Aurizon boss Lance Hockridge has publicly denounced the state of the Australian freight sector in a speech to some of the nation’s most powerful business and political players.
Hockridge spoke on Thursday at the AFR National Infrastructure Summit, produced by the Fairfax paper and Rail Express parent company Informa Australia.
The Aurizon chief executive told the delegation Australians were “unaware” that a number of the country’s key freight systems, “are just not up to scratch due to neglect, regulatory overload and short-termism”.
He said consumer giants like Apple, Amazon and Procter & Gamble were successful because of their great supply chains, which are the result of those companies putting “the needs of the customer first”.
“They provide reliability and quality,” he said, “not just the lowest cost.
“The supply chains of countries are no different,” Hockridge argued, “and should be judged by the same criteria.”
He said that while rail infrastructure for Australia’s mining sector was almost unparalleled, mining sectors were “facing strong headwinds”.
As for the other rail infrastructure, he continued: “Our grain supply chain is seriously inefficient due to ageing assets and a lack of alignment among participants.
“And our intermodal capability, the supply chain that keeps Australia functioning on a daily basis, is under severe strain, especially on the eastern seaboard.”
The freight boss urged decision makers to prioritise getting Australia’s freight rail up to par with the country’s global competition.
“As members of the freight sector, we’re in the global supply chain business,” he said. “Australia is in fierce competition with the supply chains of other countries and they are not standing still.”
He also pointed out a national benefit to freight infrastructure investment.
“It’s clear that our issues are intrinsically connected – the health of our cities, the lifestyles and economic wealth that Australians have come to enjoy – with the daily grind of the nation’s freight network. There’s a lot of serious work to be done and some issues of which we’ve dragged our feet for decades.”
Hockridge did say there were some flashes of optimism in recent times, however.
He praised last month’s Infrastructure Australia Audit, which he said “provided a welcome boost to the infrastructure debate,” and he said the recent Federal Budget’s preservation of an asset recycling scheme was “worthy”.
Last week’s Moorebank Intermodal Terminal confirmation was also a welcome sight for the freight industry, he added.
But he said these things were not enough.
He said a goal should be set for 30% of freight on the Eastern Seaboard to be carried by rail by 2025 (it’s currently around 15%).
He also called for a national freight strategy to be developed by the Commonwealth and the states.
He said a road pricing scheme for heavy freight was needed to put road and rail on par with one another.
And while approving of the idea, he guided the government to be careful when privatising the national rail network, “because privatisation alone is not the panacea for present ills,” he said.
“In a country of relative prosperity and unlimited potential, we often don’t want to hear the truth,” Hockridge concluded.
“Australia’s enduring success has bred complacency in many quarters – the ‘she’ll be right, mate’ attitude.
“Our roads, railways, ports and pipelines should be enablers of Australian competitive advantage and social amenity. But despite pockets of excellence our freight transport infrastructure is seriously underdone.”
Flemington police are investigating today after a 15-year-old girl was allegedly assaulted and racially abused by a stranger on a train at Lidcome station on Monday.
The teenager was sitting on a train while it was stopped at Lidcombe at around 2pm on Monday, June 8, when she was allegedly assaulted by a 30-40-year-old woman, Police said early Tuesday morning.
“About 2pm, a 15-year-old girl and her two friends boarded a train at Blacktown Railway Station. They entered the carriage and sat down,” the Police report said.
“The train stopped at Parramatta and a man and women boarded, sitting down in the seat in front of the three girls.
“The woman turned around to the girls and verbally abused the 15-year-old, claiming they had said something racist.
“A verbal altercation then started between the woman and the 15-year-old girl, with the woman racially abusing the teen.
“Police have been told the woman got out of her seat and grabbed at the 15-year-old girl, pulling her hair and punching her several times in the face.”
The man and women then reportedly got off the train at Lidcombe and the young girl and her friends reported the matter to Police.
The woman has been described as Caucasian with tanned skin and aged in her late 30’s or early 40’s, she had a black front tooth and missing teeth, and was wearing a blue shiny top and black pants, according to Police
The man has been described as Mediterranean/Middle Eastern in appearance with an olive complexion, slim to medium build and had a tattoo on the left side of his neck that looked like a smiley face.
He was wearing a red and cream coloured T-shirt with a black jacket and dark blue or black jeans, the report said.
