., page 6.
281. ibid., page 5.

-272-

in the base case but take less than
2% more time). Capacity problems
cannot be expected to arise for the
same reason listed above."

The Group stopped short of recommending that the
'intermediate road network' should be adopted as
a truck network. It emphasised the need for
consultation with Local Council's and residents.

Consultation is obviously important. The New
South Wales Road Transport Association made the
following comments in evidence before the Inquiry ₍₂₈₂₎:

"ALCOCK: Mr. Commissioner, we understand
the traffic management is now a fact of
life. We understand also that Transport
Minister, Cox has made certain suggestions
with regard to traffic management in
Botany Bay which we, too, would regard
as being - and we would act responsibly
toward them. We have, however, over the
years, had some problems with unilateral
decisions being taken by Local Councils
to close off certain streets without
consultation with us. This has resulted
in some confrontation between mainly the
Transport Workers' Union and the local
councils. Ashfield comes to mind. So
that our official attitude really is that
traffic management is really necessary,
and perhaps will become more necessary,
but that our industry should be consulted
and a unilateral decision should not be
made by various statutory bodies without
consideration of the commercial implications.”

(emphasis added)

Consultations have already taken place with a view
to defining a road hierarchy throughout the
Metropolitan Area. A comprehensive road hierarchy
presupposes truck routes. The progress towards
completion of that hierarchy is necessarily slow
because the consultative process is slow.

282. Transcript New South Wales Road Transport
Association 18/4/80, page 72.

-273-

A network of truck routes to be used by container
trucks should not be made to depend upon negotia-
tions concerning a wider road hierarchy. It
is a narrow issue which should be addressed
immediately. The Traffic Authority, the
Department of Main Roads and the Planning and
Environment Commission should participate with
the following bodies to reach agreement:

the inner city Local Councils
Transport Workers’ Union of Australia
the New South Wales Road Transport
Association
the Long Distance Road Transport
Association
the Quarry Masters Association
possibly the Chamber of Commerce

A time limit should be set. It is desirable that
truck network is available for implementation
the time the CTAL terminal begins operations.

Full agreement may not be possible. At the end
of the day it may be necessary to settle upon a
particular solution. The network, no doubt, will
incorporate matters which have been agreed, and
will adopt a view upon other matters, having
considered the submissions of all- concerned.

The Inquiry, for its part, is far from convinced
that a truck network consisting of main roads and
secondary roads would not function adequately in
the off-peak. The computer simulation techniques
are confined to the two hour a.m. peak. Because
they may demonstrate an inability on the part of
the network to cope with the traffic load during
that period, is no basis for inferring that the
network could not cope if trucks were confined to
main and secondary roads in the off-peak. Yet
that conclusion is invited by the way in which the
findings are expressed.

-274-

7. DEPOT AT PORT BOTANY

7.1 The Background

In our outline of the history of containerisation
in Sydney we drew attention to the lack of space
at the terminals established in Port Jackson.
That deficiency created the need for decentralised
unpacking depots.

Space is not a problem at Port Botany. A joint
application has been made by the Australian
National Line and by the other terminal operator,
CTAL, for a depot which would stuff and unstuff
LCL containers. The application is supported by
the Waterside Workers’ Federation whose members
would man the operation.

The Maritime Services Board and the terminal operators
have executed leases for the Botany terminals. In
their present form, they each forbid the establish-
ment of a depot to handle LCL containers ₍₂₈₃₎:

It would appear that this prohibition already
existed at the time of the Botany Bay Port and
Environment Inquiry (The Simblist Inquiry) in
November, 1976. The Report of that Inquiry touches
upon the depot issue. The passage is descriptive
rather than prescriptive ₍₂₈₄₎:

"As packing and unpacking of containers
will not be carried out at the terminals,
the container operations themselves will
be relatively clean, and create little
air and water pollution."

7.2 The Operational Advantages of a Depot at the Port

Sydney is unique in Australia, and for that matter
the world, in not having depot facilities at the
wharf. The submission from the Glebe Island

283. Submission S.K/C 1424 Maritime Services Board
letter 19th December, 1979, page 1.
284. Botany Bay Port and Environment Inquiry,
paragraph 5.2.1.

-275-

Terminal contained the following statement ₍₂₈₅₎:

"We, and they (referring to ANL and
CTAL), have always expected that
LCL containers could be unpacked
and empty containers stored within
their terminal."

The statement was amplified by the Manager of the
Glebe Island Terminal in evidence ₍₂₈₆₎:

"It would be quite surprising in this
day and age and the knowledge of
container technology and - terminal
technology and operational systems,
if a large modern terminal developed
on reclaimed land without apparent
inhibitions or restrictions; did not
have unpacking and packing on its
premises. The benefits associated
with that in the utilisation of labour
in particular and the facility to
minimise the movement of containers
away from the terminal, is so obvious -
the benefits are so obvious that really,
it's only a few container terminals
in Sydney, in the world, that don't
have that facility."

Shipping inevitably entails peaks and troughs.
There is idle time. Ships are delayed or none are
available to unload. If there is insufficient
activity at the wharf, men can be directed to
other tasks. If containers are being unpacked or
packed at the wharf they can perform that function.
Mr. Bryans from ANL, Melbourne made the point in
the following evidence ₍₂₈₇₎:

"BRYANS: I think one of the major
advantages of having a depot in the
facility of Port Botany would be in
labour utilization where times of
lesser activity in the terminal, such
as non-ship days, the men could be
utilized in the depot to pack and
unpack and vice versa. When times
of maximum activity and loading and
discharging, men could be drawn from

285. Submission S.K/C 1427, page 5.
286. Transcript of Glebe Island Terminals Pty.
Limited, 14th April, 1980, page 71.
287. Transcript ANL 14th April, 1980, page 109.

-276-

the depot so there would be a
flexibility of interchange of labour
and utilization of labour. That
would be one of the major (advantages)."

The terminal operators and the Waterside Workers'
Federation both maintain that the matter should
be looked at again because of these clear
operational advantages. The Inquiry accepts
that there are significant operational advantages
in having a depot at the port.

7.3 The Environmental Implications of the Depot

The issue, at this remove, is not one simply of
efficiency or even the environment, though clearly
both these matters are important. There are
industrial implications as well, since the
Federated Storemen and packers Union fears that an
unstuffing depot at Port Botany would threaten the
viability of operations in which its members are
employed at Villawood, Chullora and Alexandria.
More than this they fear that such a depot may
be the 'thin end of the wedge'. Their concern is
understandable. We shall deal with both these
fears in the course of this Report.

