To make the most of infrastructure investments, the playing field for rail freight needs to be evened out, writes Caroline Wilkie, CEO of the ARA.
The confirmation of funding for the Port of Melbourne direct rail line to South Dandenong in August was welcome news for business, industry, and residents in the region.
The direct rail connection to the port forms part of the wider Port Rail Shuttle Network and will make it easier and more cost effective for businesses to access port facilities.
The Federal and Victorian government funding will deliver tangible benefits to businesses in Dandenong’s manufacturing sector and improve the efficiency of port operations.
Ultimately, the project will also take 100,000 trucks off the road, helping give local residents their city back in the process.
In the same month, the NSW government fast tracked approvals for the Botany Rail Duplication and the Cabramatta Rail Loop, putting its support behind greater use of rail within its freight network.
The projects will not only deliver this critical new infrastructure to meet the state’s freight needs but will take 54 trucks off busy city roads with every additional freight train travelling on the Botany line.
That will make a crucial difference as the Port of Botany’s freight task increases by 77 per cent in the 20 years to 2036.
As Minister for Regional Transport and Roads Paul Toole observed when announcing the approvals, these new connections are so important because the more freight is moved on rail, the less congestion there is with fewer trucks on the roads.
These projects are great examples of the difference rail freight can make, and why continued investment is essential to the continued liveability of our cities and towns.
But while the benefits of projects like these are obvious, more needs to be done to ensure the rail sector can meet our increasing freight needs.
While Australia’s freight task is growing – and will continue to grow – the role rail freight plays in meeting this demand has actually declined.
Recent years have seen the rail industry’s share of the freight task eroded by policy settings that favour other modes of transport and frustrate investment in the sector.
As a result, less than one per cent of freight travelling between Sydney and Melbourne is moved by rail – a far cry from the 40 per cent share the rail network maintained in the 1970s.
While the vast expanses of the country have seen east- west connections hold up better, rail freight’s modal share has started to slip there too, with rail now carrying just 54 per cent of the freight task across the Nullarbor.
It is hard to reconcile the declining role of rail freight at a time where the sector needs more capacity than ever before.
Part of the problem is how we price rail freight when compared to road.
While getting trucks off the roads remains a focus in these busy and often congested urban areas, heavy vehicle road reform has simply not progressed.
So, while rail freight access charges are based on maintaining and operating the infrastructure it requires, the road freight industry is not expected to fully cover the cost of maintaining and operating the roads it uses.
As we hear more about the importance of easing congestion, the sustainability benefits of using more rail services and the value of creating city precincts that make it easier for residents to get around, favourable pricing models for road freight is increasingly difficult to reconcile.
We must have a level playing field for all to ensure rail freight can grow to support the increasing demand for freight across the country.
This, together with harmonisation of standards across the country, could enliven the rail freight sector again and ensure it is ready to support the growth of our economy over time.
After all, the industry has shown how much can be achieved under the right settings.
Australia was the first country to move to fully autonomous freight trains when the mining sector adopted the technology to service iron ore mines in the Pilbara.
This capability has become a hallmark of mining in the region and the significant benefits the industry delivers to the broader economy.
Use of rail for bulk commodities has increased, bucking the trend of the broader sector.
With a level playing field and certainty of standards across the country, there is no telling what additional benefits further innovation in the sector could deliver.
But first, we need to get the basics right so that rail freight can compete equally and fairly.
After all, we cannot allow new investment in rail infrastructure that busts road congestion in our cities to be eroded by a policy environment that only encourages business and industry back to the roads in the end.