Intermodal Transport & Qube Holdings

This assignment delves into the complex world of intermodal transportation, exploring its evolution, challenges, and importance in global logistics. It specifically examines the role of Qube Holdings, a leading Australian company operating in the intermodal sector. Students will analyze Qube's business model, strategic decisions, and contributions to the industry while considering broader trends shaping the future of intermodal transport.

Logistic management

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Contents
Introduction...........................................................................................................................................3
Company Profile....................................................................................................................................3
Important features of an Intermodal......................................................................................................4
Features of Qube Logistics....................................................................................................................6
Main problems with current logistics network in New South Wales (NSW).........................................7
Develop Logistics Management Strategies............................................................................................8
Method / Solution to resolve the problems............................................................................................9
What if, Should NSW Government get involved in the resolution of problems..................................10
Sustainability.......................................................................................................................................12
Conclusion...........................................................................................................................................13
References...........................................................................................................................................14
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Introduction
An intermodal transport is defined as the movement of goods in the same loading unit using
two or more than two modes of transport. The benefit of such transport system is that it forms
an integrated chain of transport by utilising the strengths of different modes of transport. A
normal transport mode is more energy intensive than an intermodal freight transport, and
hence needs to be promoted to sustain in the long run.
Logistics management is an important aspect of supply chain management, when considering
the management in global sense. Transportation plays a very important part in achieving
security in supply chain management. Transportation and globalization together brings an
integration of modes of transport with it (Sahin & Yilmaz, 2014).
Earlier the focus for study on intermodal transport was more on the intermodal transport by
rail, and now the focus has shifted to transport by water and roads. The purpose of this
document is to study the factors and problems in development of intermodal transport, study
the best practices to follow and understand the factors that help sustain in the long run.
Company Profile
Qube Holdings Limited, was founded in the year 2010, it operates as a logistics and
infrastructure company in Australia, which also provides cargo supply chains services to
import and export clients. Qube has freight handling facilities through its multiple
subsidiaries at 29 ports in Australia. Its logistics subsidiary is Qube logistics, which has its
operations on road and rails, has warehousing facilities, intermodal logistics hubs (Qube
Holdings Limited, 2017). It holds four projects under its strategic assets, which are,
Moorebank logistics, Quattro JV, joint venture with TQ and Minto properties. As on end of
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June 2017, the company has seen revenue growth of 7.61% from previous 5 years, however,
the capital spending has been -8.98%, with increase of around 23.11% in Gross margin
(Mudie, 2015).
The company Qube logistics in NSW operates in the Port Botany freight terminal, Port
Botany Empty Park, Yen Nora Intermodal terminal and Macarthur intermodal terminal
(Trevaskis & Ogilvie, 2017).
Important features of an Intermodal
An intermodal could be termed as an ideal form of transportation for imports and exports. It
serves as a simplified form of transportation and is always successful in any logistics plan. Its
benefits lies in the systematic process of connecting and coordinating operators and parties
who are involved in the trade process. The main aim of the organizations using intermodal
transport, is to lower the transportation cost (IBISWorld, 2017).
Few benefits of utilizing this mode of transport are:
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1. Low cost, including low fuel cost
Shippers are always in search of methods to reduce the cost and increase the service value,
the intermodal transport helps them achieve this goal. Intermodal transport gives the shippers
an advantage of low rates, better predictable pricing, reduced handling costs while loading
and unloading of goods. It provides a better value proposition than a highway. The total
savings from the fuel expenses also drastically reduce with the use of intermodal transport.
This gives greater total savings considering high fuel surcharge that generally applies to
freight rates.
2. Reduced Carbon emissions
The use of intermodal transport by rail provides significant environmental benefits as
compared to single modal transport by road. The carbon emission reduces by about half the
amount. Carbon emission from train is approximately 5.4 pounds per 100 tonne-miles as
compared to 19.8 pounds from trucks. This in turn also helps the organization achieve their
sustainability goals by taking care of the environment.
3. Better safety and security
Accidents then to occur more on roads. The number of accidents per ton-mile on railroads is
recorded to be 1/4th of road accidents by trucks. The research also shows that delivery of
hazardous material generally reaches its destination safely and that too without any release of
hazardous material. Hence the rail transport can be termed as a more secure transport for
hazardous material.
