Regional Transport Networks – What’s needed THIS IS TODAY IS THIS TOMORROW ?

Regional Transport Networks – What’s needed

THIS IS TODAY

IS THIS TOMORROW ?

Road Freight – the challenge

The Road Freight Industry cannot meet the requirements of the future ……. It needs help from the rail industry

The road industry is desperately short of drivers

PBS vehicles, whilst bigger and possibly safer, will assist BUT …

- Who will drive them?

- Where will they be allowed to go?

- Will they have community acceptance?

Regional roads are in a very poor state of disrepair, they will only get worse- as a result trucking maintenance costs are soaring

There are too many trucking operators who give “lip service” to the rules- there should be a “license to operate” in the industry

The Road freight industry is in a lot of trouble in Regional Australia

The Cost Drivers

• Drivers wages: 60% higher in resource rich areas than in the South Eastern states.

• Fuel 30% to 35% of operating costs. 2 years ago $1.00 lt net - now $1.20 after rebates. From July 1, 2.4 cents reduced from fuel rebates Will add 1.5% to operating costs, not easily recoverable

• Maintenance Costs are up 30% majority of cost attributable to the poor condition of regional

roads - chassis cracking, trucks robustness tested, excessive tyre wear,

- to that add loss of productivity

Freight costs – future shock

• We predict:

Road transport costs are escalating at a faster rate than Rail transport costs

1. Today they are about equal

2. By 2015 Road costs will have increased by 22% and Rail costs by 10%

3. By 2020 Road costs will have increased by 53% and Rail costs by 32% - Drivers are in short supply / wages are to rise significantly

- Driver and fuel costs represent up to 65% of costs

- Carbon Taxes will also kick in ...... the cost to business is the big unknown

• Rail is a long term investment in the future of our regions and our nation and must be further developed.

One solution: Use BIGGER trucks Allow PBS approved vehicles; Triples, Super B’s & Road Trains

to replace Singles & B Doubles onto Regional roads

There are benefits:A trucking operator with (say) 50 B-double trucks using Triples instead could:

reduce the number of trips by one in four

save 2.5 million kilometres of truck travel annually

reduce operating costs by 15%

reduce the fleet to 38 trucks (25% fewer)

save 1.5 million litres of fuel p.a.

BUT …….. Where are the drivers with the skill to drive them ?

 PBS - applications are already in for Road Trains to operate on regional roads in Southern NSW

Road Train configuration - 31 mts long / ringfeeder & dolly connection

A Better Solution is to use the existing Rail networks, linked up by Road Trucks

to Regional Rail Hubs

Our Vision for the future:A Strategically positionedAustralia wide rail hub network- the NSW example

Cootamundra is the natural logistics location and coordination point for Riverina Rail Freight.Centrally located Cootamundra has direct National Rail Network linkages to North, South, East and West servicing Domestic and Export markets.

Cootamundranetwork hub 100kmservice radius.

Example: future Logistics Hub for a Regional area incorporating Road & Rail

Roads V’s Rail - it’s an investment issue

• Roads give a return to Government but Rail doesn’t• Govt. have no money for Regional Rail systems - clearly stated & likely to push for bigger PBS vehicles • Govt. want private enterprise to pay for rail infrastructure in

regional areas, but rail is not a short term investment - Private companies are about short term ROI (2 to 5 years)• We have very few rail operators and they all ride in on the

back of the existing deteriorating rail systems in the Regions• Private investment works where there is very significant and

regular traffic such as mining – impossible to justify with fluctuating and uncommitted

volumes from regional areasGovt. needs to rethink its obligations to regional communities

The Rail Blockages

• Regional Rail Freight Systems are controlled by very few operators

• These operators are (in the main) large corporations - Pacific National, Patrick’s, QRN, QUBE

• These corporations control networks, rail terminals & ports

• They exert “market control” by restricting rail services and access to rail terminals in regional areas

• They have shown little interest in developing Regional Rail services and divert assets to where they can get the best returns

• Customers and Operators are forced to rely overly on road trucks which are already under great pressure

• These Corporations are holding back the development of rail freight services in regional areas

The value of Road / Rail solutions

Case Study: Bathurst (Olympic Way) to the Hume Highway

Road trucks travelling from Bathurst area to Cootamundra and beyond

travel via Bathurst, Blayney, Cowra, Young, Cootamundra, to Hume Hwy

Based on 400000 tonnes p.a. (estimated annual volumes on this route)

• = 10000 B-Double truck loads p.a.

• = 20000 B-Double truck movements p.a. (10000 x 2)

• = 70 B-Double truck movements per day

• = 1 B-Double x every 20 minutes

Reopening of the Blaney / Demondrille rail line would significantly reduce the number of trucks on this route

Private investors reluctant to put up the $40 M + required so it will not be done!

An integrated rail network is vital to the regional areas of Australia

• Regular Rail Freight Services in Regional Australia are vital in enabling businesses to meet market needs and reduce reliance on trucks to transport their products from their suppliers and to their markets.

• We need assistance and encouragement from Government to allow us to invest in new terminals that meet the future needs of Regional businesses and communities

• Government & Business needs to address the current market control factors

• IF these market control factors and restrictive rail services to Regional communities continue then customers and communities, dependent on cost effective and efficient freight services, growth opportunities in Regional businesses and communities will remain stifled and market opportunities will diminish

• Investment in any new rail terminal is very high risk without customer support and guarantees of regular rail services to / from that terminal

• this is the challenge that we face in many parts of Regional Australia

Summary

Road Trucks cannot cost effectively do the job required in the regions

PBS vehicles are coming, councils will have to deal with that - These vehicles must be “very safe” on our regional roads - They must provide “real measurable benefits” to communities

The right solution is an integration of Road & Rail services We need designated strategically placed “Logistics Hubs”

Unless the Rail “market control” factors are challenged it will be a long hard road for everyone

Rail systems are a long term investment, not a short term quick fix

Mark Williams Business ManagerSutherlands TransportCootamundra Sanmar Consulting