Today we will explore the subjects of change and transition.   In respect of adapting or building new rail infrastructure, the potential room-to-manoeuvre and constraints on local rail freight are more plainly seen after reviewing a past business cycle.
 
The structural changes to the movement of goods that come about in a particular era usually prove to have been necessary for commerce’s survival in those times.  Outside of a return to a protectionist era, there is no choice but to improve our logistical efficiency.  So the question is, will the infrastructure and the business regulatory environments keep up with essential needs?
 
Through to the mid 20th century, the primary form of long distance delivery of goods into Australian cities and towns for small businesses and consumers was achieved through the rail parcels office.  In the inner city, the onward deliveries, or pick ups, from the rail parcels office were often made using trolleys.
 
Why is this important today?   Because, in the e-commerce age, the idea of needing to make delivery by trolleys, due to voluminous & multiple party parcel delivery loads, is already becoming a reality.   This is also being driven by the inability of drivers to operate efficiently while continuously needing to re-park within short distances in the emerging city and inner urban environments:
 
www.citylab.com/transportation/2017/04/cities-seek-deliverance-from-the-e-commerce-boom/523671/
 
Hence, the idea of mother-ships or parcels offices re-entering into the city and inner urban environs, those same that may offload to trolley operators, is likely not far from reality.  
 
We have obviously digressed from our subject of inland rail, but we did so for a reason.  We want to talk about market transitions and infrastructure corridors, and the above provides a foundation.
 

In the distant past, rail parcel offices in the city served much more contained delivery/pick up territories than is in evidence in inner cities today.  Labour costs for messengers/delivery staff were also much lower then, so messengers moved over greater distances with individual deliveries.  In those days too, there were also dedicated rail freight lines and better possibility for pathway sharing to feed the rail parcels offices than there is today.  Hence, unless someone comes up with a form of modular feeder transport that can interact with the urban rail/metro system, yesterday’s infrastructure concept of a big parcels office near whatever central railway station will not serve us well.
 
The city-based logistical evolutionary process interests us.  But the general subject we can employ to best effect in our case is found in local rail freight, and we will be using both Australian and overseas references in pursuing this theme.
 
As discussed much earlier, Australia’s major coastal cities are also our port hubs.  Where possible, however, the port terminals have been moved away from the city.  In Sydney the dedicated rail freight pathways to those city port terminals were forsaken.  In general, much heavy industry has moved out of the inner city, much production has been offshored, and some has moved to the periphery of the cities, yet only a little has moved to the inland regions. 
 
Your first thoughts may be of the great changes above, but if you look at it from the eyes of people and industries in Australia’s inland regions, not much has changed at all.   The dominance of the freight moving into and out of the same port cities remains, because as the cities de-industrialised, an equal or greater flow of imports flowed into the city periphery distribution centres.  The propensity of importers to employ a single national DC was also to mean that originating trends were not much different to manufacturers that had once sought to centralise production.
 
So there we have it, situation normal in Australia for rail connections, flow direction, and proportionate volumes running out of our metropolises mainly to other metropolises. 

In respect of near-metro local rail flowing to the major metro rail yards, some of the dedicated rail freight lines that are being built to bypass the urban networks in our cities may have some potential to bring in some freight from additional production or DC sites at the city peripheries.  However, the new dedicated lines are mainly conceived as bypasses and there is no strong growth prospect for local freight moving by rail across city-based railways in the metro environments around Australia as things stand.  Real estate prices & urban planner’s designs upon industrial land mitigate against alternate prognoses.  The major ports, however,  are seeking to increase their use of intermodal terminals at the periphery of the cities they coexist with; if possible employing dedicated lines to reach these locations with shuttles.  Hence, the major city-based rail yards are marshaling and creating train manifests in the same way they have for generations, but with long-since reduced local inbound rail feeding them wagons for classification.
 
Some of our Australian national rail infrastructure stakeholders, as evidenced in the 2015 report previously cited, have a fascination with things American.  We can, however, state that in respect of local freight, things generally don’t play out the way we have described it above in the USA.  The ports are relatively fewer, and they have larger hinterlands.  Inland demographics and production are also far more evenly spread.   Local rail freight usage, that which feeds rail yards, is strong across the country.  Some of this traffic is borne in traditional carloads that are far reduced here.  Moreover, carloads are intermingled with intermodal, tanks, and even bulk upon occasion.  These same rail yards also tranship freight through their classification yards from inbound long haul services from domestic rail yards together with intermodal freight from ports.  There is also the feed from regional intermodal terminals/rail ramps.
 
