Article: Moving freight on track

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Article: Moving freight on track
by PAUL CLEARY
From: The Australian
July 21, 2012 12:00AM

http://www.theaustralian.com.au/national-affairs/moving-freight-on-track/story-fn59niix-1226431213808

THE grand old city of Chicago, 1300km west of New York at the foot of the Great Lakes, has been the heart of the US rail freight system for the past 150 years, and it remains so to this day.
While the US is home of the Kenworth and Mack prime- movers seen all over Australian roads, reform and investment in the past three decades have underpinned a rail renaissance in the country and reinforced its role as the mainstay of the national freight system.

US rail freight is among the most cost-effective transport systems in the world and a key driver of productivity.

It is also profitable, which explains why canny investor Warren Buffett has in recent years sunk more than $30 billion into buying one of the biggest rail companies in the country.

Unlike the US, Australia doesn't have a rail hub like Chicago and most of our railways are government-owned, slow and poorly used, especially on the east coast, where rail's market share has declined from 30-40 per cent in the 1970s to about 10 per cent today.

...In the US, rail still commands a 40 per cent share of intercity freight.

One-fifth of the freight moved in this country goes on rail - a figure inflated by mining shipments - even though it is half the cost of road, generates 30 per cent of the greenhouse emissions per tonne kilometre, and is much, much safer. Road accidents involving heavy vehicles have led to 1673 fatalities in the past seven years, and the accident rate is seven times that of rail.

Freight volumes in Australia are forecast by the federal government to double by 2030, and without radical change Australia will be even more reliant on road freight. The cost to society, the economy and the environment would be onerous.

The response so far has involved about $3 billion in federal government investment to renovate century-old networks and build a dedicated freight line through Sydney.

More investment is planned under a public-private partnership to build a giant road-rail terminal on the edge of Sydney, but these reforms will still mean that freight trains chug along the crowded coastal corridor.

As Woolworths logistics supremo Penny Winn tells Inquirer, these plans "won't solve the problem" and "won't be a game-changer". Winn would know, as her company has shifted 34,000 tonnes of its Melbourne-Brisbane freight on to rail, even though it takes much longer. "The best solution is an inland rail line." she says. "The challenges will remain when we get the northern corridor."

An inland rail line wouldn't be height restricted and could run trains with stacks of two containers on each wagon.

As Winn puts it, these trains could "really move a stack of freight", just as they've been doing in the US for almost 30 years. The inland rail line would involve building about 670km of track to create a 1731km line connecting Brisbane and Melbourne at a cost of almost $5bn. A July 2010 report commissioned by Infrastructure Minister Anthony Albanese said the line, which would take eight years to build, could become commercially viable next decade.

The government should re-examine building the project from 2015 onwards, it said.

The inland line would also create Australia's first genuine rail hub in the city of Parkes, NSW, which is the only place where the Sydney-Perth line intersects with the inland north-south corridor.

Located 360km west of Sydney, Parkes has in fact been trying to assume the role of Australia's Chicago ever since humans first walked on the moon in 1969, says Mayor Ken Keith.

At the time, Jack Scoble, a lean and wiry World War II veteran, was mayor. He lived long enough to see himself played by Roy Billing in the film The Dish, but his grand idea of turning Parkes into the freight hub of Australia has been a slow train coming.

Scoble, who ran a farm equipment business in the rural town, realised back then that Parkes was perfectly positioned for freight companies to reach 80 per cent of the Australian population within a day.

Parkes is already operating as a road and rail freight hub of sorts. Freight companies have bought into a new 500ha logistics hub on the western edge of the city, but Queensland freight travels via road because the railway is incomplete. That is why 1200 semi-trailers a day - almost one every minute - travel through the city, Keith says.

Even if this mammoth project gets built, doubts remain on the ability of government to make the switch from road to rail happen, especially given the powerful vested interests in the trucking industry and the large numbers of jobs at stake.

Keith laments the lack of political interest and vision for the inland rail project in Sydney's Macquarie Street. He complains about the "Sydney-centric" bureaucracy that seems concerned about taking economic growth away from the capital.

Keith argues that the inland railway and Parkes hub would drive the development of other regional centres, notably Toowoomba in Queensland.

Private rail businesses also say Australia lacks political will to give rail the role it deserves. John Balassis, managing director of the ATEC Rail Group, which invests in building new railways, says state governments have been especially tardy in failing to give freight a higher policy priority.

"My challenge to any government is: show me your minister for freight," he says.

In a commodity exporting nation, rail freight would have a competitive edge if governments focused on making better use of limited port infrastructure, Balassis argues.

While government has been investing in rail of late, it may not be enough to make the switch happen. Senior executives in the government-owned Australian Rail Track Corporation do not have contracts that reward them for securing more market share for rail. ARTC's main mandate seems to be an engineering one, rather than having marketing people dedicated to growing their business.

Anthony Albanese is focused on building a freight hub at Moorebank on the edge of Sydney to improve management of the two million tonnes of freight that passes through Sydney each year, even though it is not destined for the city. Without an inland rail route, this figure would rise to five million tonnes by 2030, he told a recent conference in Parkes.

At a time of soaring freight volume, the lessons from Chicago are compelling, even those dating to what might seem a bygone era.

As a result of its pivotal position in the rail network, Chicago became the centre of the booming mail-order businesses set up by firms such as Sears, Roebuck and Co in the late 1800s.

In the 21st century, Parkes and other inland cities could emerge as major transport centres that manage the freight generated by the growing e-commerce trade.

Online shopping is costing jobs in retail, but it stands to create jobs in the wholesale and transport industries. If these jobs could be generated in new logistical hubs built around inland rail, that would be a great thing for regional Australia - and for everyone who wants to see a more efficient and safer transport system.

[somebody]

Trouble with the inland line is that it sinks any chance of getting more investment in the coastal route.

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"Private rail businesses also say Australia lacks political will to give rail the role it deserves. John Balassis, managing director of the ATEC Rail Group, which invests in building new railways, says state governments have been especially tardy in failing to give freight a higher policy priority."

Nods wholeheartedly.