4. Reduction in transit time
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A relatively less time is required to move goods using an intermodal transport as the step of
loading and unloading completely becomes irrelevant in an intermodal transport, reducing a
huge amount of transit time and delivering the goods in a better condition without causing
any damages.
5. Truck Driver shortage
There exists a huge gap in the availability of truck drivers as compared to their demand from
the organizations. Intermodal transport completely diminishes this challenge as the number of
people required to move goods through trucks is much more than using an intermodal
transport for the same quantity of goods (Mathisen & Hanssen, 2014).
6. Better reliability and capacity
More and more organizations are moving their freight to intermodal considering the factors
like reliability and capacity. Less capacity exists when the mode is rail or roads. Shippers on
the other hand get an advantage of better equipment’s and standardized transit schedule. The
savings organizations make by use of intermodal is generally used by them to streamline their
reverse logistics, resulting in additional savings with the organizations.
Features of Qube Logistics
The company Qube logistics is the largest import and export logistics organization in the
region of New South Wales. It grows with a strategy of integrating local logistics companies
and small size companies to create one big efficient company. This is the way Qube logistics
keeps increasing its network through acquisitions.
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The company Qube logistics operate across the Australia into freight depots, warehousing,
empty container parks, etc. It also has its biggest rail terminal network in the region of New
South Wales (Fullerton, 2014).
Main problems with current logistics network in New South Wales (NSW)
Logistic industry is highly unpredictable and competitive and thus it gets affected by numbers
of internal and external factors challenging its system’s proper functioning. Issues like
national level policies, regulatory issues, region wise planning and policies for development,
strategies related to state transport and infrastructure investment, etc.
1. Urban Congestion
Entire South Australia is deeply impacted with connectivity issues. The congestion results in
delays, increase in fuel cost and vehicle operating cost, increase in pollution levels, etc. The
travel time has increased drastically and is expected to worsen with increase of vehicles.
2. Access to multi modal transport
There has been adjusting of modal spilt of containers which moves to and fro the port, due to
the relocation of port activities between Port Jackson and Port Botany. For the freight
transfer, usage of newly built roads was denied by the local council. Their emphasis on the
use of railways for the transportation. On the other hand, specific routes were allotted by
railways for the 70% transfer of containers (Smith, 2015).
3. Conflict of Inland Depot
Nearly 65 hectares of unused area are connected through a track of railways to Port Botany. It
will become an intermodal facility in the year to come. This factor caused a difference of
opinions between local and state government and it became a point of conflict.
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4. Limited space in terminal and container storage
In a logistic network, the imtermodal boundary is the terminals. Reduction of cost and
maintaining shipping records track are done by container handling. With the increase in
demand on a daily basis, emergence of limited space problem will occur.
5. Recycling of the asset and its privatization
Australia’s second largest port for container is Port Blair, whose port lease is with NSW Ports
Consortium. The Australian Government has taken privatization as an assist recycling
initiative. There was a plan to build a tunnel between 2 places for eliminating the congestion
on present network, but with the change in local government post elections, toll taxes were
introduced and the plan is yet to see any future.
6. Downturn in commodity market
In the market of transportation, Qube is a new player, so to fight against the competitors, it
has to provide best quality services. But due to the downturn in the present market for
commodities, its operations can be affected unfavorably.
7. Unfavourable weather conditions
Unfavourable weather conditions affect the activities of logistics badly by making the process
of transportation slow. The flat tyre problem and expansion of rail tracks are common in high
temperature area. Shipping lanes, harbour facilities and infrastructure at the coast can get
affected the increase or decrease of sea level (Moniosa & Bergqvist, 2015)
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Develop Logistics Management Strategies
Logistics management involves a lot of steps and a lot of coordination. Its main objective
plans to coordinate all necessary steps systematically to achieve better service levels at the
lowest possible cost. Logistics management involves steps from picking up the goods from
start point till dropping the goods at the end point (Tseng & Yue, 2005). With the changing
factors and methods of supply chain management, logistics management strategies need to be
designed for different kind of products, different strategies for different customers and for
different locations. Care should be taken that the drafted design plan should be flexible
enough to bring in last minute changes basis the requirements (Pontius, 2017).
Elements taken care for designing the strategies:
Structural - A structural analysis of the organization is required to design a logistics strategy.
This covers analysing the number of warehouses, available area, distribution and channel.
