Freight continues as borders shut

With states closing their borders to interstate travel, those needing to continue to travel, including rail freight operators, into Western Australia and the Northern Territory are being asked to complete an arrival form.

The respective forms for WA and the NT can be found here and here.

From today, March 25, Queensland has also closed its borders. This has affected passenger rail services from NSW, which are now terminating at Casino, rather than continuing to Brisbane.

Due to the extensive connections between Queensland and New South Wales along the border at Tweed Heads/Coolangatta, local movements for shopping, work, medical appointments and travel home are not affected.

In addition, to limit the spread of the virus train and tram services in South East Queensland are only accepting pre-paid tickets to avoid the handling of cash.

While these measures have been put in place to ensure community safety, the Australian Logistics Council (ALC) has continued to press for freight services to be allowed to continue unaffected, due to their critical nature delivering food and supplies around Australia.

CEO of the ALC, Kirk Coningham, has said that he is happy with the measures put in place so far.

“It is pleasing that states and territories have all recognised the essential nature of the freight task by exempting freight and logistics from border closure arrangements,” he said.

“We now need states and territories to ensure that exemption is given practical effect, and make certain freight vehicles are not delayed for lengthy periods at border check points.”

Freight operators have been putting in place extra social distancing measures and cleaning measures to ensure that freight vehicle operators cannot spread COVID-19. With this in mind, delays at borders should be minimised, said Coningham.

“Those operating freight vehicles have rigorous restrictions around the number of hours they can work. Significant delays at border check points could end up producing delays of 24-hours or more in the movement of freight,” he said.

Qube

Rail stocks see rebound

While stock markets around the globe have seen a series of wild weeks with swings some of the largest they have been for a century, one area of safety is rail freight.

ASX-traded Aurizon (AZJ) received a significant bump in trading, up 3.85 per cent over the past five days of trading. The stock was reportedly selected by Swiss investment bank UBS as one of the best defensive stock bets in Australian markets.

“We like [gas pipeline owner] APA and AZJ as they are two income names with highly defensive dividends given their ‘take-or-pay’ structure,” a UBS analyst told financial markets site The Motley Fool.

Aurizon’s share price has been lifted by stock buybacks by the company, as well as targeted buying by insiders, including chairman Timothy Poole and non-executive director Michael Fraser, how both bought tens of thousands of dollars worth of Aurizon stock, according to finance watcher Simply Wall St.

Other rail stocks that have been weathering the financial storm during COVID-19 is logistics provider Qube. The company, listed on the Australian Stock Exchange (ASX) as QUB, grew by 3.76 per cent over the past five days.

Although rallies elsewhere in markets have been driven by speculation on the size of the US stimulus and it passing through the legislature there, the strong performance of Aurizon and Qube could be linked to their role in continuing to move freight despite shutdowns elsewhere in the economy,

Room for growth in trying times

While the COVID-19 pandemic is causing an undeniable impact upon the Australian economy, the rail industry is continuing to play its vital part in moving people and goods around Australia.

During these times, Rail Express will continue to deliver timely news and industry insights to our audience of rail professionals. Rail Express is the only publication dedicated to the rail industry that is publishing daily briefs as the story evolves. Our email newsletter database and online page views have been experiencing substantial growth over the past months, and we will endeavour to ensure that they continue to do so, even as disruption occurs.

Already, we have seen significant interest in how the rail industry will continue to be the lifeblood of Australia’s logistics supply chain. We have spoken with our key industry associations and partner organisations to understand that in fact, the demand for key rail services, particularly in the freight sector, is growing, with the resulting need for suppliers of equipment and services to continue to engage with the industry.

In addition, the growing government stimulus packages have a direct impact upon organisations working in the rail industry, many of whom are looking for the stimulus to go further so they can continue to meet the demand for mobility.

Finally, when the initial impacts of the virus subside, the rail industry will be continuing to grow as infrastructure spending is adopted by governments as a way to kickstart the economy.

More than ever, Rail Express is the resource that the Australasian rail industry turns to. The publication is continuing to grow in both print and online to meet the needs of the sector’s growth as a whole.

Industry seeks clarity on status of rail freight

The Australian rail sector is calling for a clear statement from governments that rail freight is an “essential service” and can continue to operate despite coronavirus (COVID-19) shutdowns.