Before doing so, however, it is desirable to
examine the environmental implications. The figure
of 6,000 TEU has been suggested as the annual
throughput for the depot. At that level, so it
is said, the depot would be viable.

The environmental impact would depend upon a number
of things:

First, whether it is possible to sort
LCL containers according to their
destination.
Secondly, the type of truck used for
the delivery of LCL cargo.
Thirdly, the number of journeys made
by trucks to and from the port
delivering or picking up LCL cargo.

-277-

If it were possible to sort LCL containers
according to the cargo's destination, the
environment may be advantaged in the same way
as it will be advantaged by the Western Suburbs
Scheme. The number of truck kilometres would
be kept to a minimum. Containers would be
unpacked nearer their final destination (or
packed nearer their origin in the case of exports).

The CTAL Environmental Impact Statement seems to
suggest that sorting according to destination is
possible ₍₂₈₈₎:

"The shippers and the shipping fraternity
generally agree that justification
exists for some form of freight depot
facility to be created at Botany Bay,
to handle break bulk cargo destined
for companies in close proximity to
Botany Bay."
(emphasis added)

The Inquiry has not seen the joint application to
the Government by the Australian National Line and
CTAL in which approval for a depot is sought. The
State Rail Authority apparently had access to that
document. It purports to summarize its contents
in the following paragraph ₍₂₈₉₎:

"The container terminal operators, the
Australian National Line and Container
Terminals Australia Limited, are jointly
seeking approval for depot operations to
be carried out within the terminals, for
those LCL containers which are destined
for, or originate from the inner city or
Botany areas.”

(emphasis added)

The position may be different in the case of imports
and exports. Within an import LCL container there
is the cargo of a number of consignees. The
experience of Freightbases would suggest an average
of five consignments per container ₍₂₉₀₎. It would

288. CTAL Environmental Impact Statement, page 46.
289. Submission S.K/C 208 PTC (now SRA), page 18.
290. Transcript Freightbases Pty. Limited 14/3/80,
page 77.

-278-

take a fair measure of coincidence for all
consignees to be located closer to one depot
than the others. If they were differently
located, upon what basis would the final destina-
tion of the LCL container be determined for the
purpose of assigning it to the Botany depot or
to one of the other depots? The question was
put to the Assistant Operations Manager of
Freightbases Pty. Limited ₍₂₉₁₎:

"COMMISSIONER: The problem.. is one of
actually endeavouring to segregate
that parcel of LCL containers, which
is appropriate for the wharf depot, if
one were endeavouring to introduce an
element of rationality into the system
in terms of the ultimate destination
of the cargo within the LCL container.

DENE: Well I can quote from experience
here, in that (the) Eastern Sea Road
Service did or still do use two depots
and they had a situation where they
would split a ship. Part of the
containers would go to Rozelle and
part would come to Villawood and the
basis of the split would be, they would
contact the client and say where do you
want your cargo to go and the first
fellow that said Rozelle or Villawood,
well the whole container would go there.
Initially they started off by saying,
alright, we will try and do this ration-
alisation and it didn't work because of
this multiple consignment and multiple
delivery areas. So they said, right fine,
we will take the greater percentage and
they had somebody sitting there trying
to work out the greater percentage. But
this created problems because some of
their better supporters didn't want to
go to a certain depot and because they
were in the minority in that particular
box and then in the majority in another
container they would have part of their
consignment in one depot and part of their
consignment in another depot, which created
problems and it just went on, but it came
back to the base problem, which is that
there are very, very few LCL containers
that you can say yes, that is Eastern
Suburbs. Yes that is Western Suburbs."

291. Transcript ibid. page 81.

-279-

We accept that for import LCL containers sorting
according to destination and proximity to Botany
is simply not possible.

Export containers may be somewhat different.
Exporters may tend to choose a shipping line which
uses a depot convenient to the exporter’s premises.

We have already remarked upon the difference between
the type of vehicle involved in picking up and
delivering cargo for LCL containers, and the type of
vehicle involved in the transportation of FCL
containers. The STSG Port and Depot Survey
disclosed the following statistics:

77% of the vehicles involved in
the LCL import trade were rigid
trucks and only 10% were semi-
trailers or dog-trailers.

75% of the vehicles involved in the
LCL export trade were rigid trucks
and approximately 14% were semi-
trailers or dog-trailers.

In contrast 69% of vehicles involved
in the transportation of FCL
containers were semi-trailers.

It must be acknowledged that there is an increase
in the number of truck movements. Assuming the LCL
container conformed to the average, there would be
the freight of five consignees. Each is likely to
retain his own transport company which must attend
the port to take delivery of the goods.

The average number of truck journeys per LCL
container has been carefully calculated by STSG in
the Port and Depot survey. There are misconceptions
about the 1ike1y traffic generation from a depot.
The precise figures to emerge from the STSG Survey
are ₍₂₉₂₎:

292. Exhibit 89 STSG "Botany Bay Container Movements”-
Documentation of Findings, page 6-7.

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1. Each LCL import when broken down
is estimated to generate 6.3 truck
movements.

2. The cargo for each LCL export is
estimated to generate 5.8 truck
movements.

But the trucks are smaller.

These figures are significant because they are
substantially less than the truck movements
which are sometimes said to arise out of the
stuffing or unstuffing of an LCL container.
The following is an extract from the Director of
Forward Town Planning of the South Sydney Council
(Mr. Orr) where he refers to a much higher figure
than disclosed by the STSG Survey. He says ₍₂₉₃₎:

"ORR: ..Our Council..in their submission
to the Port Inquiry (Simblist Inquiry),
said that they wanted a break down
facility at Port Botany. It is our
submission that if there was a break
down facility at Port Botany it would
be far better to have twenty small
vehicles come out of Port Botany than
one large container vehicle; it is the
container vehicle, the large container
vehicles, that cause traffic congestion,
not the smaller trucks and we felt that
it would be..preferable to have a break
down facility for local goods than have
more container vehicles coming out of
the port.

COMMISSIONER: Is that still the view
of Council?

ORR: Yes."

The support of the South Sydney Council for a break
down facility is important. Given the number of
freight forwarders within its municipality and the
general concentration of industry, one would expect
it would be even more intimately affected than
Botany, which at least does have the Foreshore Road
to disperse a substantial part of the traffic.