The US is a different operating environment when viewed from the Australian city-eyed perspective, but that same statement need not be so in the inland regions.   We do not have the corridor congestion issues that might afflict local or regional freight feed in much of our inland regional environment.  In fact, this problem is mainly confined to the narrow corridors and congestion approaching the ports/cities.  

In many ways, given the proposed north-south inland corridor, we will have far fewer impacting issues than those afflicting the Los Angeles-Chicago intermodal express services cited in the 2015 Melbourne-Brisbane Inland Rail report transit time as a benchmark.  For instance, the Americans have known for decades that they have severe corridor separation / bypass issues in Chicago, yet they have not been able to marshal the resources for the project to fix it.   We have at least in part addressed such issues in Sydney and Melbourne.
 
We have again come along way today to make a very simple point in respect of the inland rail operating environment.  While generating substantial rail freight volumes by employing local rail freight may not be achievable through a city/port based classification yard in this country, it is not necessarily the case in the inland regions.   Moreover, the ability, at a limited number of strategic locations, to tranship tank, intermodal, and bulk freight through new or vastly improved rail classification yards on the proposed north-south inland rail corridor is probably both feasible and potentially game changing for Australian inland industry's prospects.

We are going to talk about transport markets today, principally covering the bi-directional Melbourne-Brisbane trucking market.  The improved inland rail infrastructure is said to target that market for conversion to rail.  To achieve this, the rail based product must be superior to the full truckload and less-than truckload products.  We apologise in advance for being fulsome.

Rail based products should be optimised for economy and on-time performance (inclusive of terminals).  Given the proposed investment levels in this project these goals should be within reach.  The secondary consideration should be the targeting of a large proportion of the express trucking industry whose door-to-door transit times, in the real world, are within feasible bounds.

These subjects, upon examination, prove to have been poorly researched in the ARTC 2010 Melbourne-Brisbane Rail Alignment Study that we introduced last time.  The subsequently recommended freight transit times, and line operating structure, suffered from many consequently errant assumptions.

Since 2010, we have had another report in 2015 which acknowledged general deficiencies in the 2010 report while listing very few.  They adopted both the 2010 proposed alignment and all the main operating details.

https://infrastructure.gov.au/rail/inland/files/Inland-Rail-Implementation-Group-Report_0915.pdf

The centrality of our case remains, that the running of different train sets at very different speeds, on a largely single line track north of Illabo, is only worthwhile if there is a extraordinarily differentiable product being brought to the transport market by the faster running train.  Otherwise, when running trains at great speed differentials, the built-in poorer on-time performance levels for all rail market participants, and the necessarily higher operating costs above track, are not offset by increased revenue potential.  The essential matter revealed is that it is the slower-running bulk freight whose speeds must be optimised to improve average speed running across the line.

Hence, despite being underwhelmed by yet another executive summary dressed up as a study in the 2015 report cited above, we did note the following comment:

The maximum speed for high speed intermodal trains in North America is 112.6 km/h, however, average speeds are significantly less.

For example, Burlington Northern Santa Fe’s Atchison, Topeka and Santa Fe Railway line (Los Angeles–Chicago) has a maximum operating speed of 106 km/h but average speed for its ‘expedited’ service is only 58 km/h.

This compares to the design speed for Inland Rail of 115 km/h on lighter axles and 80 km/h on heavier axles and an average speed (northbound intermodal) of 72 km/h for the 24 hour reference train.

However, no other reference appeared in the 2015 report in relation to the operating circumstances that brought that US result into play.  Generally, there is no comment either in respect of whether legacy rail operations in the US are, or should in fact be, an aspirational reference for this substantially new alignment initiative.

In any case, we found that the new “less than 24hr” line haul transit delivery objective for the Melbourne-Brisbane corridor supplanted the 20.5 hours of 2010.

With all the shenanigans it is easy to be distracted from the core constituency in the road freight market whose cargo must be won for rail.  At the beginning of this series we spoke of the Australian trucking industry having evolved on the basis of going long & hard on sectors when creating the express trucking industry service standards.   The express trucking industry standard (for LTL / less-than-truckload shipper tendered cargo) quickly became based upon a transit scenario where carrier drive-time commenced each evening, plus a transit time allowance for pick up and delivery (including terminal sort/load process).

In respect of the 2010 report the following comment appeared, which our experience says is true:

Availability
Availability refers to services available with departure and arrive times that are convenient for customers, which relates to the cut off time that is imposed by transit time. Most customers want departures during the day or early evening.

Further in the 2010 report there was industry advice that late night train departures would not find significant support.  Although unstated, the likely reason is that express carriers seek to contain their terminal & local transport hours within existing shifts for essential operating cost control.  While coastal rail’s cut-off in Melbourne may be midnight, the express operator would wish for an earlier line haul departure time.

