“All governments recognise the importance and benefits of rail to Australia,” said Danny Broad, CEO of the Australasian Railway Association (ARA), as he opened the ARA’s annual event – AusRAIL PLUS 2017 – in Brisbane.
“Investment in rail made in the national interest will enhance rail’s contribution to the economy through greater efficiency in both public transport and supply chain networks – all Australians will be the beneficiaries,” he said.
With forecast investment in new rolling stock – or rail vehicles – and rail infrastructure climbing towards $100 billion over the next 15 years, and Inland Rail and a national rail industry program securing $20 million in funding in the FY17 Federal Budget, “rail certainly is the place to be,” he noted.
“An important era lies ahead of us – it is a pivotal time, and the implementation of the national rail industry plan is essential.”
Seeing the value
The ARA commissioned consultancy firm Deloitte to produce a report looking at future strains on passenger and freight rail networks, rail safety and rail’s benefits over road and environmental considerations for modal choices. Mr. Broad released the report, Value of Rail, at the event, noting that it highlights the significant role the rail industry will play in enabling Australia to cope with future challenges.
“Australia’s population is increasing at a rate of 370,000 people per year,” he said. “By 2060, both Sydney and Melbourne populations will have grown by approximately three million people.
“Freight is likely to grow with gross domestic product (GDP) rather than the population growth – with a potential 88 per cent increase in kilometres travelled by 2050, and an increase in vehicle stocks of about 2.5 million trucks and light commercial vehicles.
“To manage these challenges, Australia will have to develop its multimodal transport systems, with light rail and heavy rail at its spine.”
The report found that Australia’s population will double by 2075, reaching almost 45 million people. It notes that rail currently makes a contribution of approximately $26 billion to the Australian economy each year, while offering lower emissions and safety and congestion benefits compared to other transport modes.
“Significant investments are being made into Australia’s rail infrastructure. In some sense, these investments are making up for a prolonged period of underinvestment,” the report continued.
Dealing with disruption
Change was a central topic at the conference – in particular, uncertainty about the pace and extent of change to work, technology and population and how it affects rail.
As Craig Rispin, Business Futurist and Technology Guru at The Future Trends Group, explained, the ability to obtain and analyse data will be key in the years ahead.
“Data is the new oil, and artificial intelligence is the new oil,” he said – since the ability to collect data means nothing without the ability to analyse it.
By 2028, he shared, the world will be far removed from the one we live in today. Half of all jobs will have been replaced by machinery, the majority of cars will be driverless, six in 10 people will be living in cities. The significance, he said, is businesses cannot expect to continue to keep working the same way while the world changes around them.
He pointed to the rise of the start-up culture as one risk to established companies, with organisations such as Airbnb and Uber enabling individuals to do what entire companies used to do. While competing with new, lean rail start-ups, the industry will also have to remain mindful of advances in emission-reduction technology in trucks, allowing them to travel from Melbourne to Sydney in one charge, recharge and head back again. “Be part of the future, or try to avoid the inevitable,” Mr. Rispin said.
For ports to handle the onslaught of freight, they will need to increase their reliance on rail, shared Jonathan Lafforgue, General Manager – Operations and Environment at NSW Ports.
“The 2016–2017 ACCC Stevedore Monitoring Report came out [in 2017] stating that Port Botany is now Australia’s largest container stevedoring port,” Mr. Lafforgue said.
“While we welcome that news, we’re more excited about the potential capacity we’ve still got in our port to grow – right now, we’re handling a little under 2.5 million TEU (20-foot equivalent units) per annum. The port itself has the capacity to grow to 7.5 – 8 million TEU – meaning we have enough key lines, berths and land behind that to facilitate that volume of freight.”
He noted that the only way NSW Ports will be able to put that much freight across the key lines of ships is by getting 40 per cent of containers on rail.
“Right now, we’re proud of the fact that it’s about 20 per cent – but we need to double that to reach that next-level capacity.”
The majority of Port Botany’s freight is regional rail at present, and 80 per cent is delivered within a 40-kilometre radius of the port.
“To get to that next step, we’ll need to start targeting the import freight, rather than the export freight – and to do that, we’ll need the intermodals,” Mr. Lafforgue said.
According to Priscilla Radice, Principal and Australasian Business Leader at professional consultancy Arup, the privatisation of Australia’s ports has had an unexpected effect on the conversation around freight in the country.
“With the privatisation of the ports, I don’t think anyone predicted how strong a voice [ports would] have,” Ms. Radice said, adding that their input in creating a strong supply chain is key, since ports are mode agnostic.
Now, privatised ports are contributing to the conversation.
Ms. Radice noted that oppositional conversation about freight is unhelpful, especially in the government space.
“Having worked alongside governments, looking at light rail, passenger rail, road and inner-city shaping policies, I see that the oppositional speak of freight – road versus rail, freight versus commuter – I don’t think [it] helps,” she said. “Governments are shifting more and more towards city shaping, understanding their current ecosystem – they need the freight industry to provide a coordinated ‘one’ voice that is very clear […] so the supply chain does not happen in isolation.”
Ms. Radice advocated a holistic and united approach to infrastructure planning, noting that rail freight will always have to jostle for its slice of the pie after passenger rail.
“NSW Ports, your target of 40 per cent freight on rail is potentially in direct conflict with the densification of population along freight lines,” she said.
“Look at what the freight piece is in the wider context for cities – you’ll never beat the commuter push. Governments need to know that the population is going to double. Getting smarter around all the technology freight will be what that looks like in terms of its infrastructure. You can’t continue to be oppositional.”
The rail freight industry has been handed an opportunity to prove itself viable as an alternative to road transport, though the track ahead will not be free of challenges. Key in the coming years will be industry development focused on remaining competitive, whether that be through the development of intermodal freight terminals, sophisticated route planning and tracking technology, autonomous capabilities or otherwise. With the nation’s rail experts already strategising for the various unknowns, the rail industry could be on the right track.