BHP will increase the direct shipping of supplies from Singapore to Port Hedland, providing local business opportunities and improving regional road safety.
BHP has been trialling direct shipping to Port Hedland since 2020 and will now ship 7.5 per cent of the containerised supplies it receives into its Western Australian Iron Ore operations (WAIO) from all over the world through Singapore, directly to Port Hedland.
Before the trial began, BHP supplies for WAIO were shipped to the Port of Fremantle and were then transported 1650 kilometres by road to Hedland. The direct route is initially expected to keep more than 900 trailers off the route from Fremantle to Port Hedland each year, improving safety for transport workers, road users and regional communities.
Pilbara businesses will be able to benefit from the direct shipping route, through BHP's freight provider ANL. BHP plans to make this direct route open and available to businesses interested in reducing their transport costs for building supplies and consumer goods.
The move will also reduce the greenhouse gas emissions related to the transportation of the re-routed goods into the Pilbara by up to 75 per cent, per container, and reduce overall transport costs for supplies.
BHP's WA Iron Ore General Manager of Port Operations, Cindy Dunham, said since BHP began trialling the transport project, the business has seen safety, cost, efficiency and environmental improvements.
"This initiative not only improves efficiency, it also improves safety and environmental outcomes, thereby benefiting the whole community," Ms Dunham said.
"BHP would like to work with local businesses in Port Hedland to explore opportunities to optimise their own supply chains via this shipping route. We are committed to helping develop Port Hedland as a thriving, sustainable place to live."
Benefits of the new initiative include:
- An approximate six-day reduction in transportation time
- Reduction in risk of vehicle-related incidents with the removal of more than 900 trailers from long distance routes each year.
- Reduction in GHG emissions associated with the transportation of the re-routed goods of up to 75 per cent of CO2-e per container as a result of the shorter shipping route and fewer trucking movements.
- Improved schedule reliability.
- Potential flow-on benefits to local businesses by enabling them to ship directly to Hedland.
- The route could also be used to export used materials to be recycled, contributing to a circular supply chain.
BHP's Vice President of Maritime and Supply Chain Excellence, Rashpal Bhatti, said in addition to the direct shipping initiative, BHP and ANL would jointly explore further opportunities to support the reduction of shipping-related GHG emissions, including the potential use of alternative fuels, in alignment with both organisations' respective sustainability goals under a recently signed letter of intent.
"In addition to the sustainability benefits of reduced diesel truck road transit, we are working closely with ANL to identify and assess other opportunities to reduce GHG emissions and are actively looking at using alternative, lower-emission fuels like biofuels and LNG blended with methane on the direct shipping route," he said.
Pilbara Ports Authority CEO Roger Johnston said direct shipping in the Pilbara has grown faster than predicted since the first call in late 2020, with benefits to the port, proponents, and the local economy already being realised.
"PPA is proud of the work it has done to make direct shipping possible and has already trebled its First Port of Entry facilities to accommodate growing demand," Mr Johnston said.
"The service is generating more inbound and outbound freight opportunities, which in turn creates local opportunities for container de-stuffing, warehousing, and distribution.
"A recent report by ACIL Allen estimates the economic benefit of near-port freight efficiencies to be approximately $5 million per annum, while imported cargo freight efficiencies are in the order of $60 million per annum."
Footnote regarding GHG reductions:
- Trucking emissions intensity factors sourced from UK Government's Greenhouse Gas Reporting: Conversion Factors 2021. Trucking routes modelled are limited to Perth to Port Hedland.
- Shipping emission intensity factors sourced from BHP Scope 3 Category 4 carbon accounting averages for container vessel TEU in FY21. Shipping routes modelled are limited to Singapore to Perth and Perth to Port Hedland.
- Both sets of emission intensity factors and subsequent modelling are aligned with BHP's Scope 1, 2 and 3 GHG Emissions Calculation Methodology 2021, which can be found here: https://www.bhp.com/-/media/documents/investors/annual-reports/2021/210914_bhpscope12and3emissionscalculationmethodology2021.pdf