We believe at Gilead that a market can only be understood when viewed with a wider context, and we will seek to introduce one again today.  From the last quarter of the 20th century the heaviest volume express trucking city pairs in Australia were able to be run on an overnight basis.  For a long period of time much of this running was non-conforming on the letter of the law, on either speeds, and/or driver log books (SYD-BNE, MEL-SYD etc).  As the East Coast highway alignments improved in Australia, regulation tightened in parallel, so the transit time outcome remained largely equivalent.  Truck performance/costs (for units suitable for light weight express freight) were also converging at the same time that mandated speed governors were introduced.

Hence, the distinction between express line haul versus standard service line haul in recent decades became blurred.  The essential operative factor on any range when pursuing maximal economy, or maximal speed, is now the driver hour limits on most occasions.  Moreover, trying to best place rest locations on shuttle services is a significant factor in trucking service deliverables.

In plainer language the above means, that for economy as much as for speed, so long as your destination is within log book constrained range, you want your driver to complete the maximum distance at the optimal times.  These often converge as being one and the same in terms of both economy and service on the major east coast city pair sectors.  This is why, on occasion, express freight road carriers will choose to lay off their line haul at peak, or if they have last-minute maintenance issues, to what the market may generally regard as slower transit time general freight carriers.  The latter, in practice when employing driver handovers, often achieve the same line haul transit time as express carriers if their driver’s log book hours align.

When we look at the Melbourne-Brisbane sector bi-directional road carrier market the industry does not, in any circumstances, have the ability to match the overnight AM delivery transit possibility.  Unless the delivery is second day AM, it does not fit with standard customer warehouse inbound receiving patterns in either Brisbane or Melbourne.  PM deliveries are usually discouraged due to wave picks being concentrated at that time on evening outbound and next day local outbound deliveries.

In respect of transit times on the Melbourne-Brisbane sector owner-drivers must mandatorily lay-up en route either northbound or southbound as they can only run 14 hours in 24.  For those employing driver change-overs en route there are a number of possibilities for rest schedules.  For optimal transit times in both directions carriers have drivers rest at their away (from home) point.  Rest can be in the truck, or sometimes in pods at driver rest locations in terminals if vehicles are used for local work during the day, or they are sent for maintenance.  Any driver handover location en route can also be either set up as the driver’s home location or a rest point.     

For optimal economy outcomes on general cargo multi-day transit times like Melbourne-Brisbane, the carrier with company drivers/contractors can run in one direction at express equivalent / optimal transit time outcomes with a driver handover mid-route.  On the return route, necessarily prior to the handover location (if they have done a quick turnaround at destination), the driver will have exceeded the 14 hours continuous driving limit and hence will require rest in the truck en route back to the handover point.  This broken journey time into the handover point will  delay the transit time on that return route by the mandated rest time.

In the above instance maximising driver time has lowered service transit times on the return leg, as opposed to the owner-driver or single driver contractor services having delayed transit times in both legs.  In pursuit of removing those rest delays completely, an express trucking carrier running its own fleet can employ the neater, but higher cost solution, of resting drivers at each terminus and the mid-route handover location.

The point in having the above record set down is to provide a better market-based context of what is optimal for customers, and what is deliverable by carriers at what cost of operation.  These in turn form the basis of offerable market prices and transit time standards.

In contrast, the ARTC 2010 Final Report says in respect of methodology (substitute 29 hours transit time door-door now for rail according to the 2015 revision):

Transit time
– is the door-to-door transit time experienced by customers, assumed to be 25.5 hours for an inland railway trip. This includes an average of 5 hours of pick up and delivery time for Melbourne–Brisbane rail trips, noting that sometime sensitive freight will be delivered in a shorter timeframe but others may not be delivered until the next day. Road trips were assumed to have a 22-24 hour door-to-door transit time depending on whether road movements are consolidated via terminals. An average time of 23.5 hours was assumed for road freight in the following analysis.  In other parts of this document transit time can refer to the terminal-to-terminal transit time (also referred to as line haul transit time).
 
Presaged by:
 
“For contestable freight, freight firms and customers (listed in Appendix N) were surveyed, through a questionnaire and interviews, to understand how modal choices are made.”
 
www.artc.com.au/library/IRAS_Final%20Report.pdf
 
Gilead’s review of Appendix N of the 2010 report identifies only 1 renowned road carrier interviewed/surveyed in the Australian market for the carrying of express LTL or sensitive freight.  Further, the report author’s comment in respect of the delivery of “sensitive freight” is likely (in the market) to be related to express road freight, and not rail freight.
 