293. Transcript 17/10/79, page 142-143.

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The Town Planner for the Botany Council, Mr.
J.C. Wiggins gave the Botany Council view in the
public hearing which took place on 30th October,
1979. He said ₍₂₉₄₎:

“COMMISSIONER: Does the Council have
a policy concerning the establishment
of unstuffing depots at the port?

WIGGINS: Council itself has indicated
that it does not wish the stuffing and
unstuffing of containers at the Port
because this would increase the volume
of the traffic to and from the port.
The Council's general attitude is that
all containers, or as far as possible,
all containers should be moved out of
the Port area by rail to suitable areas
and that destuffing and restuffing of
containers take place in those locations.”

We have drawn attention in this Report more than
once to the size of container vehicles. The
Inquiry has expressed the view that it is the
very large vehicles carrying one and two containers,
rather than small rigid trucks, which menace the
environment, and which necessitate the implementa-
tion of the scheme proposed.

The Inquiry takes the view that environmentally
a depot at Port Botany will not make a great deal
of difference. First, the depot capacity, if it
is held at 6,000 TEU is only about 1½% of the total
Sydney throughput. Secondly, the vehicles involved
in the distribution of LCL cargo are the smaller
rigid vehicles and not the large container vehicles.
The number of large vehicles in the vicinity of the
Port may even reduce depending upon which of the
existing depots contribute to the Botany throughput.

7.4 Industrial Ramifications

What, then, are the industrial implications? In
our examination of the free market case we
established by reference to the evidence the
following:

294. Transcript 30/10/79, page 14.

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That the throughput of the Chullora
depot will shrink from approximately
47,000 TEU to something of the order
of 14,000 TEU.

It was acknowledged by the National
Operations Manager (Mr. Don McSporran)
that the viability of the operation
may in these circumstances be
threatened.

Likewise the FCL component of the
Villawood depot throughput is liable
to disappear once Port Botany opens.
The FCL capacity of Villawood is said
to be 4,000 TEU at present.

Insofar as the Villawood depot is
already marginal (the impression
which was given) the viability of
that operation may also be threatened.

The Inquiry has proposed a scheme. It will involve
using the depots in the Western suburbs for the
purposes of handling FCL import and export
containers.

It is recognised that the handling of FCL containers
is capital intensive whereas the unstuffing and
stuffing of LCL containers is labour intensive. The
throughput, therefore, has to be substantial in order
to preserve the jobs which may be lost through
subtracting a total of 6,000 TEU from the LCL
market. The throughput of each of the depots is
substantial. In the case of Chullora the total
throughput is likely to exceed 30,000 TEU, and in the
case of Villawood it is likely to be of the same
order though slightly less.

In the course of the public hearings we asked
Freightbases Pty. Limited to perform an exercise
in which it indicated the number of employees it
would require for various combinations of FCL and
LCL containers. Their response gives an indication
of the differences between the labour requirements
in each case. They gave three situations as follows ₍₂₉₅₎:

295. S.K/C 1185, Freightbases Pty. Limited.

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VOLUME

FCL       LCL       EMPLOYEES
A    4,000     11,000    169
B    6,500     9,500     157
C    10,000    5,000     131

Now, there is no suggestion that the 6,000 TEU will
be subtracted only from Villawood. It is likely
that Villawood will continue to handle a substan-
tial number of LCL containers. Under the scheme
proposed it will handle considerably more than the
FCL containers nominated in any of the three examples.

Provided steps are taken to implement the Western
Suburbs Scheme, the viability of the Villawood
depot and the Chullora depot is assured, and the
industrial interests of the Federated Storemen
and Packers Union are adequately protected.

The depot at the port should not be regarded by
either the shipping lines or the Waterside Workers’
Federation as a 'toe in the door’ which will enable
them to fling the door wide open. Permission to
establish a depot must be conditional upon the
following:

(a) The lease agreement between the Maritime
Services Board and the Australian National
Line (and when appropriate with CTAL) should
be varied. Permission to establish a depot
at the Port should be conditional upon the
annual throughput not exceeding 6,000 TEU.

(b) Planning permission for any structure should
be conditional upon the same throughput
limitation.

(c) It is also desirable to limit the size of
the shed to that which is appropriate for
a throughput of 6,000 TEU.

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A suggestion was made in the course of public
hearings ₍₂₉₆₎ that the position of the depots
(and, therefore, of the depot employees) could
be adequately protected if a mechanism were
found which would ensure:

that the 6,000 TEU was shared
equally between the three
depots Chullora, Villawood
and Alexandria

that it be limited to no more
than 40 LCL containers per
week per depot

Because of peaks and troughs there may be
difficulties in implementing a scheme as rigid
as that. Nonetheless the shipping lines and the
various unions could, no doubt, hammer out an
agreement which would ensure that one depot did
not suffer a disproportionate reduction in
throughput as a result of any depot at the port,
and that continuity of LCL containers to the various
depots was maintained. A situation should not arise,
for instance, where the depot at the port handled
its 6,000 TEU in the first three months of the year
making it difficult for the other depots to maintain
staffing levels appropriate to the number of LCL
containers which they would handle during the rest
of the year.

8. SHOULD THE SCHEME INCLUDE PORT BOTANY AND PORT JACKSON?

8.1 Should the Scheme Include Port Botany?

We have demonstrated in this Report that the
carriage of containers by road from Port Botany
will have a significant environmental impact.
The impact can be ameliorated by the implementation
of the scheme.

Further, the terminals have been given the clearest
possible indication, by the public and by various
Inquiries, that a greater rail share was essential
if another 'Mort Bay' was to be avoided.

296. Captain Manly. Transcript, 1/4/80, page 16.

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The Simblist Inquiry reported in November, 1976.
Its recommendation was in the following terms ₍₂₉₇₎:

"The Inquiry therefore concluded that the
construction of the two container terminals
should proceed, but subject to the condition
that the following propositions be given
careful consideration with a view to the
minimization of the impacts on the
environment.”

(emphasis added)

The conditions to which this passage refers are
embodied in Section 10 of the Report and include ₍₂₉₈₎:

"ANL proposes a total rail/road split of the
order of 20/80%. The CTAL estimate varies
slightly from this. The terminal operators
should bs compelled to accept a much higher
rail usage.
(emphasis added)

The Government accepted the Simblist recommendation.
It made its policy on the use of rail abundantly
clear. Rail was to be used to the maximum extent
practicable ₍₂₉₉₎.

In March 1979 CTAL published its Environmental
Impact Statement. The Statement includes the
following ₍₃₀₀₎:

"It is clear from earlier public
inquiries and public statements from
various authorities that the major concern
related to the impact of container
movements through both neighbouring and
distant suburbs."

