Improving rail’s share of freight task starts with policy settings: ALC

CEO of the ALC Kirk Coningham writes that significant efficiencies can be found without massive spending.

Among the many disruptions wrought by the COVID-19 pandemic was the need to defer the 2020-21 Commonwealth budget, which will now be handed down some five months later than originally scheduled.

As always, ALC made a submission to the federal government ahead of the originally planned date. This was well before the full effects of the pandemic reached Australian shores and our industry faced the challenge of keeping essential supplies moving, despite unprecedented restrictions on movement and the effect of state and territory border closures.

All of us – governments, industry and the wider community – have learned lessons as a result of the COVID-19 experience. Perhaps more than ever before, communities now understand the very real and immediate impact that supply chain disruption can have on their daily life.

As consumers witnessed empty supermarket shelves as a result of unprecedented demand caused by the COVID-19 pandemic, there is a clear need to ensure that logistics operators are given the flexibility to they need to meet increased and changing demand.

This is equally true right across the supply chain – from deliveries into supermarket loading docks through to the movement of freight trains across state borders.

Perhaps the single most effective government action taken during the pandemic to address supply chain disruption did not involve massive expenditure, but simply the removal of operational curfews through non- legislative ministerial action.

Industry has called for the removal of such operational restrictions over many years. With many of them suspended for the duration of the pandemic, both government and the community have been able to see the benefits.

As the Prime Minister himself noted in June this year: “Trucks were allowed to resupply along roads and during hours where they were previously banned. And the sun came up the next day. It was extraordinary.”

This goes to the heart of the key point ALC has made to the federal government ahead of this year’s Budget.

With the pandemic having placed the nation’s finances in a challenging position, this is the time to focus on regulatory reform that may not cost big money – but can nevertheless have a profound impact on supply chain efficiency.

The need for such regulatory reform was a key focus of ALC’s pre-budget submission in January – and the urgency of that task has been underscored in the supplementary submission provided to the federal government in August.

In the rail space, this includes supporting the development of a National Rail Plan that will finally establish a single set of consistent national laws to regulate the movement of freight by rail in Australia that address environmental regulation, workplace health and safety, workers’ compensation and drug and alcohol testing.

The COVID-19 pandemic and its associated border closures have put a spotlight on the disruption that can be caused by inconsistent regulatory approaches between jurisdictions. The upcoming federal budget is the place to start work that will finally make the changes needed to overcome such disruptions.

Heavy vehicle charges to rise less than half recommended rate

Transport and infrastructure ministers will raise heavy vehicle charges just 5 per cent over the next three years, less than half the estimated amount needed to cover trucking’s share of road construction and maintenance costs.

Road access charges for heavy vehicles, which have been effectively frozen since 2014, are viewed by the rail sector as an unfair competitive advantage for trucking operators on key freight routes.

Despite the National Transport Commission recently estimating the heavy vehicle sector will cause 11.4 per cent more expenditure on new roads and road maintenance over the next three years, a meeting of Australia’s federal, state and territory transport and infrastructure ministers in Melbourne last week resolved to increase access charges by less than half that figure.

“In reaching its position Council was very mindful of the challenges faced by transport industry operators,” the Transport and Infrastructure Council’s post-meeting communique said.

Under the meeting’s proposal, road access charges for heavy vehicle operators will increase by 2.5 per cent in FY21 and 2.5 per cent in FY22.

“Council noted the charge increases would be significantly less than the amount of 11.4 per cent estimated by the NTC as necessary to recover the heavy vehicle share of recent road construction and maintenance costs.”

The ministers said they “considered” the expert advice of the NTC on road user charges, which are “designed to recover the heavy vehicle share of road expenditure,” but chose instead to favour a significantly lower increase, “having sought the views of industry representatives earlier in the day”.

This news comes after the CEO of Australia’s largest freight rail operator, Dean Dalla Valle, implored the ministers to level the playing field by lowering rail access charges.

“The guts of the issue is that relative to rail freight access prices, the trucking sector enjoys a ‘rails run’ in terms of user charges,” Dalla Valle said prior to the TIC meeting. “The result – in the last decade, on major transport corridors like Melbourne-Sydney and Sydney-Brisbane, large volumes of freight have shifted to bigger and heavier articulated trucks.

“Rail access charges need to be reduced so operators like Pacific National have the opportunity to compete on a level playing field with road freight.”

Vow to support rail

The transport and infrastructure ministers did discuss rail at their meeting, agreeing to address skills and workforce issues, and a harmonisation of standards, through a National Rail Action Plan.

“Recognising the rapid expansion in public investment in the delivery of rail infrastructure all across the country, Council agreed to a National Rail Action Plan covering skills and workforce issues and harmonisation of standards.

“The Plan focuses on actions to meet the rail sector’s critical skills and labour needs and to identify opportunities to improve the efficiency and safety of Australia’s rail system by continuing to align or harmonise operating rules, infrastructure and operational standards and systems across the nation’s rail network,” the communique said.

TIC said the Action Plan will be made available on its website.