WHILE Australia is a global leader in moving bulk commodities by rail, carrying nearly three quarters of the country’s total, rail’s share of the non-bulk freight market is just 17% and continuing to decline.
In the United States, by contrast, rail is responsible for 28% of freight tonne-km and this figure is growing, while in India rail’s market share is 26%.
When it comes to inter-capital freight, Australian rail’s share is only 11% across the eastern seaboard, and as little as 2% on the busiest freight corridor between the two largest cities, Melbourne and Sydney, down from about 40% in the 1970s.
Less than a third of freight is on rail between Melbourne and Brisbane, which will be served in the future by the 1727km Inland Rail project. On the corridor between the eastern states and Perth, rail accounts for the majority of non-bulk freight.
Inland Rail involves upgrading and realigning parts of the line between Melbourne and Brisbane to increase competitiveness with road transport. However, the project is proceeding at a glacial pace with completion now extended to 2027. There is uncertainty over where it will terminate in Brisbane and the cost of the project has ballooned to $A 31bn ($US 20.9bn), double the original estimate.
An independent review of Inland Rail commissioned by the federal government and published in January 2023 recommends that the project should finish at Ebenezer, about 50km west of Brisbane, with connections to the Port of Brisbane by road and rail infrastructure unable to accommodate double-stack container trains.
The review’s author, Dr Kerry Schott, says the project was late and over budget. One of her most important tasks was to assess the extent of these problems. “In this I have failed as there is insufficient certainty about the completion date and the final cost to have confidence in the current estimates,” she says.
The freight and logistics industry has now accepted that Inland Rail will end short of the Port of Brisbane, leading some industry figures to question the project’s viability as well as the transit times that it hopes to deliver.
Nevertheless, the Australasian Railway Association (ARA) remains confident that Inland Rail will have a significant impact on freight in Australia as well as offering economic, environmental and social benefits. “It will get over 200,000 trucks off the road each year and vastly improve the capacity, capability, and interoperability of the national freight rail system to better meet market requirements,” says ARA CEO, Ms Caroline Wilkie.
“It will enable separation from busy metropolitan passenger networks across the East Coast and build resilience into the network in the face of extreme weather events and other challenges.”
Landmark research
To try and correct this imbalance, the industry is lobbying hard to get a bigger share of the freight cake. To make the case, the federal minister for infrastructure, transport, regional development and communities, Ms Catherine King, together with ARA and key industry representatives, jointly released the findings of a landmark research project in November, which found that Australia needs to boost rail freight’s modal share to meet future transport needs, reduce emissions and encourage economic growth.
In response to the research, the rail industry has launched the Future of Freight campaign, which makes several key recommendations to the industry and government that would enable rail to play a far greater role in carrying freight.
The campaign is centred on the comprehensive research, which was led by the Australasian Centre for Rail Innovation (ACRI), with input from the ARA and Freight on Rail Group (Forg), and supported by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts.
“Our freight task is significant and growing and we need a resilient, reliable and efficient national rail freight network to support the economy and community.”
Ms Caroline Wilkie, ARA CEO
The research comes shortly after a joint submission by the ARA and Forg to the Australian government’s review of the National Freight and Supply Chain Strategy that showed disruption to freight services and train accidents have cost the economy hundreds of millions of dollars in recent years.
Wilkie says the research found the under-utilisation of rail freight was a missed opportunity that was costing the Australian economy while standing in the way of reaching net-zero targets. “Our freight task is significant and growing and we need a resilient, reliable and efficient national rail freight network to support the economy and community,” she says.
“Road and shipping cannot alone meet this demand, and new policies and more strategic investment is needed to support greater use of rail.”
Modal shift
Earlier ARA research shows that a 10% modal shift away from road to rail between major state capitals in Australia would reduce the social and health costs from road emissions and accidents by more than $A 700m per year.
In addition, with rail freight generating 16 times fewer carbon emissions than road, boosting its modal share is a key strategy to achieve the Australian government’s emissions reduction target of 43% by 2030 and net zero by 2050.
Forg chairman and Aurizon managing director and CEO, Mr Andrew Harding, says boosting the role of rail freight on key interstate freight routes, and particularly between Melbourne, Sydney and Brisbane, should be a key focus for governments and the rail industry.
“Melbourne - Sydney - Brisbane is a corridor where rail can do the heavy lifting for customers and the economy, while significantly reducing carbon emissions for the transport sector,” Harding says. “Rail freight is up to 16 times less carbon-intensive than road.”
One of the key points made in the Future of Freight report was that the Australian rail freight sector was operating on legacy infrastructure that has been built to different standards. These different approaches determine the trains that can be used and the policies and procedures that govern freight operations across the country.
“More investment is urgently needed to increase the resilience and productivity of the network.”
Mr Andrew Harding, Aurizon managing director and CEO
The report also identified capacity constraints on the east-west corridor and extreme weather events as having contributed to extended delays to freight trains. It calls for new infrastructure and upgrades to address these issues.
Another area requiring attention, the report says, was the creation of well-located intermodal terminals supported by improved technology and systems. These improvements can make a significant difference to rail freight productivity. Again, significant investment is required.
Some of the other constraints identified as hampering efforts to grow market share include:
• a lack of a level playing field between modes, making it harder for rail to compete with road
• a lack of interoperability between jurisdictions - rail operators using multiple networks have to manage up to seven different regulatory frameworks
• poor harmonisation of safety standards, operating rules and processes and regulations
• rail infrastructure gaps impacting transit time, reliability and availability
• no national body to mandate harmonised principles, standards and processes, and
• a lack of transparent freight data and accurate cost:benefit analysis when assessing private and public infrastructure investment projects.
The report suggests several practical steps that could be taken to increase rail’s modal share, including infrastructure investment with a focus on resilience and reliability, enhanced collection of road and rail use and train service reliability data, and a review of cost:benefit analysis tools to ensure that economic, social and environmental benefits are fully considered when deciding to invest in rail or road projects.
The report makes 10 recommendations:
• set a clear freight objective
• assess the full benefits that freight projects have to offer
• promote investment in efficient rail freight infrastructure
• ensure a national focus on safety and productivity
• harmonise complex regulations
• promote opportunities to expand the rail freight market
• drive policy to ensure the right mode is chosen for every freight task
• improve freight access to metropolitan areas
• align freight services to customer needs, and
• transparent disclosure of traffic census data by state transport departments to provide a clearer understanding of road freight operations.
Wilkie also identifies three initiatives that would help boost rail market share and which ARA believes could be implemented quickly:
• adjusting government cost:benefit analysis of rail and road projects to consider the full range of economic, social and environmental benefits
• completion of the national priority programme to enhance freight interoperability across different networks. This includes current work to codify a small number of critical national standards and rules, such as mandatory standards for rolling stock approvals, and achieving alignment of train control and signalling technology along the eastern seaboard, and
• adoption of a national regulatory and governance model to harmonise operational standards, systems, processes and technologies, which has a dual focus on driving both productivity and safety.
“Increased use of rail freight could bring great economic and environmental benefits but a lack of reliable infrastructure, inadequate focus on productivity and inconsistent standards and regulations across the continent are preventing this,” says Mr Michael Caltabiano, CEO of Australia’s National Transport Research Organisation (NTRO).
Fostering better interoperability across Australia’s state boundaries will also need be accompanied by measures to make the inter-state freight network more reliable and more productive, as the industry points out.
“The pandemic illustrated the essential role of a strong national supply chain and the importance of rail as part of our national network, but more investment is urgently needed to increase the resilience and productivity of the network,” Harding says.