These matters were put to the terminals in the
public hearings. The following question was put
to the Australian National Line ₍₃₀₁₎:

297. The Botany Bay Port and Environment Inquiry
     (The Simblist Inquiry), paragraph 5.4
298. Simblist Report ibid., paragraph 10.6.1
299. See Chapter V - The Clamour for Rail especially
     page 51.
300. CTAL Environmental Impact Statement, page 23.
301. Transcript Australian National Line 14/4/80,
     page 42.

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"COMMISSIONER: But could it not be said,
that having been given a clear indication
of what the Commission in that Inquiry
(the Simblist Inquiry) thought was
appropriate, and further the Government
of New South Wales having itself made
announcements to the effect that rail
should be used as far as possible, that
under those circumstances ANL ought to
have taken the lead, and in some way
oriented itself towards (rail).

BRYANS: ..What was recognised (was)
there is a move towards rail, but we've
never envisaged that it might become an
overnight decision where the next day
we'd be committed to a real percentage;
and I believe we can cope with a move
towards rail but not in one hit."

It is important to recognise that these discussions
were taking place against the background of both
the State Rail Option (70% share) and the Western
Suburbs Option (then thought to be a 47% share but
since reduced by this Inquiry to a 41% rail share).
The jump from a 28% rail share (presently experienced
by ANL) to 41% is not so dramatic and will not happen,
in any event, overnight. The ordinary processes of
Government and Parliament will ensure some delay.

CTAL is still in the process of completing its terminal.
It will not commence operations before the middle of
1981 at the earliest. The terminal is being geared
to a 36% rail share and a 41% share is only marginally
higher.

It is clearly appropriate that the scheme should
include Port Botany.

We should refer in passing to the suggested option
of self regulation. We have said that the clamour
for rail by the public has been all but deafening.
We have drawn attention to the statements of policy
made from time to time by Government and by Environmental
Inquiries. The fact that the terminals, against that
background, have insisted that the choice of mode is
out of their hands, and is entirely one for the

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importers and exporters, renders somewhat hollow the
suggestion that the rail share can be increased by
means of self regulation.

8.2 Should the Scheme Include port Jackson?

The suggested inclusion of Port Jackson gives rise
to two issues:

First, is it possible to include
each of the wharves or facilities
within Port Jackson handling
containers?

Secondly, is it desirable to extend
the scheme to those wharves and
facilities?

It will be remembered that there are two container
terminals in Port Jackson:

the White Bay facility operated by
Seatainer Terminals Limited

the Glebe Island Terminal leased
by Glebe Island Terminals Pty. Limited

There are, in addition, a number of wharves which
are capable of handling containers:

various wharves along Darling Harbour

Woolloomooloo No. 11 wharf

The Maritime services Board has under contemplation
the completion of other wharf facilities,
specifically in the Pyrmont area.

The White Bay facility and the Glebe Island Terminal
are both connected to rail and presently use rail to
a greater or lesser degree. The wharves at Pyrmont
will be connected to rail. A siding is immediately
adjacent.

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The Darling Harbour wharves and Woolloomooloo
wharf No. 11 are not connected to rail.

The contribution made to container handling by the
Woolloomooloo wharf is small. Its inclusion or
exclusion from any scheme is neither here nor there.

The same cannot be said for Darling Harbour. The
throughput of the Darling Harbour facilities in
the last financial year exceeded 90,000 TEU (i.e.
25% of total Port throughput). The capacity of the
Darling Harbour wharves is being extended by the
addition of a further wharf (Darling Harbour No. 3)
which will be completed by the middle of 1981.

8.3 The Extension of Rail to Darling Harbour

The Darling Harbour goods yard is at the Haymarket
in the lower end of Sydney. The Darling Harbour
wharves are tantalisingly close to the goods yard.
The question arises whether it is possible to
extend rail to the Darling Harbour wharves?

The matter was investigated by the State Rail
Authority. The difficulties are immense. First,
the Darling Harbour rail siding is oriented in
the wrong direction. There is a minimum curve which
a train can negotiate. It is difficult, within the
tolerances which are acceptable, to make a connection
between the track extending from the Darling Harbour
wharves and the existing siding. Secondly, the
alignment, wherever it may be, is likely to conflict
with the Western Distributor which is presently under
construction by the Department of Main Roads. It
would not be possible to weave a path between the
pylons. Thirdly, avoiding the Western Distributor
gives rise to problems which are even greater. They
are described in the following passage by the State
Rail Authority ₍₃₀₂₎:

302. Transcript P.T.C. (now S.R.A.) 17/3/80, page 48.

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"FENNELL: The other alternative which is
the other extreme, is to come right out
through the middle of Darling Harbour,
across the water. Now that would involve
some sort of viaduct or bridging arrange-
ment that would go from one side of the
water to the other. Now the cost of this,
where talking in terms of millions, possibly
even up to $100 million. We don't know
what the formation is like, what the
ground is like under the water. It would
require extensive geological surveys. We
know that the Maritime Services Board want
to develop the wharves at the southern end
of Darling Harbour. We would envisage that
this would have to be some sort of opening
to allow ships to go in, again at great
expense.”

One need hardly go on. Fourthly, the Darling Harbour
wharves are already short of space. A rail facility
would intrude upon such space as there is. Fifthly,
the rail facility would presumably run parallel to
Hickson Road. It would require the demolition of a
number of buildings. It would create difficulties
of access and egress from the terminals and possible
conflict between trains and large semi-trailers.

Plainly rail is simply not feasible at Darling Harbour.
Is there an alternative means of including the Darling
wharves in the scheme? The following questions were
put to the State Rail Authority ₍₃₀₃₎:

“COMMISSIONER: Is it fanciful to
suggest that some conveyor system
or some such contraption could be..

A: We have thought of that yes.

Q: Constructed?

A: Yes that is possible like a conveyor
belt system running along the wall.

Q: Or an overhead monorail or something
which was, for instance, attached in some
way to the expressway itself?

A: (I) imagine the cost of a monorail
would be quite excessive. I know monorails
are generally considerably more expensive
than conventional railway."

The second alternative was a shuttle service

303. Transcript 17/3/80 ibid., page 49.

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conveying containers from the various Darling
Harbour wharves to the Darling Harbour goods
yard at the other end of the city. The State
Rail Authority investigated the feasibility of
such a service. The distance to be covered, on
average, would be approximately 1.5 kilometres.
It would take approximately 22 minutes. The State
Rail Authority estimate the cost per container at
$34.68 ₍₃₀₄₎. The cost figures do not appear to
include any sum for the plant involved in trans-
shipping the container from the wharf to the rail
waggon (the tug and chassis). Lifting the
container has been costed at $7.