In respect of the scenario of seeking to deliver sensitive freight in the late PM in the destination city on the Melbourne-Brisbane route (on the basis of the then 20.5 hour proposed rail line haul standard), the question that should have been asked of the express trucking operator is “what percentage of your express trucking freight do you run from Sydney-to-Adelaide on direct line haul versus your choice of selecting 2nd day elapsed transit line haul via Melbourne?”   This question would have made a step toward sorting the chaff from the straw in respect of the desirability (customer demand v cost paradigm) for late PM next day delivery, versus 2nd day delivery on an equivalent distance sector.  Adelaide can also be delivered next day PM, but the incidence of carriers choosing to line haul express shipments direct to Adelaide is, in our experience, low.  This is likely also the case for Melbourne-Brisbane in respect of next day PM delivery.  Hence, in our opinion, rail should not pursue a small niche market that will in any case likely be served by the more versatile truck that can already be in front on a two-driver optimised transit time basis door-to-door.
 
In essence, to attract the more regular express road freight on the Melbourne-Brisbane sector, freight must be recovered at destination and be merged into the standard AM delivery sort process (included with the overnight freight from Sydney etc) to deliver a reliable second day AM delivery at the lowest possible cost. 
 
One issue, in respect of line haul arrival times on the Melbourne-Brisbane route is the beyond cargo whose connection to on-forwarding services at current schedules is in doubt.  This is especially so for the substantial Central and North Queensland markets.  Readers may recall the 2010 report’s “superfreighters are expected to stop to refuel and/or exchange freight only in Parkes” we quoted in our last post.  It is perplexing, in our opinion, that the report authors have omitted Gowrie/Toowoomba as a potential intermodal hub for the “exchange of freight”.  For freight switching from rail to road, Toowoomba is well located, given planned road improvements, to service beyond locations.  The earlier availability in Toowoomba, when compared to Brisbane, implies the ability to extend the “Superfreighter’s” transit time for northbound operations with little detrimental effect on Queensland consignees.  The inverse is also true for southbound cut offs.
 
One thing that did emerge in the 2015 report was the introduction of more aspirational narrative in terms of the inland rail serving regional markets & industry.  There was, however, no operating basis that would give us confidence that there is a plan in place to achieve that objective.  Next time, we will try to advance specific proposals that might see those stated ends coming within reach of inland industry.

In recent times in Australia, there has been governmentally-coordinated assessments conducted on the feasibility of an inland rail development that is promoted as a Melbourne-to-Brisbane Inland Rail Link.  The recommendations in the cited report following were apparently subsequently accepted by the respective governments, and we will be commenting on this report today.

http://www.artc.com.au/library/IRAS_Final%20Report.pdf
 
This very week there has also been a report that suggests that another trench of $1 Billion in funding toward the project will be approved in this year’s Federal budget.
 
www.abc.net.au/news/2017-04-20/government-likely-to-commit-more-than-$1-billion-to-inland-rail/8455230
 
Gilead’s submission to the NSW Grain Freight Inquiry in March 2009 did endorse this project in the westerly-routed form subsequently selected by the Commonwealth government.  We saw equal potential for the project to support growth of the NSW inland economy, but despite the project’s stakes rising, we should have recognised that there was trouble looming from the public service originated political sound-bites loosely framed along the lines that the government would be:
 
“Getting Trucks Off Our Roads”
“Greening Australia”
“Getting the Australian Economy Moving”

Now, however, our take on this project for Inland Australia, as it is currently framed, is that is a “Walk-On-By” construct that stands in the way of economic growth in the inland, & for Australia as a whole.
 
We appear to have entered an arena where contemporary Federal government project development, as portrayed by ABC’s “Utopia” TV series, is more reality TV than it is political satire.
 
www.abc.net.au/tv/programs/utopia/  
 
This Melbourne-to-Brisbane inland rail project, whose routed corridor might well have finally created an operative spine for the Australian rail network, is now oriented to access objectives that fail to support that end.  
 
You may well ask, how could a projected investment of $10 Billion in extending a physical rail line of standard gauge, on the optimal route, not be expected provide a spine that served to promote growth of inland Australia’s economic base?  
 
Upon detailed examination of this study & other reports in the intervening period, the conception for this inland rail line appears to have fallen into yet another tentacle-like construct.  What has been presented, in a supposedly objective case, is a Dr Who portal for freight to disappear from Melbourne and subsequently quickly arrive in Brisbane, or the other way around.  In the middle, NSW's Sydney interests suppose they benefit from lower road maintenance costs, while still effectively having protected their ports through the imposition of a non tariff barrier by way of the access regulation promulgated to favour through traffic on the corridor, rather than inland originating or destined traffic.
 