“With state borders around the country closing, rail freight is more important than ever. It needs to be clear that essential services such as rail freight movements can continue during this time,” said CEO of the Australasian Railway Association (ARA), Caroline Wilkie.

The Australian Logistics Council (ALC) also reiterated the need for governments to take a definitive position on the status of rail freight.

“It would be helpful if governments at all levels reinforced this point in their communications and made it clear that freight operations will not be impeded by border closures,” said ALC CEO, Kirk Coningham.

The statement follows border closures in Queensland, Western Australia, South Australia, and the Northern Territory and shutdowns of “non-essential services” in NSW and Victoria.

In some cases, the demand for rail freight is increasing, as Matthew Roberts, rollingstock operations manager at CFCL Australia (CFCLA) highlighted.

“Our assets and maintenance workshops are running as normal ensuring the servicing, maintenance and continuation of rebuilds of rollingstock for rail operators and other rail freight shippers continues. The CFCLA leasing business is also working with customers to increase the supply of locomotives and wagons in service in some areas.”

However, as supermarkets, pharmacies, and other retail stores remain open, rail freight is required to keep supply chains moving.

“ALC’s conversations with governments and regulators at federal and state/territory level have been focussed on ensuring freight and logistics across all transport modes remain classified as an essential service. So far, that advice is being accepted, and as a result, our supply chains are continuing to function,” said Coningham.

To date, freight is yet to be told to reduce services.

“The COVID-19 situation is unlike anything we have faced, but rail freight is providing the backbone to our nation’s supply chain during these challenging times. Our members are keeping freight moving, ensuring that essential goods such as canned food, toilet paper and cleaning products continue to get to where they need to be,” said Wilkie.

Transport for NSW secretary, Rodd Staples, said that the agency will work to ensure freight continues in NSW.

“A key part of our role is ensuring goods and services are able to get to where they are needed most, including supermarkets. The team is continuing to work closely with the freight industry to ensure we don’t see any barriers emerge in critical supply chains, across roads, ports and rail.”

While curfews have been lifted for road freight to supply supermarkets and stores that have had to deal with panic buying, curfews still apply to rail freight movements. Additionally, as passenger demand drops, there is the potential for increased freight movements.

“We appreciate the need to keep critical passenger train services moving in our cities but if we see a reduction in passenger services on metropolitan networks, rail freight access should be increased to these networks to facilitate the transport of essential goods. This could include modifications to current curfews to increase frequency and availability of freight services,” said Wilkie.

Coningham also highlighted that the seamless movement of goods is critical at this time.

“Our supply chains cannot afford to have rail freight being delayed at check points for hours if we want to keep essential goods flowing. The health and welfare of Australian communities needs to be our priority – and in order to ensure it,  we have to keep food, clothing and medicines moving to the places they need to go.”

Rail freight operators are ensuring that they are able to provide a safe and reliable service to customers by increasing cleaning procedures.

“To mitigate the potential person to person contamination risk, workshop crews are being split into small teams and working hours are staggered with crews running two shifts instead of the normal day shift reducing person to person contact as far as possible. Cleaning of workshops has increased each day and between shifts and importantly cleaning locomotive cabs has been stepped up further as they pass through for servicing,” said Roberts.

“CFCLA is taking seriously the supply of goods and services necessary to the freight sector with the health and wellbeing of all Australians being paramount.”

Transport agencies respond to COVID-19 shutdown

On Sunday, March 22, NSW and Victoria announced shutdowns of non-essential services from midday, Monday, March 23.

While both states have continued to determine that public transport is an essential service, Victoria has introduced extra guidelines to keep passengers and rail workers safe from coronavirus (COVID-19).

The Victorian government has encouraged commuters to stagger the times that they need to use public transport. With the recommended distance of four square metres per person in indoor gatherings often difficult to achieve on public transport, even with reduced patronage numbers, travelling outside of peak times could be safer.

On top of measures announced last week, extra cleaning will be carried out on Victorian public transport, including trains and trams. Similarly, in Auckland personal hand sanitisers have been given to frontline staff, and new public hand sanitiser stands have been installed. Health advice has been displayed on services and in stations and stops.

Transport for NSW reiterated the advice it has given to passengers and staff to limit the spread of COVID-19.

Operators are encouraging passengers to use cashless payments, including the myki and AT HOP cards. Auckland Transport will not be accepting cash fares on buses from Monday, March 23.

