A COMBINATION of bigger and more fuel-efficient trucks, under-investment in rail infrastructure and tax arrangements favouring road transport is seeing a decline in rail’s freight transport share, operators have told Australasia’s peak rail conference.
In a panel discussion on rail freight at AusRail Plus in Melbourne recently, Pacific National chief executive Brett Grehan said the approval of larger trucks and greater investment in roads had made road transport “become much more productive, massively more productive, based on $300 million of road investment over the last 10 years by governments”.
“Trucks are actually getting better,” Mr Grehan said.
Fellow panellist Geoff Smith, managing director of rail operator SCT, said larger trucks had eroded rail’s traditional advantage for moving containers over short hauls between ports and intermodal terminals.
“If we went back sort of seven or eight years ago, we sort of had a bit of an advantage in rail even with short line haul, based on the fact that if somebody wanted to provide a 30-tonne container, well … the road [option didn’t stack up],” Mr Smith said.
“Now what we see is that trucks will chuck two 30-tonne containers on and be able to move that [to road’s advantage].”
Mr Smith said there had been a 35% shift in competitiveness towards road transport, mainly because of bigger trucks and better fuel efficiency per tonne transported on trucks.
“So, rail [costs] will go up every year, let's say 3% across track access and all of our other charges,” Mr Smith said.
“We've actually seen that over the past 10 years, the road industry [costs] have dropped.”
The greater price competitiveness of road transport compared to rail was compounded by the federal government’s Safeguard Mechanism for reducing greenhouse emissions, Mr Grehan told the panel.
This was because only one road transport company was subject to its emissions-charging provisions.
“Our numbers are that there's a 75% reduction from our annual emissions for every pallet of freight that we put on rail versus road … it's definitely a key role to play, but from a Safeguard Mechanism perspective, it's nuts,” Mr Grehan said.
“So last year I paid $3 million in Safeguard [charges for emissions], and the two large rail operators pay that. There's only one truck company in the country that's on Safeguard, so all the truck industry which is emitting more is off it.”
Because of its application to only the largest transport operators the Safeguard Mechanism was “pushing freight from the lowest carbon mode to the highest carbon, which is just crazy”, Mr Grehan concluded.
“And so hopefully there'll be a chance we can get some changes to that.”
Despite the intense competition from road transport, Pacific National had recently invested $350 million in a new fleet of 50 locomotives, Mr Grehan told Ausrail Plus.
The new 94 class locomotives will be deployed to move highly efficient 1500 to 1800-metre container trains, mostly on the east-west corridor. The new fuel-efficient locomotives were designed and built in Australia by UGL in partnership with Wabtec Corporation.