To see what the government has been up to we needed to look no further than Appendix G: “Train Operations” in the ARTC Melbourne-Brisbane Rail Alignment Study – Final Report July 2010.
 
We looked for the assumptions, and we found that a reference train had been specified.  It was called a “Superfreighter”.  They will run daily in 20.5 hours from end-to-end, and we found that:  
 
Other train types such as grain and ore trains, were not modelled in this study.  It was assumed that the schedules for these trains are flexible and that Superfreighter trains would have priority.
 
So, according to the study, by far the majority of the traffic, that which is unable to run in these “Superfreighter” train sets owing to it being restrained by higher axle weights to speeds 20km/h less than specified for the “Superfreighters”, will simply get out of the way (in itself not a very green or economically efficient solution, with all that extra accelerating and braking of the heaviest volumes on the line):
 
The problem, of coarse, with “getting out of the way” with trains that run “flexible schedules” is that it is difficult to predict, & hence model where they might be.
 
Moreover, we at Gilead having read this study, draw your specific attention to a lack of any citation or qualification from the authors in respect of modelling of regional originated or destined intermodal trains, or transhipment traffic, onto these “Superfreighter” services in this study.  Going by the abridged train-set configuration there was no designed re-configuration or set-down/hook-up en-route outside of Parkes transhipment to the East West line.
 
Indeed, the above is confirmed in the report tucked away on Page 94:
 
Operations phase
 
In consideration of regional employment generated by Inland Rail, the superfreighters are expected to stop to refuel and/or exchange freight only in Parkes.
 
And so, my dear reader, by way of an admission on the limits of economic engagement by means of employment – our understanding that the prioritised train sets will not provide any transportation services to the other economic regions of inland Australia is confirmed.    
 
Hence at Gilead, we are left imagining that regional originating or destined intermodal traffic serving inland industry, that which might seek to access this new infrastructure, in the project’s currently conceived form, may well be channelled into those unmapped “flexible schedule” trains; those that must get-out-of-the-way, and be non time-specific services.
 
We do recognise, however, that on page 18 of 115, we have this description of the author’s attention to the very separate issue of intra-regional traffic:
 
Freight to and from regions within the corridor
 
Freight between areas along the inland railway corridor is included in this category. Data regarding this freight are poor, but available information, including submissions from stakeholders, indicates relatively modest total freight volumes: currently 1 mtpa, growing to 1.9 mtpa in 2020 and 2.9 mtpa in 204 
 
And finally today, I hope readers will now recognise why we have dragged them through the tangled morass of Australian Constitutional legal history earlier in this series.   In this Inland Rail Development project, as it stands, we have an analogue of the Australian Constitution’s commanding free trade rhetoric, as compared to its dismal implementation and operating execution.
 
In our next post we will move onto the subject of actual market-based transport solutions, how they develop, and how they might compare to the survey based projections, assumptions, and omissions that we have waded through today.

We are seeking today to move onto a more contemporary footing.  We will not address specific local proposals and reviews, but we will be taking a look at our logistical infrastructure’s place in the political & economic world.  We will also still be applying historical references that we see as contemporaneous in infrastructure investment priority terms.  
 
We will start today’s review of Australia’s Eastern rail network with a situation report:
 
http://reports.weforum.org/global-competitiveness-index/competitiveness-rankings/#series=EOSQrailroad
 
Hence Australia’s railway infrastructure is ranked by the World Economic Forum at no. 36 in the world for competitiveness, and it cites a negative trend in their survey.  Besides the major western & eastern powers, Australia ranks behind states like Ukraine, Estonia, Azerbaijan, India, and we are only 2 positions ahead of Indonesia which has a fast rising trend.  
 
Crucially, our WEF survey rail ranking is 18 places behind Canada, which is our closest economic analogue.  This is despite our overall WEF cited competitiveness ranking being 22, and only 6 spots behind Canada.  Our lesser rail competitiveness is a part of that difference.
 
We should also pay particular attention to the existing higher rail infrastructure rankings of the emerging soft and energy commodity producing exporter states in international markets, those same seeking status in the One-Belt-One-Road initiative such as Russia and Ukraine.

First trainload of Russian wheat arrives in China:


In the first half of the 20th century Australia had a rail infrastructure competitiveness lead over many of our contemporaries.   We gained that lead by seeking to invest in order to facilitate an export-oriented economy, and by means of our ports competing among themselves for that same trade.  We also made wise down-payments in cities, especially so in Sydney, in urban heavy weight rail corridors (as we did in other renowned first world urban infrastructure like water and sewers). 
 
