A sophisticated transport logistics modelling tool is unlocking new market and investment opportunities across Australia and in some cases, justifying the viability of markets previously considered too complex to assess.
The modelling process and underlying framework, developed by GHD Advisory, enables the assessment of a broad range of logistics options, from dry bulk commodities (including barge transhipment), oil and gas (including platform supply), containerised exports, agricultural exports and general freight.
The tool provides significant benefits for concept, prefeasibility and optimisation analysis, as the approach is based on a highly configurable, transparent and consistent platform that allows a large number of options to be assessed efficiently.
Rapid assessment of options
"Assessing the logistical aspects of new market opportunities, testing various impacts on your supply chains, and exploring ways to minimise costs are all key to staying competitive and sustaining growth," says GHD Advisory's Tristan Anderson, Logistics and Infrastructure Team Leader.
"Using the modelling tool and associated process and framework that we've established, we can quickly assess all reasonable options, including time and cost constraints, as well as testing novel approaches that would usually be costly to assess, or excluded from typical analysis."
The modelling tool provides many benefits to clients, including the ability to:
- Identify superior transport strategies and limit the number of options for further detailed studies or simulation
- Quantify operational outcomes to understand the level of deployed capital required
- Understand the breakdown and proportion of key logistics costs
- Understand supply chain risk and cost impacts from changes to operations and cost inputs
- Optimise supply chain costs and demonstrate where the greatest savings can be achieved
- Understand the potential competitive position by capturing geographic advantage/disadvantage in reaching target markets
- Assist in the development of marketing strategies by informing the potential impact on contract prices
The modelling tool has already attracted multiple clients from the mining, oil & gas, agriculture and port and transport sectors. The following examples illustrate some of the benefits and the tool’s flexibility.
Developing commercial aquaculture in north-west Queensland
| Situation |
| To promote and grow a sustainable aquaculture industry in Queensland, GHD Advisory carried out transport logistics modelling as part of a broader analysis on viable aquaculture business models for the Aquaculture Development Area (ADA), an initiative led by the Regional Economic Development group of the Department of State Development in Queensland.
Given its ideal growing conditions and the increasing demand for seafood, Queensland provides many opportunities for aquaculture investment. The industry is competitively positioned to produce high-value aquaculture products thanks to:
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| Solution |
GHD Advisory’s transport logistics modelling incorporated a variety of network considerations including:
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| Result |
| The modelling demonstrated that aquaculture industry is viable in north-west Queensland, but its success hinges on supply chains that have all weather access or reduced isolation time (i.e. where vehicular access is not possible). |
Transport strategy for potential new mine
| Situation |
| Mining company PanAust Limited needed to develop a transport logistics strategy as part of the feasibility studies for the Frieda River Copper and Gold Project, a large open cast mine and associated infrastructure in the Western Province of Papua New Guinea. The mine is located along a tributary of the Sepik River. |
| Solution |
| GHD Advisory undertook transport logistics strategy development and analysis, including the review of operational constraints, development and assessment of operational strategies, initial design and costing of infrastructure required to support the logistics system, and construction logistics for the development of the project. |
| Result |
| The process involved tailoring the modelling framework for analysis and evaluation of different option combinations, qualitative assessment for risk and success drivers of potential options in order to provide the lowest cost to risk outcome for the project. The preferred option identified using the logistics modelling tool resulted in a net present cost saving of approximately USD2 billion over the 20 year project life compared to the original transport strategy defined by the client. |
Options assessment for logistics hub
| Situation |
| Logic is an existing industrial and logistics hub located south of Albury-Wodonga. As a Council-owned development, Logic engaged GHD Advisory to conduct a development options assessment and supply-chain cost assessment to assess the cost and freight catchment implications of various new infrastructure developments such as new Inland Rail line and port interface upgrades. |
| Solution |
| GHD Advisory calculated road vs rail transport costs under multiple scenarios for both Inland Rail and regional rail. |
| Result |
| The project defined and quantified logistics cost benefits to future tenants and users of the facility before and after the development of Inland Rail, including a comparison of rail costs against road freight options. |
Value proposition of facility
| Situation |
| Interlink SQ is a private development entity with significant land holdings in a key growth area for industry and logistics in South East Queensland. Interlink SQ engaged GHD Advisory to model rail vs road transport costs including consideration of the new Inland Rail line. This engagement also included a market assessment, options evaluation and tenant pursuit strategy. |
| Solution |
| GHD Advisory developed a modelling and analysis framework which combines transport cost savings with land value data to look at combined cost saving positions for different types of tenants. |
| Results |
| Compared various cost scenarios and defined and quantified logistics cost benefits to future tenants and users of the facility and offered assessment of potential land value effects. |
Flexibility and reliable data inputs essential
"One of the unique features of this tool and approach is that it's built on well-founded estimates for the major logistics cost elements, and it's incredibly flexible to accommodate and respond to changes in key values," says Tristan.
"We can adjust parameters that are both project- and transport mode-specific, and we also have a provision to over-ride the default calculated cost inputs if these alternative costs are negotiated and confirmed."
Results generated by the modelling framework can be presented at an aggregate and disaggregate level. For example, aggregate results are presented by transport function on an annual cost basis, cost per tonne, cost per TEU (twenty-foot equivalent unit) and proportion of the total cost. Disaggregate results can be defined by transport function, and presented by major cost components on an annual cost basis, cost per tonne and/or the proportion of the transport function cost.
In addition to costs, the modelling framework can be used to produce or capture non-financial outcomes and generate inputs to other analytical platforms to provide business-critical data, such as key operational metrics for each transport function, intensity/heat maps, and cost to risk proxy outcomes of scenarios.
For more information visit Aquaculture Development Area (ADA), an initiative led by the Regional Economic Development group of the Department of State Development in Queensland.
For more information, connect with our professional:
Tristan Anderson
Leader - Logistics and Infrastructure Policy
+61 7 3316 3780
Email Tristan Anderson