Outside of the major cities, the Australian and New Zealand governments have prohibited non-essential travel. This has led to operators suspending some interstate and regional passenger services.

In Australia, The Overland, The Ghan, and the Indian Pacific have been cancelled until May 31 after Western Australia and the Northern Territory closed their borders to non essential travel. South Australia has also restricted border crossings. This closure does not apply to freight rail.

In New Zealand, KiwiRail has suspended three tourist trains, until further notice, said chief executive Greg Miller.

“Tomorrow’s TranzAlpine, Northern Explorer and Coastal Pacific trains have been cancelled and the services will remain suspended until further notice,” he said. The Capital Connection service will continue.

Miller said that safety of staff, customers, and communities was the priority.

V/Line has advised that passengers using regional services should reconsider if their journeys are essential. Café bar services on V/Line trains will not be available.

A Transport for NSW spokesperson said that regional and urban trains will continue as normal.

“We understand the important role public transport plays in the daily lives of our commuters, especially in the regions, and there is currently no plan to reduce services of trains or buses across our network.”

COVID-19 stimulus package: what it means for businesses in rail

The federal government has announced a $17.6 billion economic plan to keep Australian businesses in business, so what does this mean for the rail sector?

As the entire global economy faces significant challenges posed by the spread of the coronavirus, stimulus packages have been implemented across the nation to support small and medium sized businesses.

Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.

Caroline Wilkie, Australasian Railway Association (ARA) CEO said stimulus measures announced by the New Zealand, Australian commonwealth and state governments for small and medium enterprises, such as direct payments, asset write offs, apprentice wage subsidies, accelerated depreciation, and payroll tax exemptions will be of benefit to eligible businesses in the rail supply chain.

“However it is likely that additional government support will be necessary,” she said.

Similarly, Luke Wisbey manager – rail for civil engineering and plant hire company Brefni, noted that there is room for current stimulus measures to go further.

“The $17bn support package offered by the Federal Government is quite a significant sum and highlights the enormity of the situation facing business across all sectors including the rail industry,” said Wisbey.

“Although the package offered is substantial, the individual initiatives represent relatively small spends at a time when the economy faces mass bankruptcies. In order for businesses to survive the likely drops in revenue the crisis will generate, the government needs to be considering corporate level funding rather than ad hoc initiatives.”

Wilkie said passenger rail operators are reporting significant reductions in patronage and visible social distancing between customers on Australian and New Zealand rail networks.

At this stage, services have not been reduced. Other ARA members across the freight, contractor and supply chain are also reporting challenging conditions.

“ARA is uniting its members across all sectors of the industry to collectively address the COVID-19 situation and continues to work with our members to assess the industry impact and to engage with the government on areas where assistance can provide the most benefit,” Wilkie said.

What financial support is available?

The federal government will invest $6.7bn to boost tax-free cash flow for employers. The payment will provide cash flow support to businesses with a turnover of less than $50m that employ staff from the beginning of this year to June.

Up to $25,000 is available to help pay wages or for investment to protect against a downturn in activity.

Businesses with turnover less than $500m will be able to access a 15 month investment incentive by accelerating depreciation deductions. These businesses are also eligible for an expanded instant asset write-off for asset investments of up to $150,000. 

Similar to the relief provided following the bushfires, the Australian Taxation Office (ATO) will provide administrative relief for certain tax obligations on a case-by-case basis. 

If you’re a quarterly pay as you go (PAYG) instalments payer you can vary your PAYG instalments on your activity statement for the March 2020 quarter. Wisbey noted that thresholds here limit the amount of available assistance,

“The 50 per cent allowance on PAYG capped at $25,000 limits the target pool and those companies still need to pay net wages and super. For SME businesses, support with wages are of most concern. We support the wage assistance initiative for apprentices and trainees.”

What about investment in my business?

From March 12, businesses with a turnover of less than $500m will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.

A time-limited 15 month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions. 

How will my state support my business?

State governments across Australia have announced their own stimulus packages which includes state support for the waiver of payroll tax, fees and charges for businesses, and additional maintenance and cleaners of transport assets.  

In NSW, the state government has announced that more than $250m will be invested to employ additional cleaners of public infrastructure, including TfNSW’s external operators statewide. This is in addition to the $450m for the waiver of payroll tax for businesses with payrolls of up to $10m for three months and raising the threshold limit to $1m in 2020-21.

