Message from the ALC

Rail vision needs productivity focus

Australian Logistics Council CEO, Kirk Coningham, says governments need to address inconsistencies across jurisdictions to help rail become more effective and efficient.

THE MEETING OF COAG’S TRANSPORT and Infrastructure Council (TIC) that was held in early August had a significant focus on rail. Indeed, ministers in attendance heard directly from a range of leading industry bodies regarding constraints in the national rail environment, including freight rail. The views they heard expressed should not have come as a surprise.

The 2015 Draft Freight Rail Policy Objectives Discussion Paper published by the (then) Department of Infrastructure and Regional Development noted that “complying with multiple environmental regulatory regimes costs the Australian rail industry $29 million per annum, a third of which is estimated to be a direct or indirect result of unnecessary regulation.”

To overcome that, it was recommended that “where economic benefits exist, moving towards a single set of laws across jurisdictions governing environmental regulation, workplace health and safety, workers’ compensation, and drug and alcohol testing.”

In the four years that have since elapsed, there has been precious little movement on this front. Yet, the imperatives for action have only increased.

The National Freight and Supply Chain Strategy released on 2 August points out that Australia’s freight productivity and costs have stagnated over the past two decades. It is not unreasonable to conclude that a lack of regulatory reform is a significant contributor to this outcome.

It used to be that different rail gauges in different jurisdictions was offered as the primary problem facing the freight rail sector. However, the challenges faced today relate far more to operational and regulatory inconsistencies than they do to infrastructure.

Different requirements and rules enforced by different agencies impose significant administrative and cost burdens on rail operators.

To take one example, operators moving containerised freight from regional NSW to Port Botany via rail often deal with networks managed by three separate entities along the journey, each of which can impose different standards, and use different technology and reporting systems.

Of course, the challenge can be even more significant when the freight travels across a state border.

It has been argued by many within industry the problem is due, in part, to the fact that there is no national body with oversight of productivity in freight rail. The National Heavy Vehicle Regulator (NHVR) has a mandate to ensure there is a “safe, efficient and productive heavy vehicle industry serving the needs of Australia.”

In contrast, the Office of the National Rail Safety Regulator (ONRSR) has an exclusive safety focus, and is not required to consider or promote matters relating to efficiency and productivity in the rail network. We all recognise the fundamental importance of safety but strongly believe consideration of efficiency need not and should not dilute the safety imperative – indeed broadening the remit to include productivity should further enhance safety outcomes.

With the Productivity Commission currently undertaking a review of national transport regulators (including ONRSR) and the National Freight and Supply Chain Strategy showing why productivity in the freight rail sector must lift, now is the right time to ensure that productivity is placed at the heart of Australia’s approach to freight rail.

Australian Logistics Council CEO, Kirk Coningham.

BELOW: Australia’s freight productivity and costs have stagnated over the past two decades.

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