Time to share the love

But first I think we need to go back a few years.

A number of people have commented on my absence from this year’s AusRAIL 2011 held in Brisbane, which for a number of reasons I was unable to attend. To be honest, having been to all but of handful of AusRAIL’s since 1997, my enthusiasm has waned a little and I find it easy to become cynical regarding many of the industry’s pronouncements at these events.

It was pointed out to me just a few days ago that my cynicism is somewhat misguided and that indeed I had missed out on an excellent event this year. In my defence, in preparing this column, my mind kept drifting back to the AusRAIL 2008 conference that was held in Melbourne.

I seem to recall, then Queensland Rail CEO, Lance Hockridge, and former Pacific National head, Don Telford, both got up on stage to tell us all that the time for infighting between rail operators was over, that we had done some terrible things to each other in the past, and now was the time to move forward as one united industry.       

So three years on, have we found love, are things any better and why has rail’s interstate market share remained, at very best, static?

A key indicator would be the performance of the North South interstate corridor linking Melbourne, Sydney and Brisbane which has benefited from a couple of billion dollars of federal government largesse in recent years.

Figures seem to vary with alarming irregularity, but at the time the upgrade of this corridor commenced in late 2006, it would be safe to assume that rail’s Melbourne to Sydney market share was around 10% and that Melbourne to Brisbane was around 35%.Yet, even with completion of most of the upgrading work and some transit time reductions already in place the consensus seems to be that these figures are even lower now.    

There are obviously a number of reasons for this. To the casual observer, the two biggest players, Pacific National and QR National seem to be more focused on their burgeoning and highly profitable coal haulage businesses and somewhat indifferent to their more marginal intermodal operations.

When they do take note of their intermodal business, it seems to be to pinch whatever they can from their competitor. As one industry insider recently remarked to me, “They are both still too busy looking over their shoulders trying to see what the other one is doing. They seem unable to grasp that while there will always be a degree of competition between themselves, for now the main competitor still remains the road transport industry.”

There also still seems to be a lack of understanding of what the customer wants. While there are exceptions, by and large the industry continues with a rather myopic focus on intermodal moves for general freight, when in reality there are large volumes of freight for which containerisation is just not suitable.

Ironically innovation was one of this year’s AusRAIL themes, but there seems to be a distinct lack of it when it comes to actually carrying freight.

This doesn’t mean the customer is always right or that the industry should bend over backwards to accommodate every whim or fancy that they bring to the table. Much has been made of Woolworth’s anticipated move to rail for some of its consignments on the North South corridor, but it is believed they have not been knocked over in a rush from train operators. As is characteristic of Woolies, it is understood that any start-up rail operator on the corridor would be struggling to make a quid from this traffic given the initial volumes on offer.  

Maybe it is not all doom and gloom. While the intercapital market share between Melbourne and Sydney is cause for concern, the figure is not quite as bad as it seems with a considerable amount of intrastate traffic including containers, grain, limestone and coal at either end of the corridor not factored into these market share figures.

And with niche operators, such as QUBE, acquiring new locomotives and rolling stock and continuing to progress plans for its intermodal facilities at Minto and Moorebank, there is at least some faith in a future for rail on this corridor even if it is not yet shared by all within the industry.

Again going back to the around the time of AusRAIL 2008, there were suggestions that within a decade rail would be seeing a Melbourne Brisbane market share anywhere between 50% and 70%. Was this just wishful thinking or is now the time to sit down together and work out how we are going to achieve that goal?