Thresholds here also exclude some businesses, highlighted Wisbey.

“The proposed NSW holiday on Payroll tax is good and should be extended until the end of the year at least. The threshold has also been lifted to $1m before it kicks in. However, this is an absolute tax on employment & the threshold should be north of $5m to be more effective.”

The Queensland government will create a new $500m loan facility, interest free for the first 12 months, to support businesses to keep Queenslanders in work and extend the coronavirus payroll tax deferral to all businesses across the state.

Western Australia’s state government stimulus package includes $114 million in measures to support Western Australian small and medium businesses.

Ben Wyatt, WA Treasurer said “the state government’s stimulus package works hand in glove with the commonwealth government, and ensures these additional measures complement the stimulus announced by the Prime Minister last week.”

Specific state and territory information and assistance for businesses can be found on the federal government’s website.

A message from the CEO to our partners

As Australia’s largest B2B publisher we have been looking at how we can best support our many industries through the changing COVID-19 situation.

We are committed to keeping our industries connected and supporting our clients and readers through this challenging time.

We recognise that meeting in person will be limited in the months ahead. Major conferences and events have been postponed for the next six months, including some of our own. Many companies are discouraging face-to-face meetings, and organising for team members to work from home.

With the potential for companies and individuals to become isolated we recognise communication within the industry has never been more important. Fortunately, through our media brands we are in a position to facilitate the necessary lines of communication that must be kept open between staff, suppliers, and clients.

We are in a strong position to support our industries through our media platforms: magazines, e-newsletters and websites. To that end, using print and digital platforms to communicate with the market has never been more important.

Prime Creative Media is committed to continuing our frequent communications. Our regular newsletters, web sites, and printed magazines will continue to be produced on schedule, with our entire team prepared to work remotely as needed. With so many other businesses moving to remote workplaces, we are now offering complimentary home address delivery of our publications to ensure continuity of service to our existing subscribers. Additionally we will offer three-month complimentary subscriptions to anyone else in the industry who would like a subscription to stay informed.

The economic challenges we face with COVID-19 are significant, but temporary. At Prime Creative Media we are taking a long-term view to our business, marketing, and investments, and it has been encouraging to hear this week from many clients who share our mindset.

We look forward to supporting our industries through our communication platforms in the coming months, so that our economy can push through this challenging time.

Please don’t hesitate to contact me directly to discuss your situation and how we can help.

Warm regards,

John Murphy
CEO
Prime Creative Media

Rail operators are ramping up hygiene to combat COVID-19 transmission

Major Australian rail operators are helping authorities minimise the spread of COVID-19 by seriously ramping up hygiene and cleaning protocols.

Current advice from the Australian Department of Health is that everyone in the community should go about their business as usual, unless they have travelled from a country or region with a high or moderate risk of COVID-19, or have had contact with a confirmed case of coronavirus. There is no need to take actions like limiting movement on public transport.

State government agencies including Transport for NSW (TfNSW), Queensland Rail, Victoria Department of Transport (DoT), Transport Canberra, South Australian Public Transport Authority (SAPTA), Western Australia Public Transport Authority (PTA) are advising rail operators around the nation to take extra precautions and maintain good hygiene practices for both employees and passengers.

On Tuesday, March 17 the NSW government announced that part of the $2.3 billion economic stimulus, $250 million will be invested to employ additional cleaners of public infrastructure, which includes TfNSW’s external operators statewide.

Cleaning squads have been deployed across NSW trains, light rail, and the metro, particularly in high-traffic areas including Central, Town Hall, and Wynard.

TfNSW is encouraging customers to use Opal and contactless payments where possible, to further reduce chances of community spread and safeguard staff.

Andrew Constance, NSW Minister for Transport said while staff have boosted maintenance and cleaning efforts on the network in response to COVID-19, customers need to take extra precautions too.

“For those services that do not offer contactless payment, we are advising all frontline staff to wash their hands and use hand sanitiser to limit the spread of viruses,” he said.

Jeroen Weimar, head of transport services Victoria said we’ve all got a part to play in responding to the significant challenge presented by COVID-19.

A Victorian DoT spokesperson said all operators on the state’s network have been asked to activate their increased cleaning protocols which will be rolled out in the coming days.

The increased cleaning measures mean all carriages on Metro Trains and V/Line trains will undergo nightly sanitation, and Melbourne’s trams will undergo a deep clean before each service.

