Harmonisation and productivity in land freight — barriers and solutions

1. Planning and Transport Research Centre www.patrec.org btrecolloquium 2007 Australian Transport – Policy challenges for Future Growth Harmonisation and productivity in land freight — barriers and solutions Trucks Trains and Tracks Prof Fred Affleck Executive Director, Planning & Transport Research Centre

2. Since the origins of organised transport networks in Australia, capacity and productivity have been hampered by disparate standards and fragmented systems. As harmonisation has gained momentum new systems have emerged requiring new reform agendas. PATREC

3. The causes of dysharmony have usually been accidental. The mistakes began in colonial history … they continue in our federal system. Fragmented infrastructure ownership has been a common thread … … reinforced by fragmented regulation … in the 21st century also by competition. PATREC

4. We are proficient at harmonisation through planned cooperative reform. Transport has better systems for reform than most other sectors. But we are not proficient in avoiding new ‘accidents’. New technology and new risks are the platform for new dysharmony. PATREC

5. Harmonising what? ‘Vehicle’ mass, dimensions & emissions … … prescriptive standards protect infrastructure assets, limit maintenance & external costs and limit risks of harm. ‘Track’ & ‘operating envelope’ design … … design standards limit cost of providing & maintaining infrastructure & limit risks of harm esp. to third parties. Control and communications systems … … technology, processes & rules constrain & facilitate movement to limit risks to users & third parties. Regulation of user behaviours … … standards & processes limit risks to users and third parties. PATREC

6. Some examples … past & present PATREC Rail operating rules Rail Safeworking Signalling Communications

8. Some examples … past & present PATREC Rail operating rules Rail Safeworking Signalling Communications Industrial awards Track gauge

10. Some examples … past & present PATREC Rail operating rules Rail Safeworking Signalling Communications Track gauge Outline gauge Axle mass

12. Some examples … past & present PATREC Rail operating rules Rail Safeworking Signalling Communications Track gauge Outline gauge Axle mass OHS regulations Safety accreditation Third party access Level crossing warrants Road rules Vehicle dimensions Axle mass Fatigue regulation OHS regulations Dangerous goods Uneven enforcement Noise emissions Exhaust emissions

14. Some examples … past & present PATREC Rail operating rules Rail Safeworking Signalling Communications Track gauge Outline gauge Axle mass OHS regulations Safety accreditation Third party access Level crossing warrants Road rules Vehicle dimensions Axle mass Fatigue regulation OHS regulations Dangerous goods Noise emissions Exhaust emissions Uneven enforcement

16. Where Dysharmony? At interfaces between … States Infrastructure owners (between owners & between modes) Regulators (across borders and between domains) Competing service providers … (and between adjacent supply chain service providers) PATREC

17. The costs of dysharmony? Costs are aggravated when networks cross boundaries Greater operating costs … … where multiple standards require duplicate assets, systems or processes Greater compliance & transaction costs … … where multiple jurisdictions / owners require duplicate regulatory compliance processes Opportunity costs … … where multiple compliance can delay or frustrate response to commercial opportunities, therefore lose revenue Reduced network capacity … … where network users are required to use assets conforming with lowest common standard PATREC

18. Why does harmonisation matter? Network capacity ... Network congestion is costly … reducing it by lifting network infrastructure capacity is costly. Forecast ‘twice the task’ will require surface transport networks to double freight carried. Economic efficiency … Resource consumption … Air quality and noise … PATREC

19. Tackling dysharmony We have a mixed record of reform to tune out dysharmony … Massive change was achieved in the 20th century … in road and rail … but change is always too slow … and we persist in creating new dysharmony PATREC

20. Challenges for the Future Sustain cooperative reform processes Be calculating and strategic Reap the benefits Implement and consolidate Think performance not prescription - Performance targets benefits - Prescription targets costs - Pricing links benefits to strategic choices PATREC

21. Strategies for the 21st Century Fewer infrastructure owners Performance-based regulation PATREC

23. Pics of why it matters

24. Strategies for the 21st Century Fewer infrastructure owners Performance-based regulation Pricing to promote productive use of scarce resources and push boundaries of productivity Reform is never over …. PATREC