State run Railways

  BrentonGolding Chief Commissioner

Location: Maldon Junction
Mod note: topic split from "New rail hub nearly complete in just six months" as it was pointed out it was off topic yet a good set of posts. - dthead

What is stopping Victoria south Australia and Western Australia especially from getting terminals up and running once again ?
Part of the problem here is that you seem to be stuck in the age of State Government run railways. In the "good old" days if traffic was deemed viable (or in many cases even if it wasn't) a line or terminal would just pop up effectively paid for by the state.

Since Governments saw fit to give away the priveledge of running the railways it is private enterprise who have to do the heavy lifting. They need to come up with a business case and present it to Council, Government etc for approval and perhaps some (but not all) funding. In this case it was Crawfords who pitched this idea. They had a customer all set to go and they planned and funded the business case for the terminal.

I have no idea what goes on in WA but in Victoria as has been said time and time again much of the state is too close to the ports to make rail viable at this point in time. That said there are a number of interesting projects that have been done or are in the pipeline - Dooen, SCT at Wodonga, the new Benalla concrete works to name a few.

And South Australia? The problems facing rail in my home state have been documented ad nauseam on RP, pretty much the only reason there is any freight rail in SA at all anymore is because it is between Melbourne and Perth!

The Crawfords development at Werris Creek is indeed very exciting news for rail. If nearby Tamworth goes ahead and both are successful who know what may follow.

But until that happens OR until Government wakes up to the fact that rail is a big part of the answer to our transport emissions problems then asking all the questions in the world on Railpage Australia™ will not change the facts - there is not the customer demand for freight rail to justify the huge investments required for intermodal terminals all over every state.


Sponsored advertisement

  LancedDendrite Chief Commissioner

Location: Gheringhap Loop Autonomous Zone
@BrentonGolding has hit the nail on the head, although perhaps some further historical context is required to understand why there isn't as much non-mineral freight on rail as there has been in the past.

Part of the problem here is that you seem to be stuck in the age of State Government run railways. In the "good old" days if traffic was deemed viable (or in many cases even if it wasn't) a line or terminal would just pop up effectively paid for by the state.
In the 'good old days' road freight was in a very different position. Trucking was in its infancy - companies were small, many trucks needed to be imported at great expense and roads were generally in quite a poor condition compared to today. Intrastate 'regional' trucking was highly regulated by State Governments via either a permit or 'road tax' system (depending on the state: Victoria had a permit system, NSW had a road tax) that limited competition with the state-owned railways. Interstate trucking was also regulated (illegitimately cf. Hughes and Vale Pty. Ltd. v. The State of New South Wales and its judgement regarding §92 of the Australian Constitution).

This regulation was instituted to protect the railway's role as a financially sustainable common carrier. Being a common carrier meant that the railways couldn't refuse to carry freight and had to charge regulated rates. These rates incorporated a large degree of cross-subsidisation so that less bulky, higher value goods (farm machinery) could offset the cost of transporting bulkier, lower value goods (e.g stockfeed). Rail freight requires a critical mass of customers and freight volumes to be able to sustain quality service to all customers. If you don't have high enough freight volumes it becomes uneconomical to run the frequent freight trains required to provide that service. If you don't have enough customers, the loss of a single customer can result in an irreparable loss of freight volumes. This fundamental principle is what caused the downfall of general freight volumes carried on rail in Australia that continues to the present day.
However, that is just a mechanism for turning external factors into that decline in rail freight. So we will now turn to the other causes. These have been hashed out many times here and elsewhere, so feel free to stop reading past here if you know the hymn sheet I'm singing from:

  • Interstate highways: the strong and continuous investment in interstate highways and the creation of motorways/freeways has resulted in safer and more efficient trucking. Make no mistake: freeways are built to carry and are paid for (the indirect subsidisation of road freight by governments notwithstanding) by commercial road freight traffic, not personal cars.
  • Bigger trucks: the rise of the semi-trailer through the 1950s was a step change in flexibility and efficiency for trucking that allowed it to cannibalise much of the high value freight that helped prop up the rail freight ecosystem. In the 1980s and 1990s the advent of the B-Double reinforced this. It's widely recognised in logistics that the Australian B-Double running linehaul (i.e customer-to-distribution centre and vice-versa) is largely superior to using intermodal rail freight on the East Coast. Indeed, Australia runs some of the largest trucks and trailer combinations in the world - look at the length and tonnage of American 'tractor-trailers' and 'b-trains' compared to Aussie semi-trailers and B-Doubles.
  • The size of railway networks: As the customers left for road, the rail freight network has shrunk as lines become uneconomical to run. This in turn reduces the number of available customers for rail, leading to a vicious cycle. Thankfully since the 1980s this has largely ceased - but this was because there was so little left to cut by then.
  • Railway gauge: The 'gauge muddle' is a costly impediment to efficient rail freight networks. As much as a certain young poster likes to protest otherwise on this forum, the Victorian (and historically South Australian) broad gauge networks in particular have created a situation where customers on those lines are unable to economically transport goods to interstate locations by rail. Queensland does not deserve to get off lightly either, but thanks to the nature of their domestic freight task (largely centred around a very long coastal corridor) it is still reasonably competitive with road.
  • Privatisation and the advent of open access regimes: If you have a single freight train operator you can run a more sustainable operation with a smaller customer base because you have no competition. This holds true regardless of who owns that rail freight operator, be they state or private. The privatisation debate is a bit tired, but I'd like to point out that open access regimes can also be counter-productive, because having multiple rail operators competing with each other for the same customer base can result in unproductive cannibalisation that can harm the viability of lines. Therefore, I argue that open access is not a blanket solution and that it needs to be considered on a case-by-case basis. Whilst open access is essential and highly productive on the ARTC East-West corridor, it may not be so on intrastate lines, particularly seasonal branch lines. The ACCC has an ideological bias in favour of open access which I think these days is potentially unproductive for intermodal rail freight. My opinion will be shaped largely by the recent Aurizon Intermodal saga and whether the new arrangement results in a net loss or gain in rail's market share in Queensland.

If you would like to read more about this historical context, I highly recommend David Wilcox's biography of Ken Thomas, 'The Truckie Who Loved Trains'. Ken was the founder of Thomas Nationwide Transport (TNT), which later became Toll. It's a comprehensive account of the era I've been referring to as Ken's presence in the transport industry effectively spanned the entire post-war era until privatisation.

So we have examined the causes of this loss in rail freight market share over the decades, but what of the actions that can be taken now? To me there are two courses of action:
  1. Subsidise rail freight, largely through state & federal investment in new and existing rail freight corridors (especially gauge standardisation). The justification for this is that the wider benefits of rail freight (lower trucking volumes leading to safer roads and the environmental benefits of burning less fuel per Gross Tonne Kilometre of freight) are not adequately accounted for under the current regime.
  2. Make road freight more expensive through rigorous enforcement of existing regulations, road user pricing and by banning or placing onerous regulations on trucks larger than single semi-trailers. This is justified in a similar manner to course of action no. 1, but makes the cause of the problems pay instead of subsidising the competition.
Both are equally viable and necessary if Australia is to take full advantage of rail freight.
  SinickleBird Assistant Commissioner

Location: Qantas Club at Mudgee International Airport
Excellent summary, LD.

Warrants something much stronger than an “agree” button.
  potatoinmymouth Chief Commissioner

I’d like to add my plaudits. An exceptional post.

Sponsored advertisement

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.