Even adopting the figures of the State Rail
Authority (and we rather suspect it would be more)
a shuttle service poses enormous operational and
financial problems. In the Inquiry's view it is
not feasible.

Where does this leave the scheme? Clearly Darling
Harbour cannot be included. If the scheme should
extend to Port Jackson at all, it can only extend
to White Bay, Glebe Island and such wharves as
the Maritime Services Board may construct in the
Pyrmont area in the future.

8.4 The Effect of Excluding Darling Harbour

Is the exclusion of Darling Harbour fatal to the
scheme?

If it were the case that a significant proportion
of the trade would migrate from other facilities
to Darling Harbour, simply to avoid the scheme,
the exclusion of Darling Harbour may vitiate the
entire proposal. We do not believe, however, that
this will occur.

304. Exhibit 125.

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The affiliations between shipping lines and
container terminals will largely determine where
the ships are sent. The Australian National Line
ships will be serviced at the Australian National
Line Botany terminal whether Darling Harbour is
included in the scheme or not. Similarly the
eight shipping lines operating through the
consortium CTAL will direct their vessels to
the CTAL facility at Botany.

If there were a significant disadvantage attaching
to regulation it may have an effect in two ways.
First, the White Bay facility and the Glebe Island
facility will both have spare capacity once the
Botany terminals are both operational. They will
be seeking to attract trade to fill the vacuum
created by shipping lines which have transferred
to Botany. If there is a significant detriment
attaching to regulation (a matter which we will
examine shortly), the ability of White Bay and
Glebe Island to attract shipping lines away from
Darling Harbour may be impaired.

Secondly, the competition is not confined to
terminals vying with each other to attract ships.

It extends to shipping lines competing with each
other for the custom of importers and exporters.
If a shipping line can avoid the scheme by going
to Darling Harbour, is that a significant commercial
advantage, liable to attract importers and exporters?

On balance the Inquiry takes the view that the
exclusion of Darling Harbour, unfortunate though
it may be, does not constitute a serious impediment
to the scheme.

First, the scheme in the way it has been fashioned
by the Inquiry (excluding empties) will neither
involve serious delay nor serious financial detri-
ment. Indeed, if the shipping companies, or the

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conferences through which they operate, determine
upon a box rate for the entire Metropolitan Area
(as seems likely), there may be a financial
advantage to those in the Western Suburbs.

Secondly, the Glebe Island and White Bay facilities
will be able to offer shipping lines, which now use
Darling Harbour, immense advantages. The Maritime
Services Board in 1976 estimated a capacity of the
Darling Harbour and other berths to be 50,000 TEU ₍₃₀₅₎.
In the last financial year the Darling
Harbour wharves handled over 90,000 TEU ₍₃₀₆₎.
Clearly the Darling Harbour wharves are operating
at saturation, if not beyond their capacity ₍₃₀₇₎.

In contrast the Glebe Island terminal and the
White Bay facility will both be operating on a much
reduced throughput. They will be in a position to
obviate ship queuing and to offer speedy ship turn-
around. These advantages dwarf the so-called
disadvantages which attach to the Western Suburbs
Scheme.

Thirdly, we do not accept that the Western Suburbs
Scheme will seriously advantage those shipping
lines exempted from it because they use the Darling
Harbour wharves. To appreciate the point it is
necessary to recite certain familiar statistics:

full import FCL containers have, in
the past, constituted approximately
39% of the total Sydney throughput

of these 32% are destined for the
western suburbs and are caught by
the scheme

export FCL containers have, in the
past, constituted approximately 24%
of the Sydney throughput

305. Submission Maritime Services Board to the
Simblist Inquiry, page 79.
306. See Table 2, Page 14.
307. See transcript Maritime Services Board (Day 2),
page 9.

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of these only 13% come from the
Western suburbs

In short, the scheme effects far more import FCL
containers than export FCL containers. Yet, the
importer in Australia, more often than not, has
little to do with the choice of shipping line
for goods being sent to him from overseas. That
is a decision usually made overseas and dependant,
no doubt, (as it is here) upon obscure commercial
and social relationships which have little to do
with the features of Sydney. The matter was put
in this way by the President of the Customs Agents
Association of New South Wales, Mr. David Cable ₍₃₀₈₎:

"Q: Have you had experience with particular
clients chopping and changing from shipping
line to shipping line? Or do they tend to
stick with the one shipping line, or what?

A: Most importers are not very sophisticated
in that regard. I mean I'm not talking about
the major users.. they do know what suits them
best because its of obvious value to them.
But the small shipper doesn't really. He
leaves most of it to his overseas supplier
to ship on the first available ship - send it
out and as long as his freights don't vary too
much.. he doesn’t really care."

An exporter in Sydney may well appreciate the
difference between shipping lines and between
terminals. The number of exporters affected by the
scheme is small. Are they likely to desert the
shipping line they used before the scheme?

It is one thing to introduce a scheme in a market
characterised by anonymous communications between
parties doing business. It is another to superimpose
a scheme upon a market in which shipping lines go out
of their way to establish close relationships with
exporters. We hardly think it likely that the
disadvantage of one day's delay and a minor monetary
penalty (if one exists at all) would disrupt established
relationships between shipping lines and exporters.

308. Transcript Customs Agents Association of
New South Wales 1/5/80, page 42.

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Fourthly, we are reinforced in this view, by the
differences which exist between the conference
rates and the non-Conference rates for carrying
containers. Certain shipping lines have formed
Conferences which determine the rates at which
cargo will be carried. The cost of carrying a
container from Europe may vary between $3,000 and
$5,000 depending upon the nature of the cargo.
The non-Conference rate may be 10 to 20% less.
That is a significant differential. It makes the
suggested cost penalty under the Western Suburbs
Scheme appear small indeed.

If money were the only criterion, one would expect
the non-Conference lines to swamp the conference
lines. They do not. The Conference lines (especially
on some trades) still carry the lion's share.

Fifthly, the complexity of the tariffs at which
cargo is carried, to some extent, camouflages minor
differences within tariffs. We suppose if the
Government decided to make all letters posted in
the Western suburbs 5c more expensive, the surcharge
would stand out like a beacon because everyone knows
the cost of posting an ordinary letter. If something
as complex as a shipping tariff were altered for a
particular destination, the alteration would remain
undetected to all except those who make a habit of
reading the fine print.