In citing the aforementioned we should not avoid confronting the “Gold Plating” cultural overhang that my father said his post-WWII generation believed they had to bear the tax responsibility for.  Neither should we allow a ticket-of-leave to the accompanying economy-of-scale orthodoxy employed by monopolists in having secured the exclusive or duopoly license regimes that accessed it, and served to restrain or degrade its economic potential.  We will not dwell on these elements further here, but we will mark them as noteworthy contestable subjects.
 
In respect of redress to the historical anti-competitive issues that affected rail freight in Australia, we must mention that the Standard Gauge network, based upon the historical NSW state gauge, has grown in the post war period.  It now corresponds with the Commonwealth government owned ARTC line network that is shown in deep red on the map in part 1 of this series, plus the remainder of the NSW operating lines.  The majority of these standard gauge lines are leased from the respective States.  Otherwise states retain their legacy gauges.

There is also an access regime and competition supervision (more on that later).  Together with the proposed additional sections that should come together to form a contiguous Melbourne-to-Brisbane rail line, which in the northern corridor will mainly will be dedicated to freight operations, there may well be the basis of a spine for a future rail freight network as conceived in many other more economically competitive countries. 
 
In NSW there has been substantial capital investment in urban rail yards, and in dedicated freight lines in Sydney.  There has, however, been little investment by way of comparison in regional rail yards (we will also be returning to that issue later).
 
While we are on the subject of contestable government sponsored infrastructure history, however, I will mention the two incongruous state funded infrastructure developments in the post war period.  The first was the Snowy Mountain Scheme which is well known for its hydro electricity component but less so for its boost to the Murrumbidgee Irrigation area.  Twenty years later were the NSW black coal-fired power station developments delivered during the 1980s.  In an era when infrastructure project funding typically reached only 0.40c in the required dollar, these were a return to the pre-war gold plating. 

The released Fraser Government Cabinet papers to date do not confirm the view, held by some, that the raison d’être of Commonwealth support for the level of investment in electricity supply growth in the 1980s was that the Government saw East Coast intercity and regional rail electrification as an appropriate strategic response to geopolitical events surrounding the ‘70s oil crisis.  Having been involved in the import and delivery to site of the major electrical control equipment for the new black-coal stations I can recall that view being held by engineers at the time.
 
I have also heard the above proposition firmly denied by those that claimed to have been Fraser Cabinet attendees, but my point here, in citing this controversial matter, is that strategic ends have a habit of being revisited in history.  Australia has long had dwindling local oil reserves, and we do not have significant diesel or avgas fuel production capacity.  It is, therefore, also strategically noteworthy that Australia’s logistical backbone is, in the absence of rail electrification, or some new technology, heavily dependent on these same refined energy sources. 

From the 80's onward, however, there was political blowback led by the NSW Greiner Government in particular, and governments reverted to neglecting investing in baseload electricity generation capacity.  Today we have a crisis as a result.  We won't be revisiting this matter later in the series as our proposals revolve around diesel powered traction, but these abrupt investment cycles are noteworthy, and form part of the dysfunctional environment we are confronting.
 
Finally, we have delivered a smaller sized post today, more in line with norms for this genre.  Still, however, we have yet to address specific contemporary proposals, or their reviews.  We promise to make more headway on specifics next time.

If you thought we were well done with the historical elements of Australian East Coast inland trade, today you will be disappointed.  So brace yourself.  My hope is that you will trust that your labour-in-reading will ultimately prove worthwhile in respect of interpreting more contemporary events.

We need to make more of an impression in respect of the detrimental impact of political legacies upon the relative productivity & economic capacity of the Australian nation versus contemporaries.  This applies especially from the latter half of the 20th century when investment in the rail sector was curtailed.

Today we intend talking about Australian monopolies and duopolies, but to do so we must once more return to the 19th century.  And yes, principally, our chain-of-events involves the issues of protectionism, state political borders, and state controlled primary hub ports.  We are concentrating on the period through to the political birth of the Australian nation (the Federation of the Commonwealth), which was finally proclaimed in 1901 after 20 years of negotiation.  

Starting from the 1850’s, the individual colonies that were later to become states, each shared the bright idea that they would implement different rail gauges.  This was driven by trade protection interests that sought to secure goods emanating or destined for their state, to depart or arrive through their state’s ports.  Likewise, produce or manufactures from interstate would become subject to a form of non-tariff barrier.  The duties, taxes, and economic spin-off associated from port derived activity, were the colonial politicians & their treasurers’ primary impetus.  In contrast, the priority in practically & collectively arranging for the defence of terrestrial Australia from foreign invaders was obviously an interest of lesser political weight.

