Freight Rail

Shipping lines should incentivise use of rail

Freight rail track - stock - credit Shutterstock (8)

COMMENT: Major issues need to be resolved if importers and exporters are to put more containers on rail, Freight & Trade Alliance chief executive Paul Zalai writes.

In response to our ongoing advocacy on container detention reform, Freight & Trade Alliance (FTA) has received feedback from Sydney-based logistics providers who have recently paid tens of thousands of dollars in fees.

This was the direct result of delayed rail deliveries at Port Botany between August 2014 and March 2015.

Operational stakeholders have made a series of public statements pointing at each other as the cause of the problem.

The associated container detention issues are extremely complex and without complete transparency and a thorough understanding of the situation, I am not going to attempt to adjudicate who is to blame.

The bottom line, which nobody disputes, is that there are clearly major issues to be resolved.

We have highlighted the situation to port authorities and have received what seems to be a genuine commitment to facilitate solutions.

We are also involved in ongoing engagement with the ACCC and understand that the issue will be referred to in the next official Container Stevedoring Report.

While this provides a level of comfort that the regulators will examine the issues, it does little in the short to medium term to restore confidence in the use of rail.

This is where the shipping lines must step up by extending container detention periods for import containers leaving the port by rail – at least until the major operational issues have been rectified and a consistently reliable service is provided.

While this is by no means the complete solution, it would be a good starting point to improve rail uptake and fits in with formal submissions that the lines see rail as a vital part of the end-to-end supply chain.

Unless there are some commercial incentives, the import sector will avoid the use of rail which could leave the New South Wales’ intermodal terminals as “white elephants”.

Paul Zalai is an advocate for the Australian freight & trade sectors. This column originally appeared in our sister publication Lloyd’s List Australia.