Roughly 1700 of Aurizon’s staff could soon be under a new long term enterprise agreement (EA), after unions and the rail operator reached an in-principle agreement on Thursday.
Aurizon is engaged in a protracted bargaining saga with several unions over the replacement of 12 expired EAs. Together, the expired deals covered around 3500 staff, including 1700 train crew and operations staff, and 1800 construction and maintenance workers.
A new EA has been agreed to, in principle, covering train and operations staff.
The proposed Train Crew and Transport Operators EA includes a 4% pay increase each year for three years, in return for “significant productivity enhancements and enhanced work flexibility including modern rostering practices,” Aurizon said on Thursday.
The EA also includes the removal of the ‘no forced redundancy’ provision.
Also under the deal, rail passes will be removed for the majority of employees. Passes held by employees with more than 25 years of service will be valid for long distance travel until 2018.
Aurizon announced the in-principle deal in a short statement.
“The in-principle agreement is not yet binding on the parties and is subject to more detailed documentation, a formal ballot of employees and approval of the Fair Work Commission,” the company said.
“Subject to final drafting, it is intended that the new Train Crew and Transport Operators EA will be distributed to employees by the end of June, with employee briefings and a formal ballot to be held during July.
“Pending a positive vote, the new Train Crew and Transport Operators agreement would then be lodged with the Fair Work Commission, seeking implementation in August.”
Aurizon also hopes to reach a deal covering the remaining 1800 employees, the Construction and Maintenance EA.
While expired EAs typically remain in place until they are renewed, Aurizon secured permission from the Fair Work Commission in April to cancel expired EAs.
Shortly after an appeal of that decision by the unions was heard in the Federal Court, Aurizon boss Lance Hockridge announced that the company had chosen to exercise that right, and cancelled the old EAs.
This means the 3500 workers formerly covered by those EAs have only been covered by the Rail Industry Award (2010), the National Employment Standards, and individual contracts, since May 21.
Wednesday, June 3, was International Level Crossing Awareness Day (ILCAD), and the TrackSAFE Foundation was joined by Brookfield in recognising it.
TrackSAFE general manager Naomi Frauenfelder said that with incidents at level crossings still a regular occurrence in Australia, the theme for the ILCAD this year was ‘Take your time, don’t risk your life!’.
“Level crossing incidents are avoidable if people simply take their time and obey the warning signs and signals in place for their own safety,” Freauenfelder said.
“Every near hit and collision on the rail network causes severe and lasting trauma for train drivers and other rail employees involved.”
She said ILCAD was “an impressive initiative that brings global attention to level crossing safety”.
Frauenfelder noted that safety at level crossings remains one of the industry’s highest safety priorities, and praised the Victorian’ government’s plans to remove 50 of the most dangerous crossings from the state’s network over the next 8 years.
But she said there was still a need for more public knowledge of level crossing safety.
“It’s important that along with these infrastructure improvements, also come behavioural improvements which can only be achieved through education and awareness which is what campaigns like ILCAD set out to achieve.”
WA rail manager Brookfield also recognised the international event, with safety manager Adam Sidebottom noting there are about 70 incidents at level crossings on WA’s 5,500km freight network each year.
“On our train network, a train can weigh more than 14,000 tonnes and may be travelling at up to 90km per hour,” he said, “which means that cannot just stop quickly.
“In most cases, level crossing incidents can be easily avoided by people being vigilant in regards to their safety,” he said.
Member for Cootamundra Katrina Hodgkinson thinks the mothballed Cowra Lines should receive government funding so they can be re-opened.
Hodgkinson, according to a report from the ABC, believes the Cowra Lines – which were progressively closed between 2007 and 2009 due to safety concerns and low freight volumes – should receive a share of the government’s planned Rebuilding NSW funding.
The state government plans to invest $20 billion into infrastructure through the plan, which was announced in June 2014.
So far the state plans to reserve $7 billion for the Sydney Rapid Transit project, to fully fund a second harbour rail crossing.
$1.1 billion is to be set aside for WestConnex and the Western Harbour Tunnel, and $2 billion is designated for schools and hospitals. Around $4.1 billion has been earmarked for regional transport.
“If it’s going to cost $40 million to get those rail lines up and running again … for that funding to come out of that Rebuilding account,” Hodgkinson was quoted by the ABC, “I think that’s a perfectly reasonable request.
“I think that the door is not closed.”
