AusRAIL, Market Sectors

Rail market share – need for more than words

<span class="" id="parent-fieldname-description"> VIEWPOINT: Ten years after ARTC took over the New South Wales track lease with the promise of a brave new world for intestate rail, traffic levels are still depressed and show little sign of growing, writes Mark Carter. </span> <p>Anecdotal evidence of late from knowledgeable observers of train movements on the North South freight corridor suggests that intermodal traffic volumes on the Melbourne, Sydney Brisbane route are not looking good, this coupled with a drop in East West volumes as a result in a slowdown in the mining construction boom out West.<br /><br />For a long time it has been hard to get an accurate figure of rail’s market share on the North South corridor. Over the years, various numbers have been bandied about, ranging from 10% for Melbourne to Sydney and 30-35% for Melbourne to Brisbane.<br /><br />The figures today are probably lower than this, certainly Melbourne to Sydney is in single digits, possibly as low as 5%, and between Sydney and Brisbane it is likely there is very little dedicated traffic these days other than that passing through on its way to and from Melbourne.<br /><br />It’s probably worth pointing out here, as I have done in the past, that the Melbourne to Sydney corridor is not quite the basket case the intercity market share suggests, as unlike Sydney to Brisbane there is a reasonable amount of intermediate and intrastate traffic.<br /><br />ARTC’s FY2013 Annual Report doesn’t give too much away, just reporting non-coal GTKs for the whole network which saw minimal growth in gross tonne kilometres of just over half a per cent between FY2012 and FY2013.&nbsp <br /><br />The big two, Aurizon and Pacific National, aren’t giving too much away either.<br /><br />For FY2014 Pacific National reported a 5.1% decrease in overall intermodal nett tonne kilometres and a 3.2% drop in TEUs, although attributes much of this decline to a 6.1% drop in intermodal volumes on the East West corridor <br /><br />While it says long haul North South volumes were weak, these were somewhat offset by short haul volumes on the same corridor, perhaps putting paid to the bureaucratic nonsense we so often hear about intermodal rail only being viable over distances of 1000km or greater. <br /><br />Unfortunately Aurizon lumps its general freight task, which can also include remote narrow gauge services in Queensland, in with its interstate intermodal figures for reporting. The company did note that its intermodal business grew by 17% in FY 2014 against the trend of flat market conditions overall, due to new contracts&nbsp commencing including Coles and Woolworths, though it doesn’t say how much of that was new traffic for rail and how much it poached from its main competitor.<br /><br />Aurizon only sees a modest increase in its bulk and intermodal freight volumes of around 4% in FY2015.<br /><br />So all this got me to thinking.<br /><br />With the takeover of the NSW track lease ten years ago by ARTC in 2004, much was made of the upcoming investment programme for the North South route and since then some $3bn has been sunk into the corridor.<br /><br />Reduced transit times, heavier axle loads, longer trains and greater reliability were all part of the plan and, the problems on the north-east corridor track in Victoria aside, much of what was promised has been delivered, although the transit times aren’t quite what was hoped for.<br /><br />Admittedly along the way we have had the general economic slowdown, both globally and domestically, that has not helped matters and deterioration in domestic economic conditions, is a recurring theme in both the Aurizon and Asciano (Pacific National) annual reports.<br /><br />But I also think back to that time ten years ago when the likes of David Marchant and Chris Corrigan would get up at industry conferences and spruik the benefits of rail and talk about one day the inevitability of a 60-70% market share on the North South corridor. <br /><br />It wasn’t just the huge infrastructure spend that was going to win it for rail, it was the ageing workforce profile for truck drivers, appropriate regulation and charging for the road transport industry and spiralling fuel costs that were also going to help create this brave new world.<br /><br />And yet here we are ten years on and the rail industry has failed to capitalise on any of this barely seems capable of treading water.<br /><br />One of my regular correspondents suggests, “Most of us know that rail freight has largely been left behind in the race to innovation, productivity, reliability and excellent customer service&hellip.” <br /><br />They go on, “We must revert to our ongoing argument about Inland Rail – only a new paradigm of productivity, cost and customer service that is so superior to what road can offer will significantly turn around the present gloomy situation on the East Coast.”&nbsp <br /><br />With this year’s AusRAIL theme of “Making Innovation Work” it would be nice to see the major players outline how they plan to be innovative about winning back more freight or rail?<br /><br />In its annual report Aurizon says it will work with key stakeholders within the supply chain to divert freight from road to rail. OK guys how? <br /><br />Ten years on, $3bn of taxpayers’ money spent, a stagnant industry and that’s the best you can come up with?<br /><br />I’m not singling Aurizon out here, the industry as a whole has failed take the baton and take advantage of what have been some of the best opportunities it has ever had for advancement.<br /><br />Innovation doesn’t necessarily mean having the most up to date technology, sometimes innovation can be as simple as better understanding your customers needs and responding to them – something that feedback from customers continues to show as often being completely lacking.<br /><br />Do we really have to wait another 10 years before we finally start to see something happening?</p>