The following evidence was given by the Australian
Chamber of Shipping ₍₃₀₉₎:

"JENSEN: Every trade has got a very
complex tariff and it covers the actual
cost of the container, the amount of
cargo for a specific distance and that
is a fixed amount."

Later the following was said ₍₃₀₉₎:

309. Transcript Australian Chamber of Shipping,
13/3/80, page 18-19.

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“JENSEN: Rate of freight's dependant on
the type of cargo you put into it and
there could be thirty of forty different
types of freights applicable to those
cargoes. Even within the framework of
say steel, you've got five or six different
types of steel which a different rate of
freight applies. Some trades have an FAK
rate that's a 'freight of all kind', which
covers the total box whether they put moth
balls in or golf balls, it doesn’t matter.
So, these tariffs are quite complex and
they cover a wide range of goods."

If there is a monetary difference occasioned by the
scheme, the advantage to Darling Harbour is slight
since that difference is likely to be small. It
would be further diminished because it would be
buried within the complexity of the shipping tariff.

Sixthly, there are important differences between the
capacity of the Darling Harbour wharves to handle
containers and the capability of the terminals at
White Bay and Glebe Island. It is the difference
between a conventional wharf and a container terminal.
The Darling Harbour wharves are simply not able to
efficiently handle the large cellular container
vessels. They lack the massive overhead crane
necessary for that system. Nor would it be possible
to install such a crane. There is simply not the
space. Such vessels are constrained to go to either
Botany or Glebe Island or White Bay.

Indeed, when the Prices Justification Tribunal
investigated the pricing policy of Seatainer
Terminals Limited (the operators of White Bay) it
did not even seriously contemplate Darling Harbour
as an alternative to White Bay or Glebe Island.
In its judgement it makes the following remark ₍₃₁₀₎:

"In Sydney the only competitive cellular
container terminal is operated by Glebe
Island Terminals Pty. Limited at Glebe
Island."

310. Prices Justification Tribunal Matter No.
S16/76/40 10/3/77, page 97.

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Later the Tribunal added the following comment ₍₃₁₁₎:

"From a competitive aspect we are of
the opinion that the company is
currently in a position of having no
real price competition for its terminal
services in Sydney or Freemantle.”

Finally, there are certain limitations which apply
to Darling Harbour which do not apply to the container
terminals. When put in the balance these disadvantages,
in the Inquiry's judgement, far outweigh the
disadvantages which arise under the Western Suburbs
scheme. Access to the Darling Harbour wharves is
difficult. Truck queuing in Hickson Road is
commonplace. Trucks must contend with city traffic.
They must contend with the one-way systems and street
closures which now characterize the Central Business
District.

The space available to the operators of the Darling
Harbour wharves is limited, as it is elsewhere
throughout Port Jackson. Some of the facilities are
not available to all-comers. They have been leased
by particular Shipping Lines and service (exclusively)
the vessels of those Lines. Lines which may be
deterred from using White Bay or Glebe Island because
of the existence of the scheme, would have to use
the common user facilities (presently No. 4, No. 9
and No. 10 Darling Harbour to which No. 3 Darling
Harbour will be added in mid 1981). These wharves,
as we have already remarked, are working almost at
capacity, if not beyond capacity.

We are convinced in these circumstances that the
exclusion of Darling Harbour will not compromise
the application of the scheme to the other terminals,
if that is thought appropriate.

311. ibid., Page 16.

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8.5 Reaction of the Industry to the Inclusion of the
Port Jackson Container Terminals

In this matter, as in others, the industry faced
the difficulty that fundamentally it opposed any
scheme. In these circumstances it found it
difficult to contemplate a question which pre-
supposed the existence of the scheme.

The Maritime Services Board was asked for its
view. In a letter addressed to the Inquiry ₍₃₁₂₎
it recites a number of arguments for and against.
Finally it withdraws from the brink, and instead
of stating its views, concludes with the following
words:

"..in conclusion (I) must emphasise that
the Board believes no restrictions should
be placed on the transport of containers
either at Port Botany or Port Jackson.”

We did have the benefit of certain submissions made
by Mr. Silva the Principal Engineer, Planning, with
the Board ₍₃₁₃₎:

"COMMISSIONER: One probably starts with a
premise that one should treat port Jackson
and Port Botany equally: the same. Now
if that is not possible, and it may not be
possible.. because the Darling Harbour
wharves are not on rail.. one must then
ask oneself what would be the effect of
confining the scheme, such as it is,
either to such of the wharves in Port
Jackson as are on rail together with Port
Botany or exclusively to Port Botany?

SILVA: I think there would be considerable
difficulties in imposing conditions on Port
Botany that didn’t relate to Port Jackson
because there is competition between the
two groups of companies. I think the way
would be open for various loopholes perhaps
to be exploited..”

Later in the same transcript the following appears ₍₃₁₄₎:

312. S.K/C 1424 Maritime Services Board letter 9/6/80
313. Transcript 12/3/80, page 20-21.
314. Transcript ibid., page 30.

-298-

"COMMISSIONER: I am suggesting and I am
prepared to accept that prima facie,
insofar as one can treat both ports the
same, one ought.

SILVA: I think that would be consistent
with the Board’s policy right along the
line...

COMMISSIONER: Yes, I don’t think anyone
would quibble with that.

SILVA: Yes."

Finally, the following exchange took place ₍₃₁₅₎:

"COMMISSIONER: Are you suggesting that
prima facie the scheme ought to apply
to White Bay, Glebe Island and Port
Botany, rather than simply to Port
Botany alone?

SILVA: Yes, I'm not saying it necessarily
should but I see less potential problem in
that. But I don't pretend there aren't
problems..."

We sought the PEC’s view since it advocated the scheme ₍₃₁₆₎.

"CONROY: Yes I would agree in general with
that statement, that it would be preferable
if it was applied to both Ports, but we
probably need to do some more detailed study
of the Port Jackson situation to really know
what the impact of such a scheme would be in
that case."

The State Rail Authority was asked the following
question by the Inquiry ₍₃₁₇₎:

"Q: It has been suggested that Botany
Bay should not be placed at a disadvan-
tage compared to Port Jackson and that
any scheme which is implemented should
apply to both ports. Is this agreed or
contested?"

The answer furnished by the State Rail Authority
was in the following terms ₍₃₁₈₎:

315. Transcript ibid., page 32.
316. Transcript PEC 26/3/80, page 29.
317. Series of questions for the State Rail
Authority dated 5/12/79 - Question 9.
318. S.K/C 208 Response to question.

