Coal Chain board president Seamus French described the issue as a "mish-mash" between demand for coal products and the capacity of the port and rail systems to meet that demand.

French said the problem is that the three links in the coal supply chain - the coal producers at the mines, the rail system and the port system - are working independently of each other.

"To get the coal out efficiently with minimum waiting time at the port - those need to be integrated and linked, and that really hasn't happened because there's very different parties operating the coalmines, operating the rail infrastructure and operating the port," he told International Longwall News.

French said disorganisation in the supply chain is having a significant impact on the Australian coal sector, costing US$500 million in demurrage costs and reducing the port's capacity by up to 10 million tonnes per annum.

"On average there's about 45 ships waiting there for about 35 days and the total demurrage bill for the industry is in the order of half a billion, so $US500 million in 2007, and that is money that is wasted," he said.

"In terms of the actual volume getting out through the port, we're not getting anywhere near the stated port capacity and at the moment I think there's somewhere between 5 and 10 million tonnes per annum in terms of lost exports."

As it is, French said the coal chain is already well on its way to becoming more cohesive. To support the development of the Coal Chain board, key people from each link of the supply chain are in the process of signing a memorandum of understanding to declare that they will work together as an integrated team.

"What we're trying to do at the moment is actually get all of those people in one room at the CEO level, [to] understand the total system, where the bottlenecks are and what we collectively have to do to de-bottleneck the system."

The recent appointment of Ross Dunning as full-time central coordinator, responsible for coordinating the entire chain and establishing those decisions that need to be made by the board, is another step in the right direction.

French said with these measures in place, it will be easier to identify issues within the supply chain, and that once they know the issues they can decide as a whole what needs to be done.

"The system can't be de-bottlenecked at any one of the levels or in any one part of the system, it's an integrated system, and to really get the whole system running properly requires all the participants in that system to come together and make collective decisions."