Approaching Federation (which was proclaimed in 1901), the convention vote for Commonwealth (national government) control of the railways was only narrowly lost.  This was despite the entrenched positions of the existing colonies.  Moreover, there were several other curious aspects in respect of Australia’s Federation negotiations.  First among them was that the Victorian leadership, and their citizenry, were at the time the strongest proponents of Federation, while the majority of the NSW elite were the most resistant.  The NSW populace, in contrast, were shown to be supportive of Federation in the two referenda in the decade preceding the Proclamation.  

What is confounding about the above is that the state of Victoria, otherwise in its history, has been regarded as the most protectionist of the Australian States; with NSW widely regarded as the most open & inclined toward trading externally.  Further, the financial and fiscal responsibility shown by NSW was far stronger during the aforementioned period, as was demonstrated when Victoria had over-indulged itself fiscally (on asset price bubble spin off) during the goldfields boom, and then paid the price in the 1890s bust.  My great-grandparents had indeed physically separated themselves from this bust  by means of emigration to NSW.

Even more confounding, was that during the Constitutional bargaining, the delegates finally agreed to the supposedly legally commanding wording of Section 92 of the Australian Commonwealth’s Constitution:

“... trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.”

But if you thought this surely had established some productive high road in the Commonwealth, one that would, in and of the wording, regulation, and judicial decisions to follow, you would be quite wrong.  You would indeed be omitting a century of state and federal licensing, monopoly/duopoly protectionist evidence of the same type that our friend Mr Gordon Barton willfully confronted as a young man.

Indeed, perhaps too Gordon took inspiration from his Sydneysider namesake Edmond Barton, Australia’s first Prime Minister, and a founding High Court judge.  Edmond, despite his position among the NSW elite, was co-author of the “trade and intercourse ... shall be absolutely free" proposition at our first constitutional convention in 1891.

A small mercy to our readers is that we won’t labour through Australian High Court Constitutional case law in this blog series.  It is sufficient to have observed that various licensing/regulatory regimes, & government mandated market monopolies/duopolies, had their place in restraining domestic ocean, air, rail, and trucking productivity nationally for over a century on our High Court’s watch.   

In my own time, I can still personally reflect on several aspects that continued to debilitate the national transport market when I was a young man.  I can recall in the mid 1980’s our trucking organisation having to secure interstate number plates in order for our linehaul fleet to be compliant with state and federal regulation when operating on interstate routes.  

I also recall in the same years representing the Australian Federation of Air Freight Forwarders at the Aviation Law Association lectures in Sydney.  There, a paper (presented by Peter McQueen) documented the constitutional legal questions in respect of a business operation of East West Airlines.  This airline had sought to disrupt the then license backed airline duopoly accorded to Commonwealth government-owned airline TAA, and Ansett a privately owned competitor.  The latter were licensed to exclusively carry air freight & passengers on interstate routes.  East-West Airlines sought to fly freight from Sydney-to-Melbourne and return in competition.  East-West then attempted to do so legally by undertaking a landing at the intermediate point at the state border city airport at Albury in order to utilise two intrastate licences to perform the task they were prohibited from performing on a direct flight basis.

Given the above as context, we will finally return today to an essential matter that we briefly raised in our first post.  Protectionist State Government regulatory and capital expenditure biases in Australia created an essentially spineless domestic railway system.  The rail network supported individual sea ports, and at each state border what may be called a defacto intermodal transfer was required (from one rail gauge to another).  In the face of later competition from disruptive truckers, those that challenged state permit/licensing requirements, the government-owned intrastate rail freight networks degraded for lack of profitable business, and subsequently collapsed.  In many cases, branch line operations (track and their rolling stock) reached such a low standard that they became unsustainable. Such is the state of much of the smaller retained branch line network bulk-carrying rolling stock that their employ also effectively requires de-facto intermodal transfers (to higher standard rolling stock) at junctions with mainline operations.  

The reason that the rail network in the East Coast inland remains essentially spineless is derived of historical events, but these same political and monopolistic forces remain elemental influences in planning policies espoused today.  

When we speak of a spine in rail, it is best to talk first of the contrary case, where Australian rail transport loads are primarily moved to-and-from ports.  In most cases these ports coalesce with our major state metropolises and commercial distribution centres.  When combined with the historical perspective, it may be easier to relate to my description of the rail network as it stands today as having, in the main, being framed as independent sets of tentacles emanating from the major sea ports.

In our next post we will seek to finally move on to a more contemporary footing.  We will also start to look at recent Australian rail planning proposals and reviews.  Moreover, as a counterpoint, we will start to discuss the shape of contemporary rail networks in the major developed regions of the world, those whose primary transportation infrastructure includes rail lines that not only serve as a spine, but also support a multiplicity of ribs.  Moreover, the objective in pursuing of a spine and rib based rail network model is to seek to provide frequency, access, and economy for shippers and consignees in all parts of the network.

