Road vs Rail, It’s Deja Vu All Over Again!

Perhaps I have been around trucking too long, but listening to a debate about the Inland Rail project, there was a lot of reference to a familiar topic, road vs rail, it’s deja vu all over again! How long do we have to listen to all of the bluster? It’s not either trucks or rail, it’s trucks and rail, it always was.

We don’t need to hark back to the fifties, when it really was trucks vs rail. The state-owned monopoly rail operators were fiercely protected by laws and licensing regimes which were designed to subsidise the state’s own operation and keep the upstart truckies in their box.

The situation could not last, fast economic growth and growing consumer demand could not be handled by state-owned companies which seemed to have developed inefficiency into a fine art. They had no place in a modern vibrant economy.

Trucking was the new industry, run by entrepreneurial rogues in the main, an industry which could change the way it worked at the drop of a hat, always flexible. The pioneers of the modern trucking industry were ‘can do’ types who delivered the goods and got paid for it, come what may.

The new kids on the block were the exact opposite to the staid, inefficient and inflexible rail industry. Bit by bit the ever developing trucking industry clawed more and more of the freight task away from rail, until a clear status quo was established around the seventies and eighties. 

If it was time sensitive in any way and the customer wanted door to door service it went on a truck and if it was millions of tonnes of product, agricultural or mineral, travelling long distances it went by rail.

This situation led to a turnaround, with state-owned enterprises losing money and becoming a drag on the economy, while the largely unregulated trucking industry was going gangbusters. The situation couldn’t last long, rail needed to learn how to be efficient and trucking needed to be regulated.

The results of this dichotomy is where we are now. The trucking industry is becoming safer, more regulated, responsible and becoming more socially responsible every year. At the same time rail has seen a transformation, as the separation of track owner and above-rail operator introduced real competition into the equation.

This is where we are at, rail operators are hamstrung by a feeling of over-regulation, which appears to be a hangover from the state-owned monopoly days, at the same time as the trucking industry is learning to deal with a chain of responsibility and the prospect of an effective accreditation regime.

This does mean it is a much more level playing field in the truck vs train debate. In most freight sectors there is a clear winner and no argument. When it comes to hauling large amounts of minerals from a long way inland to a port, rail is king. When it comes to distributing groceries to supermarkets, road is king.

The argument is about where these two extremes meet, there is a grey area of contestable freight where the calculation is one of distance versus flexibility. Distributing goods for major non-urgent food suppliers is one of those areas where the meeting point sits. Running a packet of biscuits from Melbourne to Sydney, it goes on a B-double, moving another packet of biscuits from Melbourne to Perth, it goes on a train.

In the discussions in Toowoomba about the Inland Rail this week, the contestability of some freight was in dispute and some easy-to-say-but-hard-to-prove figures were bandied about in support of the spending of billions of dollars on an Inland Rail which is long on marketing, but not quite so long on delivery.

One of the most telling comments in the debate came from one of the rail operators with a lot to gain from Inland Rail, Geoff Smith, CEO of SCT Logistics. His business is a major rail operator, but also runs a pretty big fleet of trucks.

He reckoned his team had done the sums and reckoned the Inland rail could give them a productivity boost of 25 per cent on the Melbourne-Brisbane route (they already run trains on this route, so they should know).

Geoff went on to point out that a lot of the freight on that route is being handled by B-doubles. He went on to say, if those B-doubles could be replaced by A-doubles, the productivity gain would be??? Yes, 25 per cent.

 

road vs rail, it’s deja vu all over again!