NSW minister for roads, maritime and freight Duncan Gay said in May that a government search had yielded no private sector tenderer who would renew the Cowra Lines on the government’s desired terms.
“The tender process revealed there was too much uncertainty in the ability of the tenderers to return the lines to full service and run a commercially sustainable business without significant taxpayer support,” Gay said.
But Hodgkinson thinks the Lines are worthy of such support.
“I know [Minister Gay] is still very interested in the Cowra Lines and I think it’s time for the state government to contribute something towards that,” the Cootamundra MP said.
Indeed, Gay said in May the government had not given up on the Cowra Lines, and actually suggested at the time that funding from Rebuilding NSW would be considered for the project down the road.
“As part of our Rebuilding NSW Plan, the Government has committed $400 million to the Fixing Country Rail program,” Gay said, “while $153 million will be invested over the next three years to continue fast tracking repairs and upgrades to the 996km of grain lines across NSW.”
The Cowra Lines are 200km of non-operational rail lines between Blayney and Harden, and Koorawatha and Greenethorpe.
Transport for NSW has estimated the renewal of the lines would cost roughly $30 million, and then $2 million would be needed each year to keep them in a serviceable condition.
COMMENT: Last week’s release of the Infrastructure Australia (IA) Audit saw “congestion” and “traffic chaos” splashed across the front pages of the nation’s newspapers. This was a good thing.
Traffic congestion resonates with readers, it gets us talking about the daily grind on our roads and how it robs us of precious hours – in the workplace, at home with family or at the footy or netball field. IA’s publishing of individual road and corridor statistics was smart. The numbers were shocking too: congestion could be costing Australia north of $50 billion a year in lost productivity by the 2031.
There were calls for tolls and new user charges because the existing funding model isn’t working and governments, with constrained budgets, just can’t be expected to stump up more and more. What follows will be a lively debate because road user charges and other more aggressive measures such as congestion taxes have been a very hard sell in Australia. We take comfort in our “free” roads and rarely demand transparency on how they are funded and maintained by taxpayer money.
Infrastructure Australia, under its remit from the Federal Government, is now working on a 15 year infrastructure plan to be presented by late 2015. A period on consultation will happen with stakeholders and the community. The final result will be a recommended pipeline of projects to promote long-term productivity: the right projects, for the right reasons, and delivered at the right time.
Major players in the Australian freight industry are very interested in the substance of the IA Audit (and key findings such as those listed below), and how policy reform and new models of funding and risk sharing might play out between government and the private sector.
The current level of public sector expenditure – especially in the transport sector, which remains largely funded by government rather than user charges – may be unsustainable in the face of increasing budget pressures to fund welfare and health services. (Finding 27)
Current arrangements for the funding of land transport represent the most significant opportunity for public policy reform in Australia’s infrastructure sectors. (F 28)
As well as being the largest infrastructure sector, transport is also the most challenging, with relatively high projected growth in demand, a low proportion of user-based funding and market-based pricing mechanisms, challenges with project selection processes … (F62)
The message is clear: more and more public spending is not always the panacea, nor is the building of more and more roads by government. In reality we’ve got to pull a range of levers. In freight transport, we must look more to policy reform and the private sector for funding, and insist that rigorous, independent cost-benefit analysis be the basis for all public infrastructure investment.
Take for example, our general freight corridors on the eastern seaboard, the heavily trafficked and populated strip stretching from Melbourne to Brisbane. The freight carried interstate on these corridors accounts for about 60% of Australia’s total interstate freight flows. Here rail, usually the heavy-lifter for long-distance freight in modern market-based economies, remains seriously underweight. Between Melbourne, Sydney and Brisbane, trucks account for about 90% of all freight transported – rail’s share has been in constant decline over the past 40 years.
The rail freight industry has worked to reduce transit times and improve reliability. But where rail freight operators pay a direct user charge to access infrastructure, truck operators primarily pay for road use through fuel excise. The combination of low increases in excise and improved fuel technology means heavy vehicle operators are paying less in real terms for the access they are getting to improved infrastructure that delivers them a commercial benefit. It is the opposite of the way it works in other sectors including rail.
Although it is not the only reason for a major imbalance, this difference in pricing is an important factor. As a result, we are not realising the productivity and social benefits that freight rail could deliver were it to be given a genuine opportunity to play to its main strengths, including long-haul interstate freight and port-shuttle services where rail offers substantial productivity and social benefits. I’m not diminishing the role of the heavy vehicle sector, but this imbalance inevitably means more traffic congestion and accidents, a bigger carbon footprint and more intensive use of fuel.