-299-

"It is agreed that any scheme which
is implemented for the movement of
containers should apply to all
containers, regardless of whether
they are shipped through Port
Botany or Port Jackson wharves."

When that answer was provided, the State Rail
Authority assumed that a rail connection could
be made to Darling Harbour, although this later
proved not to be the case.

The Australian Chamber of Shipping did not express
a corporate view ₍₃₁₉₎. We had the benefit, none-
theless, of certain comments by a member of the
Chamber, Captain Jensen, from Seabridge Australia
Pty. Limited ₍₃₂₀₎:

"COMMISSIONER: The other matter which
I should like to raise.. is whether or
not, assuming there was to be some
scheme, one should include White Bay
and Glebe Island as well as Port Botany?

JENSEN: We would consider that if it
was going to apply to one place in the
Port it would apply to the other.

COMMISSIONER: In other words, accepting
for the purposes of argument.. the scheme
can only be applied to ports on rail and
therefore can only be applied to Glebe
Island, White Bay and Port Botany, you
would advocate, and the Chamber would
advocate, that it should be applied to
those three rather than simply Port Botany?

JENSEN: Right, we believe that this
would be commercially not acceptable,
but commercially even-handed.”

Freightbases Pty. Limited would be a beneficiary
under the scheme. It would handle import and
export containers through its Villawood depot.
Confessing this interest it was asked the
following ₍₃₂₁₎:

319. Transcript Australian Chamber of Shipping
     (Day 2), 6/5/80, page 12.
320. Transcript 13/3/80 (Day 1) Chamber of
     Shipping, pages 92-93.
321. Transcript Freightbases Pty. Limited,
     14/3/80, page 56.

-300-

"COMMISSIONER: Assuming there to be
regulation for the purposes of argu-
ment, would you see it as desirable
that it should extend to both Port
Botany and also Glebe Island and White
Bay or do you see that as undesirable?"

JONES: No its desirable.

COMMISSIONER: It's desirable. In
other words that uniformity as far as
it can be achieved should be achieved.

JONES: Yes."

The Botany terminals have an obvious interest in
ensuring that any scheme which they must suffer is
also 'inflicted' upon Port Jackson. The Australian
National Line submission is in the following terms ₍₃₂₂₎:

"The Line believes that if such
direction was made, it would need
to apply to all of Port Jackson, in
addition to Port Botany; in order
that the Port Botany operators are
not commercially disadvantaged."

Seatainer Terminals Limited operate both the White Bay
facility and the depot at Chullora. Whilst it will
be a beneficiary under the scheme (through the
Chullora depot) the beneficial entitlement will
primarily arise from the inclusion of Port Botany.
Botany will be handling approximately 65% of the
Sydney throughput and the remaining 35% will be
handled in part by Darling Harbour which is not
connected to rail. Seatainer Terminals Limited has
an interest in the scheme, but the interest in
extending the scheme beyond Port Botany is rather
less obvious. Its views emerge from the following
passage ₍₃₂₃₎:

"COMMISSIONER: ..Is there any inherent
reason why (the scheme should not extend)
to the Port Jackson wharves, namely
White Bay and Glebe Island?

McSPORRAN: No there is no reason why
that should not happen at all; as long
as we are restricting it to the two
container terminals as such.

322. S.K/C 1422 letter 17/12/79, page 4.
323. Transcript Seatainer Terminals Limited 21/3/80,
page 9.

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COMMISSIONER: In the best of all possible
worlds it would be desirable, no doubt,
to treat all wharves.. in exactly the same
way. However given the limitation that
there is no rail head at Darling Harbour...
one is left with the alternative of either
abandoning the scheme altogether or applying
it in a limited way. I understand you now
to say that if one were to apply it in a
limited way, there would be no reason why
it should not be applied to White Bay,
Glebe Island and Port Botany ports is
that right?

McSPORRAN: That is so yes."

The Glebe Island Terminal, alone amongst the parties
which made submissions to the Inquiry, opposed the
application of any scheme to its facility in Port
Jackson. It concludes its submission with the
following words ₍₃₂₄₎:

"If there is a problem to be resolved
by the Commission, it is a problem
specific to the Botany Bay Container
Complex, and in our view, its solution
must be confined to the parties directly
concerned and not by means of detrimen-
tally affecting the industry, and
ultimately the community as a whole."

We commenced this analysis by asking whether it was
possible to extend the scheme to all container handling
facilities within Port Jackson. Darling Harbour
cannot be included. Its exclusion does not create
significant problems, in the Inquiry's judgement,
so far as the remaining facilities are concerned.

We must now confront the second issue: whether it
is desirable that the scheme extend to the White
Bay facility as well as the Glebe Island facility.

That question, in the case of Botany, was answered
by examining the environmental implications. In
answering the same question in Port Jackson, it is
necessary to go beyond the environmental implications
and examine the effect upon the Port, and upon the
scheme, of having one port covered and the other not.

324. Submission S.K/C 1427 The Glebe Island Terminals
Pty. Limited, letter 3/4/80, page 6.

-302-

8.6 The Environmental Implications of Including Port
Jackson

The move to Port Botany will significantly reduce
the number of containers being handled by Port
Jackson. The contrast is between the following:

approximately 350,000 TEU handled
in 1979/80

approximately 145,000 TEU estimated
for 1985

The suburbs which surround White Bay, Glebe Island
and Darling Harbour (Pyrmont, Glebe, Annandale,
Leichhardt etc.) can expect significant relief,
even without the implementation of the Western
Suburbs Scheme.

This notwithstanding, the number of container trucks
which will still pass through the narrow streets of
the inner Sydney suburbs (especially Glebe, Leichhardt
and Annandale) make it desirable, in strictly
environmental terms, that the scheme embrace Glebe
Island and White Bay. First, there is no direct
road access from Glebe Island and White Bay to the
West or South-West (apart from Victoria Road which
is somewhat circuitous). Ordinarily trucks would
either make their way through Glebe and Annandale
or through Lilyfield and Haberfield. They will
pass through extensive residential areas.

Secondly, the number of trucks is a little over half
the number which can be expected along the Bay street,
Harrow Road, Bexley Road route which has been the
subject of close examination in this Report. The
streets through which those trucks will pass when leaving
white Bay and Glebe Isrand are likely to be narrower
and more closely settled than in Rockdale or Bexley.
This will accentuate, to some degree, the presence of
the trucks as it did in Mort Bay, Balmain.