A TransLink spokesperson said it  is working behind the scenes in preparation and have plans in place to respond to any recommendations from Queensland Health.

Gold Coast trams have already moved to daily sanitised cleans, and Queensland Rail will boost dedicated cleaning staff, ramping up regular cleaning measures and beginning a new disinfecting process on South East Queensland commuter trains from Tuesday, March 17.

Queensland Rail has stated in an update that it has strict maintenance and cleanliness standards for its trains and stations to ensure the comfort and safety of customers and employees. 

SAPTA has also increased cleaning schedules and extra crew are being used across all modes with particular focus being given to hard surfaces such as handrails, validators and push buttons. 

Stephan Knoll, SA Minister for Transport and Infrastructure said the safety of passengers and staff remains the highest priority. 

“We are taking these additional measures to help protect South Australians who deliver and rely on public transport to get to work or go about their daily lives,” said Knoll. 

Transport Canberra said there have been no changes made to public transport, and all governments are working together to ensure a national approach.

“We are implementing an increased cleaning regime on our light rail vehicles as well as at high-traffic areas such as stops and interchanges,” Transport Canberra stated.

Chris Steel, ACT Minister for Transport said the state government has engaged Robson Environmental to undertake a study to make any further recommendations on Transport Canberra’s cleaning practices.

Rita Saffioti, WA Transport Minister said along with other state transport agencies, Transperth trains have transitioned from getting a basic daily clean each night to a full daily sanitation.

“So far there is no evidence of community transmission in WA, and the increased cleaning regime is intended to reduce the risk – as much as practical – against potential exposure,” Saffioti said.

Across the Tasman in New Zealand, Auckland Transport have been quick to adopt similar health and safety initiatives to those that have been put in place by Australian transport operators.

Auckland Transport (AT) advised in a statement that the NZ Ministry of Health has made it clear that there are no issues with people using trains.

“While many Aucklanders are working from home during this time of uncertainty, those continuing to use public transport should use good hygiene practices,” Auckland Transport stated.

Phil Goff, Auckland Mayor, said AT is well-prepared for a possible escalation of its COVID-19 response and has taken steps including installing new public hand sanitiser stations and has increased the cleaning of vehicles and facilities.

Shane Ellison, Auckland Transport chief executive, said AT are making sure information and advice from the NZ Ministry of Health on preventive measures is being supplied to its staff, operators, and contractors.

AT have created a COVID-19 update section on its website, as have most rail operators and state transport departments in Australia, to inform staff and passengers with the latest information.

Rail the next step for economic stimulus: Committee for Sydney

The Committee for Sydney has prioritised infrastructure investment as essential to the viability of Sydney and Australia.

Responding to the federal government’s fiscal stimulus package to address the COVID-19 pandemic, CEO of the Committee for Sydney, Gabriel Metcalf wrote that infrastructure should be included in future rounds of stimulus. In particular, Metcalf highlighted the importance of rail projects.

“Medium-sized projects like More Trains, More Services in Sydney or the level crossings program in Melbourne, deliver huge benefits to commuters and to the economy. Even some larger projects could begin construction within 12-18 months if funding were allocated (most importantly, the initial tunnelling packages for Metro West),” wrote Metcalf.

While Metcalf argued that infrastructure spending had fallen out of favour as the time it took to see projects to completion has increased, the early stages of an infrastructure project are as valuable to the wider economy as other forms of stimulus.

“The planning work counts as stimulus too. The engineers, architects, and designers are also going to need jobs,” wrote Metcalf.

Other positives noted by the Committee for Sydney included the long-term benefit of infrastructure, beyond the immediate crisis, and the value of infrastructure investment as a signal to improve business confidence.

While many infrastructure projects were listed in the Infrastructure Australia Priority List, the Committee for Sydney noted that other rail projects are also in need of investment. These include, metro from Parramatta to Sydney Olympic Park, Kogarah, and Epping; expansion of Sydney Light Rail to Green Square; and fast rail from Sydney to Newcastle and Wollongong.

Mayor of Georges River Council Kevin Greene welcomed the comments from the Committee for Sydney, according to comments in the St George and Sutherland Shire Leader.

“Georges River Council warmly welcomes the support of this rail connection – it will completely transform the possibilities for Kogarah and fulfil the role envisaged for it in the GSC’s planning,” said Greene.