Functional - Consider each functions excellence area to design a strategy.
Implementation - This element introduces new procedures and policies, brining changes in
previous plans and configuring the system (Slade, 2017).
Method / Solution to resolve the problems
The above mentioned problems can partly be solved by urban solutions, but would require
huge infrastructure investments along with generating social and environmental issues.
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Logistic Alliance - To have effective operational strategies at low cost and least investment,
the companies working in similar areas should collaborate and form an alliance that could be
mutually beneficial and together increase their strength to fight with any issues.
Rolling Horizon Approach - Small container space is one of the main problems faced in the
logistics industry, to resolve this issue, an approach of rolling horizon can be applied. This
approach is used when a large number of inbound, outbound and transit containers are to be
handled in a small place at the same time. When implementing, rolling approach, the leaving
time of a container is noted and that space is allocated to another container on the basis of the
work load at that particular time. This process is repeated for all the containers.
Reverse Logistics - This method is used for unusable products or for the products that are not
required anymore. In such cases, these products are either re-used in some other activity or
these products are moved to some other place. Reverse logistics work towards achieving
substitution, recycling, re-use and reduction.
Limited Capacity - This phenomenon is used in the absence of warehouse space, drivers,
machines, trucks, etc., by making use of empty space during return trips. This results in
effective utilization of resources and saves cost.
Intermodal - This method or mode of transport for goods is also used efficiently at remote
locations.
Transhipments - It happens in the freight vehicles which starts from the origin point, but
does not reach the final destination on time due to consolidation or break bulk (Hu, et al.,
2015).
Consolidation shipments if formed when many small shipments to get together to form a
bigger shipment. On the other hand-break bulk shipments are the method of breaking a
shipment into smaller shipments.
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This method uses less number of vehicles for larger distances and areas, also different size of
vehicles are used in this method in different phases of transit so as to achieve economies of
scale.
What if, Should NSW Government get involved in the resolution of problems
Australia has strict guidelines for transportation. The entire country is covered under certain
regulations, while the state also has their own set of regulations. In terms of logistics, the
regulations are related to size of vehicles, loads they carry, type of packaging, type of goods,
speed limits, etc.
Long term planning is required to achieve drastic changes in the state’s transport system
rather than just investing in the infrastructure projects. Ways or solutions need to be
identified to make use of existing infrastructure to its best possible. Long term identification
should be done in terms of future transport routes to have sufficient time for the construction
work and get it integrated with land use plans.
Infrastructure changes - An initiative of the government that could help Qube logistics would
be, to take steps to reconstruct and expand the port areas as less space and less containers is
available at many of the ports. A good investment would be required by government towards
the infrastructure changes, hence private sector finance should be used to cater to this up
gradation (Pemberton, 2008).
Better regulations - Streamlining the regulations that govern the road safety and heavy
vehicle movements should be done as many of the orders covered under these acts are
overlapping and does not solve the purpose.
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Rail Network improvement - Australia’s freight is expected to increase two folds in next 15
years. Hence, a strong rail network is the need of the hour as large quantities of freight can be
moved with low risk and low investment to big distances.
Future identification of key transport corridors should be done to ensure efficient land use
and achieve better infrastructure provisions (Department of Premier and Cabinet, 2016).
Few Initiatives being taken by the NSW Government - The infrastructure department of
NSW recommended some improvements to the NSW Government, on the basis of which the
NSW government has reserved amounts for various projects.
Area of Work Initiatives
Public Transportation
in Urban region
Amount reserved for Sydney rapid transit, Sydney rail future,
Bus rapid transit and bus priority infrastructure, project to reduce
travel time between Sydney and central coast,
International Gateways Road freight connections to be assessed from Port Botany to
West Connex, Rail freight assessment from Port Botany to
Moorebank, Work towards increasing capacity on Southern
Sydney freight line, continue the assessment at the congested
ports to increase space.
Urban roads Western Harbour tunnel, implement smart motorways,
Integrated infrastructure planning, funding and delivery.
Regional Transport Reserved amount for regional road freight corridor program,
regional growth roads program, fixing the country road and rail
program (Jarzemskiene, 2007).
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Sustainability
Companies are motivated to sustain and adjust themselves to the changing supply chain
system requirements. Sustainability is a strategic achievement of an organization by
integration of social, economic and environmental issues with the social, economic and
environmental goals through a planned coordination of processes of different organizations to
achieve long time goals (Roso, 2013).