Compare this to the North American rail freight sector, revitalised in the last three decades through sustained reform, deregulation and private investment. It’s estimated that freight rates in real terms have fallen 30-40%; modal share has climbed to 35%, and almost $500 billion re-invested by the private sector. The North Americans are considered the world’s most efficient and competitive railroads, to the benefit of industry, consumers and the economy.
While not pretending we have the scale of North American economies, there’s opportunities for reform and investment in the Australian freight sector.
Incentivise more private sector investment in freight infrastructure in commercially-oriented projects that share risk between government and the private sector. A good example is the proposed Moorebank Intermodal Terminal, west of Sydney, where the Commonwealth is working with Qube / Aurizon to create a nationally-significant and largely privately-funded freight asset that will be open access and multi-user.
Be targeted, strategic and ‘play the long-game’ in freight infrastructure investment to deliver productivity and economic benefit. This includes existing “brownfield” infrastructure that merits investment to lift efficiency, remove bottlenecks or build capacity.
Implement road pricing for heavy vehicles where direct user charges genuinely reflect the cost of infrastructure, its maintenance and expansion, and ultimately, drive the best investment decisions. Distance-based charging for heavy vehicles has been used in New Zealand since the 1987.
Plan and secure suitable freight corridors, as part of urban planning, and ensure provision of efficient road, rail and port interfaces. The Federal Government’s seed funding and securing of corridors for the Inland Rail project is a good illustration.
Further develop the rail modal share targets that some state governments have identified, and back these up with substantial policy changes that will enable them to be met. For example, New South Wales has set a target to double the proportion of freight carried on rail on key freight corridors by 2020. Such an approach is consistent with policy initiatives in the Europe and the United States.
I look forward to an increasingly robust debate about Australia’s future infrastructure requirements, and particularly how we identify, fund and execute on most productive, long-run reform and investment opportunities. This is critical to improving Australia’s international competitiveness.
Lance Hockridge is the managing director and chief executive officer of Aurizon. He was appointed in 2010.
How does positive train control – safety technology that could have prevented May’s deadly Amtrak derailment – work, and why is it still not on US rails? Purdue University’s Jeffrey C Peters looks for answers.
Questions about how the train derailed, why the train was traveling more than twice the posted speed limit and how this could have been prevented surfaced immediately.
Engineers typically have control over train speed, but the engineer of this particular Amtrak train currently reports having no recollection of the crash. Until the National Transportation Safety Board (NTSB) investigation is complete, we can only speculate on the root cause. However, we can discuss how this could have been prevented.
The promise of positive train control
Positive train control (PTC), a safety technology for rail transportation, may have been able to prevent this accident, and it is not the first time this sentiment has been echoed. In 2008, a similar accident prompted federal action.
Within a month, the Railroad Safety Improvement Act of 2008 (RSIA08) became law and mandated that PTC must be implemented on about 60,000 miles of track “providing regularly scheduled intercity or commuter passenger transportation” by the end of 2015. The abnormally fast response can be attributed to support from Senator Barbara Boxer of California, who was the Chairman of the Senate Committee on Environment and Public Works at the time.
Unfortunately, the recent Amtrak accident came before the end of 2015 deadline, and this section of the Northeast Corridor did not have operable PTC. Further, it is highly improbable that the 2015 deadline will even be fully met.
While implementation of PTC is moving forward in some places, system-wide implementation continues to face significant barriers due to high costs, interoperability requirements and communication spectrum availability.
What is positive train control?
PTC from a functional perspective is a system designed to prevent train-to-train collisions, over-speed derailments, incursions into established work zone limits and the movement of a train through a switch left in the wrong position.
The technical aspects of these systems can vary, but they generally include a positioning system on each train and information on rules for sections of track, such as speed restrictions. There also has to be a way of communicating these data throughout the network. For example, PTC would override manual control if it sensed that the train was entering a section of track at double the posted speed limit.
The Federal Railroad Administration (FRA) estimated that between 1987 and 1997, an annual average of seven fatalities, 55 injuries, 150 evacuations and over USD$20 million in property damage could have been prevented by PTC. To put this in the context of the entire transportation network, there were 33,782 fatalities on the road network in 2012.
