Australia’s productivity and quality of life is heavily dependent on the efficient movement of freight.
Our freight task is already significant and expected to grow by 26 per cent between 2020 and 2050 – but rail is expected to account for just six per cent of this growth.
This limited growth, combined with historically declining non-bulk freight volumes, risks creating an inefficient, road-reliant freight network that constrains the productivity of our supply chains and limits the resilience of the national network. The Australasian Railway Association (ARA) is taking action to increase its advocacy in support of greater use of rail at this critical time for the freight sector.
Action needed to increase rail freight
The rail freight sector is facing the twin challenges of declining mode share in recent decades and limited opportunities for growth in the future.
In the 1970s, Australia’s busiest freight corridor between Melbourne and Sydney moved about 40 per cent of freight on rail. Today, rail’s mode share on the same route is just two per cent. Similarly, rail’s share of freight on the Sydney to Brisbane corridor is only three per cent.
The signs of growth looking ahead are limited too, with non-bulk rail freight on the north-south corridor projected to increase by 2.4 per cent per annum between 2020 to 2050. It is a similar story for the east-west corridor, with non-bulk rail freight likely to grow by around 2.2 per cent during this period.
Australia cannot afford for rail to be moving such small freight volumes on our busiest national corridors. Research into how customers choose their freight transport mode has confirmed logistic service providers value both reliability and timeliness above all else.
Unfortunately, rail freight struggles to be competitive on these key performance measures due to a lack of interoperability, fragmentation of operating environments, and a limited focus from governments on improving rail freight productivity.
The benefits of change
The potential for rail to play a more substantial role in moving this freight is significant, as are the benefits to the community.
Rail freight produces 16 times less carbon pollution than road freight per tonne/kilometre travelled. Just a one per cent mode shift away from road to rail would result in a reduction in emissions nationally of 330,150 tonnes of CO2 equivalent. This would help decarbonise Australia’s transport sector and make progress towards achieving the government’s legislated emissions reduction target of 43 per cent by 2030.
Accident costs are also 20 times higher on road compared to rail for every tonne/kilometre of freight moved. A one per cent shift away from road to rail would reduce accident costs nationally by $28.6 million per year. This same one per cent mode shift away from road would also result in a reduction in health costs caused by PM10 [particulate matter with a diameter of 10 micrometres or less] emissions nationally by $20.5 million annually.
As governments continue to grapple with maintaining an increasing infrastructure asset base, we must also consider the role rail can play in reducing this burden.
A heavy vehicle can do up to 20,000 times more damage to a road than a passenger car. With a $3.4 billion road repair backlog just for local government roads in New South Wales, the cost of our national freight system reliance on bigger, heavier trucks is considerable. More trucks on roads can increase congestion in already heavily congested urban areas. This ultimately impacts national productivity and stretches the already limited resources to maintain critical road infrastructure.
The benefits of greater use of rail therefore extend far beyond the efficiency gains of a more resilient national freight network, with the potential to make a tangible difference for the communities the industry serves.
A critical part of our future
Achieving a significant mode shift of freight onto rail is a critical and pressing priority – not only to reduce the adverse impacts on our roads but to unlock the significant productivity benefits that rail freight can deliver. Without practical and timely action, the viability of rail freight between Australia’s major capital cities on the east coast will continue to deteriorate.
It is important that we prioritise immediate and practical reforms in collaboration with governments, industry and customers to level the playing field for rail. This includes increasing critical rail infrastructure investment, enabling productivity, and minimising the regulatory burden on rail.
While continued progress and investment in the Inland Rail project will be essential as a catalyst for mode shift, this is not the only investment required. The industry needs significantly more funding for existing rail infrastructure assets to enable greater efficiency, or in some cases, simply deliver normal operating conditions.
This investment must be focused on building improved resilience and above all, increase reliability and productivity.
Advocating for more freight on rail
The ARA is consequently stepping up its campaign to get more freight on rail. This campaign is multifaceted and includes working with the re-elected Federal Government, state governments and the National Transport Commission to harness the ambition of the National Rail Action Plan and accelerate tangible benefits of reform.
Continuing to invest in ways to raise the profile of freight on rail and demonstrate its benefits is also critical. While the industry is acutely aware of the importance of moving freight on rail, we need to ensure policy makers understand the impact of planning and investment decisions that affect rail freight’s competitiveness and productivity.
We are not only concentrating on raising the profile of rail freight at a federal level; there are also opportunities for stronger engagement with governments in New South Wales, Victoria and Queensland.
The ARA will be leveraging the opportunity presented by the New South Wales Government’s recent release of the report Delivering freight policy reform to actively advocate for incentives and actions to encourage mode shift to rail. We will also be ensuring that rail freight is front and centre of the Queensland Government’s consideration as it develops its refreshed freight policy in the coming months.
We will also use our upcoming National Rail Freight Statement as a key advocacy tool to succinctly outline the key issues impacting intermodal and import and export (IMEX) rail freight. This statement includes recommendations for all governments to drive productivity in the sector and achieve mode shift in the short to medium term.
Our advocacy will be underpinned by a comprehensive evidence base, including two significant new research reports, the Future of Rail 2025 and the Value of Rail 2025, to be released later this year.
Importantly, the ARA has also commissioned new research to examine the true extent and impact of the differences in access and regulatory imposts for non-bulk freight moving on rail and road. This project will also draw upon the seminal Future of Freight report (2023).
The ARA’s advocacy on this issue aligns strongly with the intent of infrastructure and transport ministers across the country to pursue reforms that achieve nationwide safety and productivity benefits. While the reforms through the National Rail Action Plan have laid the groundwork for progress, it is now time to prioritise the implementation of tangible and practical improvements to the operating environment for rail freight to facilitate more reliable, efficient and productive operations.
The ARA is committed to working with governments and industry to advocate for practical and meaningful reforms that allow rail freight to reach its true potential. The rail freight sector stands to play a significantly greater role in boosting our national economic productivity and we are determined to make that happen.
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