Conclusion
Single mode of transport of goods consists of a lot of gaps in terms of security which affects
the sustainability and development of the transportation system. Many regulating measures
have been implemented by national bodies to fill these gaps, but the regulations do not
improve the overall security issues of transportation. A lot of effort goes into planning of
freight infrastructure and the government tries to make regulations for the proper operations
management that could be beneficial to all.
There exists a lot of strategic advantages at regional, state and national levels that support
development of intermodal. These strategic advantages are now being recognized by many
companies operating in the logistics and transport functions.
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References
Department of Premier and Cabinet, 2016. State Infrastructure Strategy, Available at:
https://www.nsw.gov.au/improving-nsw/projects-and-initiatives/state-infrastructure-strategy/
Fullerton, T., 2014. Qube logistics quietly posts ten-fold growth in three years, Available at:
http://www.abc.net.au/news/2014-06-25/qube-logistics-quietly-posts-ten-fold-growth-in-
three-years/5548924
Hu, Q., Corman, F. & Lodewijks, G., 2015. A Review of Intermodal Rail Freight Bundling
Operations. International Conference on Computational Logistics, pp. 451-463.
IBISWorld, 2017. Qube Holdings Limited - Profile Company Report Australia, Available at:
https://www.ibisworld.com.au/australian-company-research-reports/transport-postal-
warehousing/qube-holdings-limited-company.html
Jarzemskiene, I., 2007. The evolution of intermodal transport research and its development
issues, Available at: http://www.tandfonline.com/doi/pdf/10.1080/16484142.2007.9638145
Mathisen, T. & Hanssen, T., 2014. The Academic Literature on Intermodal Freight Transport.
Transportation Research Procedia, Volume 3, pp. 611-620.
Moniosa, J. & Bergqvist, R., 2015. Intermodal terminal concessions: Lessons from the port
sector. Research in Transportation Business & Management, Volume 14, pp. 90-96.
Mudie, A., 2015. Read this before you buy Qube Holdings Ltd shares, Available at:
https://www.fool.com.au/2015/08/03/read-this-before-you-buy-qube-holdings-ltd-shares/
Pemberton, C., 2008. Inquiry into Australia’s Future Infrastructure Requirements:Australian
Government - Infrastructure Australia, Available at:
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http://infrastructureaustralia.gov.au/policy-publications/submissions/published/files/
39_wingecarribee_shire_council_SUB.pdf
Pontius, N., 2017. Logistics Strategies for Business: 23 Experts Share Tips on How to
Develop a Winning Logistics Strategy, Available at:
https://www.camcode.com/asset-tags/how-to-create-a-winning-logistics-strategy/
Qube Holdings Limited, 2017. Qube official website. [Online]
Available at: http://www.qube.com.au/
Roso, V., 2013. Sustainable intermodal transport via dry ports - Importance of directional
development, Available at:
https://www.researchgate.net/publication/264818416_Sustainable_intermodal_transport_via_
dry_ports_-_Importance_of_directional_development
Sahin, B. & Yilmaz, H., 2014. An Approach for Economic Analysis of Intermodal
Transportation. The Scientific World Journal, p. 10.
Slade, S., 2017. 6 Strategies for Better Supply Chain Management in the Current Economy,
Available at: https://blogs.oracle.com/scm/5-strategies-for-better-supply-chain-management-
in-the-current-economy
Smith, K., 2015. Qube and Brookfield fight to acquire Asciano. IRJ Journal, Available at:
http://www.railjournal.com/index.php/australia-nz/qube-and-brookfield-fight-to-acquire-
asciano.html?channel=000
Tseng, Y. & Yue, W., 2005. The Role Of Transportation In Logistics Chain. Proceedings of
the Eastern Asia Society for Transportation Studies, Volume 5, pp. 1657 - 1672.
Trevaskis, P. & Ogilvie, D., 2017. Norton Rose Fulbright acts for Qube Holdings on first
major pre-commitment at Moorebank Logistics Park, Available at:
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http://www.nortonrosefulbright.com/news/155661/norton-rose-fulbright-acts-for-qube-
holdings-on-first-major-pre-commitment-at-moorebank-logistics-park
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