Much of the freight carried in and out of Melbourne and throughout Victoria generally was once carried by rail. Most freight traffic today is transported by road, despite the fact that rail is more efficient from an energy perspective and generates significantly fewer greenhouse emissions per tonne km. Estimated reductions vary considerably but according to some researchers can be up to 16 times less than road freight per Tkm travelled (VAGO Effectiveness of rail freight support programs, tabled 27 June 2023).
The attached submission Rail Futures Institute Submission to Review of the National Freight and Supply Chain Strategy by Rail Futures Institute (RFI) to review the national rail and supply chain strategy provides a number of recommendations to address this challenge. Whilst recommendations proposed in the RFI submission do not include a financial analysis/business case it is likely that the return on investment for projects in this submission would be high and implemented relatively quickly and provide a quick return on investment. On this basis investment risk based on a business as usual scenario is likely to be low.
The question that must be asked is whether these measures will be sufficient on their own to arrest the continuing decline of freight on rail, a trend that started many decades ago – not only in Victoria but throughout much of the world and continues today.
Freight is a service industry where service needs such as convenience, reliability, marketing and other customer service issues as well as cost are critical. Whilst much of the infrastructure required to support rail freight has been severely neglected, ie poorly maintained and in urgent need of upgrading or renewal, there are many factors which have contributed to the decline in rail freight.
Institutional and political factors are also important. The current system has given road freight favoured treatment by government for many years putting rail freight at a significant disadvantage. This is reflected in rules, regulations and operating practices, procedures, standards and so on. These must be reviewed and redesigned or replaced in a way that promotes rail as the favoured freight carrier.
The system also includes subsidies and economic concessions, many of which are described as “externalities”, costs which road freight avoids paying or contributes very little but must pay to enable rail to compete on an equal footing. These include
- impact on road safety and trauma
- cost of roads and other supporting infrastructure including road maintenance
- air/noise/water pollution and health/amenity impacts
- nature and landscape impacts
- upstream and downstream impacts
- traffic congestion.
All of these issues must be addressed if rail freight potential is to be achieved but the problems are systemic, so resolving them requires a systems based approach in which there will be no simple single fix solutions.
It is argued this requires a review of the freight industry as a system, unpack it and identify levers that can be used to change the system in a way that increases rail’s modal share. There are many leavers that can be used for this purpose with varying degrees of effectiveness. It is argued the most powerful of these is the mindset or paradigm out of which the system is designed and operates. From this come system goals, information flows, feedback loops, stocks, flows and everything else that drives the system.
The starting point must therefore be a change in government mindset, a mindset that must mandate rail freight as top priority and a key element in its emission reduction program supported by goals, power structure, culture, rules (incentives, punishments, constraints), information flow, feedback loops, subsidies, taxes, standards and so on. This must be reflected in government policies and requires a freight plan with implementation strategies to make it happen.
Fortunately there are indications the government mindset may be changing. The latest State government announcement 10th Oct 2023 of “A record-breaking trial run for the longest intermodal freight train will pave the way for regular, more efficient services between Merbein and the Port of Melbourne” Quoting Minister for Ports and Freight Melissa Horne “We’re laying the groundwork now for this and other services to grow as part of our long-term strategy and commitment to move more freight by rail and reduce the number of trucks on roads.’’
This is a promising start but is only the beginning and far more fundamental and far-reaching changes are required. There is also growing pressure for all modes of travel and transport, including rail to rapidly reduce greenhouse emissions. This reinforces the need for a freight plan for the industry as a whole for the immediate, short and longer term. It must also be a plan that anticipates a rapidly changing world and future scenarios that have been discussed in an earlier blog and must be planned for.