Although PTC is on NTSB’s “Most Wanted List” and many serious incidents due to human error could be prevented, the monetized safety benefits are significantly less than the costs. The FRA estimates the annual monetary value of the safety benefits from PTC to be about $90 million. The safety benefits may be slightly larger today, considering several serious accidents stemming from a boom in oil shipped via rail.
The law is an unfunded mandate, which means the costs of meeting the requirements are borne by the railroad operators. The FRA estimates that the total capital cost for full PTC deployment according to law would be about $10 billion (about one year’s worth of capital investments for the major US railroads) and annual maintenance costs of $850 million. While this investment might be feasible for major US freight rail companies, local and state governments with tight budgets will have a much more difficult time allocating funds for PTC.
The FRA established an annual $50 million grant program to help support the development of PTC, but the grant has been funded by Congress for only $3 million – well short of the total required cost of $2.75 billion estimated by the American Public Transportation Association.
Some argue that PTC could be used to optimize business operations with benefits up to $4 billion annually; however, this remains largely speculative.
Regardless of the federal mandate and possible future benefits, the costs of implementing PTC remain a significant barrier.
The systems integration barriers
In addition to costs, PTC has faced barriers in technical implementation, namely system interoperability and allocation of communication spectrum.
Interoperability is key in successful implementation of PTC. In the case of the Northeast Corridor, where the most recent accident occurred, Amtrak operates on both Amtrak-owned track and track owned by regional transit authorities and vice versa. Elsewhere, Amtrak operates on track owned by freight railroads. It is necessary to ensure that the systems developed by the freight railroads, Amtrak and regional authorities all communicate with one another. While interoperable systems have been developed, some issues persist.
Another system integration issue is the acquisition of radio spectrum to support the communication demands of PTC. The Federal Communications Commission (FCC) generally holds auctions for spectrum, but allocates some for emergency services and government agencies.
However, the FCC so far has not addressed the needs of PTC. A consortium of railroad companies exists to purchase appropriate spectrum, but the amount of spectrum and the frequency are still uncertain – especially in highly congested areas in major cities, where choices in spectrum may be scarce. Without guidance from the FCC, obtaining spectrum and ensuring its interoperability is time-consuming and costly.
It remains to be seen whether Congress will take immediate action following the Amtrak accident as it did with the 2008 accident in California.
House speaker John Boehner recently said it was “stupid” to claim that the slow rollout of PTC, which may have prevented the accident, is a problem with funding. He may be right that no federal money was cut for rail safety programs, but he also failed to mention that no money was given to help meet the unfunded mandate. Either way, it does not seem likely that local and state governments will receive much help in meeting the unfunded mandate.
Furthermore, a bill was introduced in the Senate this March to extend the PTC deadline to 2020 to help accommodate the cost, interoperability and spectrum barriers the railroads are facing. Perhaps then, the timing of this accident will lead to the failure of the bill and cement the 2015 deadline regardless of the financial and technical barriers.
The National Transport Commission (NTC) on Friday launched a program to boost Australia’s freight efficiency by delivering what it says will be quicker and cheaper road, rail and intermodal networks.
The program is aimed to introduce:
reporting on systems, tools and decisions that have already been shown to increase productivity in different states, territory or local government areas;
options to increase load volumes to be safely carried by high-productivity trucks; and,
investigations into performance-based standards to highlight design innovation.
NTC acting chief executive Michelle Hendy said the commission has worked with its stakeholders to identify reform areas.
“A growing economy needs more productive transport networks and these projects will help us find new ways of getting goods to market more efficiently,” she said.
The new work program was approved by Australia’s transport ministers last week.
Hendy said the NTC would continue to focus on technology to keep improving the operation of Australia’s transport networks.
“The effective use of new and emerging technology provides Australia with an opportunity to grow our economy, increase productivity, improve safety and reduce regulatory burden,” she said.
“The NTC helps to resolve issues so Australia can take full advantage of the benefits of new technology.
“For example, the use of increasingly autonomous vehicles provides great opportunities for better productivity and safety for both road and transport and rail transport alike.”
A technology sub-program is part of the work program, and will include assessing the potential regulatory and operational barriers for using transport technology for safety, commercial and regulatory purposes.
It will also facilitate the release and sharing of electronic information for areas including the location of rail level crossings.
The NTC is an independent statutory body that develops regulatory and operational reform of road, rail and intermodal transport.
This article originally appeared in Rail Express sister publication, Lloyd’s List Australia.