The Australasian Railway Association (ARA) took its freight reform agenda to Canberra in September, hosting an event with senior industry leaders and parliamentarians to discuss the crucial role rail has to play in driving our freight future.
The event came at a critical juncture for the freight sector, with the Federal Government’s current productivity reform agenda providing a once-in-a-generation opportunity for meaningful changes that will benefit Australia for years to come.
The ARA was pleased to see bipartisan recognition of the value of rail freight at the event – but there is a need for urgent action to ensure greater use of rail as part of a more productive and efficient freight sector.
We outlined our key recommendations to the Federal Government’s transport sector productivity roundtable, making the case for change.
A key part of the supply chain
Australia’s rail freight industry is critical to our national economy, creating more than 22,400 jobs and generating $6.3 billion for the economy. It is a cornerstone of Australia’s transport infrastructure network and a significant enabler of economic productivity.
Rail freight produces 16 times less carbon pollution per tonne kilometre than road freight and is up to nine times safer.
But the very clear benefits rail has to offer have not been enough to shift the dial on declining modal share on Australia’s east coast. Today, only two per cent of freight on the Sydney to Melbourne route is moved by rail. On the Brisbane to Sydney route, that figure is just three per cent.
As our freight task rises over the coming decades, road freight is expected to take on the lion’s share of the growth. This does not just represent a risk for the rail freight sector, but to the productivity and efficiency of the entire national freight network.
With the freight sector growing, we need all modes of transport to rise to meet that growth. We will absolutely need more road freight to meet increased demand, but an over-reliance on road alone will stretch capacity and lead to more congestion in our cities and on our highways.
Greater use of rail is therefore an essential part of freight’s future. That means maintaining the status quo is not an option, and it is time for urgent reform.
A national focus
The fragmented nature of the freight sector – with different requirements between jurisdictions – has been a significant drain on the rail freight sector’s productivity. National leadership and focus will be essential to delivering rail freight policy and regulatory reforms.
We were pleased to see the Infrastructure and Transport Ministers Meeting (ITMM) recognise improving rail interoperability as a national priority. This represents a valuable opportunity to address some of the inconsistencies the freight sector faces and start to move to a truly national focus.
As part of that, the decision in August to deliver nationally consistent digital train control and signalling systems across the national network for interoperability represented a powerful step forward to improve rail’s competitiveness. It will end decades of inconsistency, create seamless connectivity and boost the sector’s productivity and efficiency.
But that is just the first step.
A national focus is needed to lead a long-term strategy to guide investment and deliver insights to improve productivity.
A clear investment pipeline
The national rail freight sector has experienced significant underinvestment for decades. Continued investment across the network is needed to support improved outcomes.
There is no question that Inland Rail will deliver significant benefits to the national freight network.
The project will cut travel times and provide seamless connectivity from Melbourne to Brisbane. Each 1.8-kilometre-long train will be capable of carrying the equivalent of up to 110 B-double trucks.
But as significant as that investment is, there is still a need to invest in the wider national network.
A clear pipeline that provides visibility for the industry and directs investment to improve performance, resilience and reliability is needed for the future.
A long-term national rail infrastructure investment plan, with a focus on the national network for interoperability and connecting freight corridors, would provide both freight operators and their customers the certainty they need to grow.
Enabling mode shift
The transport sector is on track to become the country’s biggest source of emissions by 2030 if no action is taken. Moving more freight on rail can help deliver real emissions reductions today, using existing technologies, but this change cannot happen on its own.
The ARA has recommended the government consider measures to incentivise freight customers to shift to rail to reduce emissions, while also supporting the industry’s own transition to low and zero emissions technologies.
Greater use of rail provides a clear opportunity to drive down emissions in the transport sector, using the technology of today.
A level playing field
The ARA is also conducting research to investigate how policy settings and resource allocation distort competition between domestic transport providers.
The research is exploring the constraints and costs that influence the performance and competitiveness of each mode, with the view to creating a level playing field for all.
We need the right policy levers in place to ensure we can make the most of all transport modes as the freight task grows. Getting the balance right will help customers make choices based on the full value proposition of each mode, and help us achieve a more efficient and productive freight network.
Rail will drive our freight future
While September’s event highlighted the challenges the rail freight sector must overcome, it also showcased the drive among industry and government stakeholders to create change and support a more productive future for the freight sector as a whole.
The challenges facing the sector are complex, but there are clear pathways forward.
The ARA looks forward to continuing to make the case for rail freight reform as part of the nation’s productivity agenda.
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