Australian Logistic Council Dialogue. 1. Freight Data 2. Short Haul Rail. Gary Dolman Head of BITRE 21 April 2016
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1 Australian Logistic Council Dialogue 1. Freight Data 2. Short Haul Rail Gary Dolman Head of BITRE 21 April 2016
2 1. Freight Data BITRE Collecting freight data for over 40 years IA National Land Freight and Ports Strategies (2011) Collaborative Freight and Port Initiative BITRE support through: National Road Freight Survey (by ABS) Improved Waterline indicators (with Ports Australia) New Freightline series (by commodity) Bulk Ports report (2013) Annual Trainline report (with ARA) Commodity projections through ports (forthcoming) Telematics based road freight data (with ALC and ABS) Customs data (with Border Protection)
3 Overview of Freight Movements Data Performance: Volume Commodity Spatial Timely
4 ABS Road Freight Movements Survey results released November 2015 Key results include: First survey for 13 years Intercapital approximately 13.3% of all road freight in Sydney Melbourne 4.4% Sydney Brisbane 2.1% Melbourne Brisbane 0.8%. National Road Network accounts for approximately: 40% of all heavy vehicle use across Australia 18% of all light vehicle use across Australia
5 Freightline sugar movements North Queensland cane sugar flows Key results: Cane sugar flows million tkms Raw & refined sugar flows 1346 million tkms (~85% shipping Nth Queensland to Melbourne) Molasses flows 215 million tkms Total task million tkms Approx. 0.4 % of total domestic freight task But 1.3% total domestic coastal freight
6 Future planned Freightline issues Rice freight movements preliminary estimates Resources & energy: Coal (shortly) Petroleum & petroleum products Fertilisers Agriculture Grains (cereals, pulses & canola) Rice Cotton Other Road freight overview
7 Commodity trade projections & port capacity Long-term projections of major import/export commodity trade flows Assessment of port infrastructure capacity Example projections sheep meat (below) and meat exports & port capacity. Port capacity
8 Joint BITRE-ABS-ALC road freight data project Indicators Initially GPS data 1. Freight travel time on key freight corridors 2. Congested freight network locations Later in-vehicle and consignment data 3. Average freight vehicle performance (travel time, idle time, network speed, fuel use) 4. Origin-destination freight movements (origin, destination, commodity, mass/volume, route)
9 US Industry Report - Example Congested locations Average travel speeds
10 Early engagement promising Truck numbers Trucks stopping
11 2. Short-haul rail
12 Road Rail Rail Sea Conceptual framework Short-haul rail should not work because of the short distances: Transport cost per container Road 2 Rail Sea Rail Lower drayage and terminal costs 1 Drayage and Terminal costs A A B Distance A = sweet spot distance of 1000 less than kilometres 1000 kilometres
13 Road Rail Conceptual framework Short-haul rail should not work because of the short distances: Transport cost per container Road Rail 2 1 Drayage and Terminal costs A A Distance A = sweet spot distance of 1000 less than kilometres 1000 kilometres
14 Why short-haul does work 1 Minimising terminal drayage costs Maritime containers involve drayage at one end (hinterland) only Value-adding at the hinterland terminal leads to drayage to/from the terminal being part of the logistics and production task and not a rail-specific transport cost Tight shipper catchment around the hinterland terminal Peaco processing plant and intermodal terminal, Donald, Victoria
15 Why short-haul does work 2 Differential linehaul costs between rail and road Train economies of density have been captured ( long trains ) Dominant (anchor) customers with regular (non-seasonal) demand Logistics that encourage consolidation at hinterland terminal Trend towards bulk commodities in containers Larger container vessels Railway track access fees that are less-than-full long-run cost recovery Low truck productivity Road congestion slowing truck/driver utilisation and (related)... Long distances between hinterland and port reducing truck/driver utilisation SCT intermodal terminal, Penfield, South Australia
16 Why short-haul does work 3 Agents encouraging short-haul/hinterland terminals Those demanding services: 1. Direct financial advantage o Logistics companies/shippers: Superior financial outcome Those supplying services: 1. Business opportunity o Train/railway operators: offering shuttles o Terminal owners: enhancing terminal throughput 2. Operational strategy o Port owners: transfer activities from scarce port land to offsite locations; port expansion conditional on reducing externalities 3. Economic factors o Governments: environment, congestion, local development policies 4. Competitive strategies o Port owners/stevedores/shipping lines: hinterland terminal/shuttle used to enlarge port throughput by making the port more accessible (bigger catchment area) and offering an additional service option
17 Tauranga Committed Agents
18 Why short-haul does work Elements of each of these factors may sustain services despite the adverse economics 1 Minimisation of drayage 2 Low rail linehaul costs and high road costs dominant customers/distribution centres low track access charges low truck/driver utilisation Interest groups that are motivated to encourage 3 Interest groups that are motivated to encourage short-haul/hinterland terminal short-haul/hinterland terminal via terminal value-adding
19 Why short-haul does work... and the principles are consistent with experiences! Consider experiences with: o Minto: short-haul, with clustered major distribution centres, regular traffic (electrics, maltings, paper), poor road vehicle utilisation o o o o Altona: short-haul Cargo Sprinter train, but set against fast road links and short trains Somerton: short-haul, which was guaranteed to succeed, with clustered major distribution centres but excellent road vehicle utilisation Shepparton: medium-haul, served by existing Tocumwal train, with significant regular customers, but with road vehicle utilisation then being enhanced by road upgrades Penfield: short-haul, with a single dominant 4PL * logistics customer and regular export traffic, with negligible drayage Starting operations from existing traffic flows/anchor shippers reduces the need for deep pockets to sustain operations through a protracted traffic build-up period * non-asset owning comprehensive service provider
20 Why short-haul does work Thus the list of factors that are necessary for short-haul to occur is relatively short Drayage minimised: value-adding terminals 2. Relatively low rail linehaul costs 3. Motivated interest groups Short-haul rail is the economics of inland ports. Costs Road Rail A sweet spot Distance
21 Conclusions - with a focus on rail networks Freight data improving opportunities to crack commodity, spatial & timeliness problems Improved data can identify regular high volume movement of consolidated freight Rail s strength Short-haul rail can work Where road freight costs are relatively high And where inland terminals add value And with motivated agents
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