-303-

There are significant environmental advantages,
therefore, in including the Glebe Island Terminal
and White Bay in the scheme.

8.7 The Advantages of Including the Port Jackson Facilities

The issue may be more difficult to resolve if the
White Bay facility had vigorously resisted inclusion
in the scheme. It did not take that stand.

The issue is whether Glebe Island Terminals, alone
amongst the container terminals in Sydney, should
be excluded. The argument of the Glebe Island
Terminal is encapsulated within the following passage
taken from its submission ₍₃₂₅₎:

"Finally, we note that a suggestion has
been made that for reasons of commercial
competition, whatever restrictions might
be applied to terminals at Botany Bay
should also be extended where possible
to terminals at Port Jackson. We reject
this for the following reasons:

1. All facilities in Sydney have
distinctive features; none are
identical (e.g., LCLs are packed/
unpacked at Darling Harbour, not
at G.I.T. or S.T.L.; Darling
Harbour and Mort Bay have no rail
connection; S.T.L. use their
Chullora depot as a decentralised
port, Glebe Island has direct
delivery etc.). These individual
features lead to a variety of
services enabling a choice to be
offered for all users of the port.
They in no way inhibit competition,
and in fact stimulate it.

2. We regard the new Botany terminals
as being commercial competitors and
they already have inherent advantages not
available to Glebe Island (e.g., more
modern equipment, a later generation
of technology, and a vast area of
land) ..We have always regarded our
proximity to the C.I.A. and our
ability to give immediate availability
of imports as being two major attrac-
tions to offset features at the Botany
Bay terminals that we cannot duplicate."

325. S.K/C 1427 Submission Glebe Island Terminals
Pty. Limited, page 5.

-304-

We accept, without hesitation, the major premise of
the Glebe Island Terminal argument, that each of
the container facilities is different, offering
advantages and attractions not found in competing
terminals. It does not follow from this, in our
view, that the Government, through the Maritime
Services Board, should be other than even-handed in
the application of any scheme which is thought
appropriate for the public good.

The Maritime Services Board adopts the view that
the same wharfage rates should apply to every
terminal. It does not apply higher rates to the
Botany terminals because they happen to have later
technology. The same leasing charge is made per
undeveloped acre at Port Jackson and at port Botany.
The Board does not discriminate between terminals
depending upon their throughput or profitability.
Indeed the Board has developed what it termed a
'twin port policy' where it did not discriminate at
all between Port Jackson and Port Botany. The
Board's submission to the Inquiry is in the following
terms ₍₃₂₆₎:

"..The imposition of restrictions on trade
through the new port facilities without
placing somewhat similar restrictions on
similar movements through Glebe Island
and White Bay - or for that matter Darling
Harbour - would put some port users (some
with long-term leases) at a distinct
disadvantage to others, and this would
have a serious effect on the operation of
the twin-port concept which the Board has
been developing for some time."

In the passage we have extracted, the Glebe Island
Terminal points to certain advantages of the Botany
terminals: 'more modern equipment, a later generation
of technology, and a vast area of land'. Thi_s cannot
be denied. The Port Jackson faci.lltiesron the other
hand, have certain advanlages over port Botany. The

326. S.K/C 1424 Maritime Services Board letter
dated 9/6/80.

-305-

White Bay facility was established in 1969
although it was later extended. The following
was put to the National Operations Manager of
that terminal ₍₃₂₇₎:

"COMMISSIONER: So that to some extent
if the plant and the terminal hasn't
already paid for itself, its well on
the way to doing so? Would that be a
fair statement..?

McSPORRAN: Well obviously yes, obviously
after a number of years of operation it
has been depreciated to an extent, yes.”

With the Glebe Island Terminals the initial expendi-
ture was made by the Maritime Services Board. When
the terminal was handed over to the present lessee
in 1974, lease payments were calculated according to
the cost of the installation amortised over a number
of years. The cost today would obviously be far
greater and the lease payments correspondingly
higher.

The Botany terminals will each cost approximately
$50 million. The container rates must reflect the
cost of handling at the terminals, and an amount
designed to recoup, over a period, the capital outlay.
The Botany terminal operators are concerned that the
Port Jackson facilities are effectively in a position
where they can set their prices according to handling
costs. They are not obliged to recover a substantial
capital outlay. The advantages, in short, are not
concentrated exclusively in Port Botany.

The State Government has a substantial stake in the
success of Port Botany. It has invested almost $150
million. Under no circumstances should that invest-
ment be jeopardised. To be less than even-handed may
conceivably create commercial difficulties which put
at risk the Botany investment.

327. Transcript Seatainer Terminals Limited,
21/3/80, page 33.

-306-

There are other reasons for extending the scheme
to Glebe Island. We have said repeatedly that
the scheme involves minimal disadvantages (if any)
to importers or exporters. Nonetheless, the Glebe
Island Terminal is concerned to avoid the scheme
so that it can offer importers and exporters the
advantage of delivering or taking delivery of
their FCL container at the wharf. It is likely,
if Glebe Island Terminal were excluded, that the
scheme would be characterised in a sales campaign
as a disadvantage which could be avoided by
shipping with this line or that. That is undesirable.
It is better that the scheme is uniformly applied to
Port Botany and Port Jackson. In that way it will
be looked upon (at worst) as one of those tiresome
regulations which simply must be obeyed.

If Glebe Island is excluded, policing the scheme
becomes that much more difficult. One further
category of full FCL containers is added to the
list of exempt containers. We do not suggest that
the exclusion of Glebe Island would create insuper-
able difficulties. Clearly the shipping documents
can be stamped with the name of the terminal from
which the container is taken. Nonetheless, exemp-
ting Glebe Island, FCL containers would significantly
enlarge the number of exempt boxes being transported
to the Western Suburbs.

On balance, especially having regard to the
environmental advantages, the Inquiry takes the view
that the Glebe Island facility should be included in
the scheme.

The position of the Glebe Island Terminal can be
accommodated to a small degree. It may be necessary
to phase-in the scheme, terminal by terminal, since
the State Rail Authority may not have at its
immediate disposal the rolling stock and locomotives
necessary to service the demands made upon it. The
scheme should first be applied to Port Botany. If

-307-

there is a need to phase-in the scheme, it should
than be applied to Port Jackson.

Further, the Inquiry believes that any wharves
constructed in the future which have access to
rail (such as the wharves in the Pyrmont area)
should also be obliged to adhere to the scheme.

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Sunday 31 May 2015

Volume I - Report - Chapter VIII continued