Today’s post, when read in isolation, may appear a personal indulgence. I feel it is necessary, however, to describe the colonial cultural & economic conditions that prevailed as critical early Australian transportation infrastructure investment decisions were being made.  By looking to motivation in specific early cases, readers may see better how the broader contemporary environment evolved.
 
The first western trading port established in the continent that was to become the Commonwealth of Australia, was Sydney.  From the earliest days of the colony, the British Red Coats (marines) set about monopolising trade, which at that moment, was primarily inbound to the port.  In order to do so, the “Red Coats” set up gun emplacements located upon the cliffs at the heads into Sydney Harbour.  These sites are today historical features that are well posted and popular attractions for visitors to a preserved and picturesque area of Sydney.
 
These same poorly-paid, yet entrepreneurial British marines, were following a customary practice in which they sought to do personal business by employing their force of arms to establish a monopoly wherever it was politically practicable throughout the British colonial world.  Back in these early days of the New South Wales colony, upon the marine’s sighting of a ship seeking to enter Sydney Harbour, they would embark a whaling boat to meet and discuss terms for the vessels entry into the harbour. 
 
In order to be given safe passage into the harbour, the terms agreed would be that the entire cargo to be landed was to be sold to the said marines.  After the cargo was subsequently sold in the Sydney market (at exorbitantly higher prices) the ships captain would be paid his earlier negotiated sum, and be free to leave Sydney Harbour, without having been disturbed by cannon fire from the marines gun emplacements at the heads.
 
And so entrepreneurial monopolistic practices derived of those backed by governmental credentials were in the ascendancy from the outset, in the land that was to later declare itself the Commonwealth of Australia.
 
Later, with a growing diversity of ports & colonial states being established on the Australian continent, the said monopolistic practices came under threat of competition from those alternate parties.  Another feature was that pioneers themselves became entrepreneurs and traders,.  Many chose to stride out and away from the government controlled ports (towards the inland) at any given opportunity.
 
It is from this point that I will introduce my father’s family history.  My grandmother’s parents were both born in Victoria in the mid 19th century.  My great-grandfather was raised on the goldfields, but when the young couple met it was at Echuca/Moama on the Murray River, which constitutes a western twin town crossing at the New South Wales (NSW) – Victoria (Vic) State border.

"Cobb and Co coaches were invaluable for the transporting of goods. An unimaginable amount of luggage was piled high on top. For anyone who has ridden pillion on these coaches  the swaying is about a foot  up and down."
Source: megalongcc.com.au 


In the 1880’s, my forebears chose to strike north into Far-Western NSW following a trade route that would ultimately see external trade from these same areas move through Victorian ports.  My great-grandparents played their part in facilitating this disruption by eeking-out a living while providing services to travellers & transporters along this route. 
 
At the time, in the 1880’s, there were two primary overland routes running north from Moama.  The route veering slightly north-east through to Cobar & Bourke was where my grandparents first gained the licence for a Hotel nearby an established sheep station and stock route crossing.  It was days of travel away from any township. 
 
Later, they were licensees of government (water) tanks for well over a decade a little further west, those that were established at twelve-mile intervals in the harshest regions along the route from Ivanhoe-to-Wilcannia on what is now the Cobb Highway.  An accompanying Ward’s Horse Exchange operation was a part of their business, this being one of the earliest entrepreneurial franchises in the country.  
 
The overland coach operations were extremely expensive to operate.  By today’s standards Cobb & Co’s passenger ticket prices were exorbitant, as were the dray carrying prices for bulk cargo.  The opportunity for this family, and many others, in providing transport services along this route was derived of the richness of the trade in world market terms. Moreover, it was aided by the fact that the parallel Darling River’s flow was inconsistent, which in turn lessened the lower cost paddle steamer’s opportunity to compete with the ground carriers.  
 
The NSW government, however, wasn’t about to let trade derived of economic activity & production on their NSW soils be diverted from NSW ports for very long.  And given the widespread proliferation and cost advantages derived of rail transportation technology, they chose to drive a rail line from Sydney-to-Bourke via the existing Dubbo line that was completed in 1885. 
 
Consequently, my grandparents chose to move across to that more westerly northern route from Moama to Wilcannia where  the provision of rail access was less economically justifiable at the time.
 
And so it was that entrepreneurial & disruptive transportation efforts provided a family its economic foothold in the NSW colony.  These same disruptive transportation services facilitated production and market based trade in their day.  Such was the state revenue leakage that it subsequently served to encourage capital investment in new more efficient rail technology for the western NSW transportation market.

Last week I returned from a journey tracing one line of my family history in the western region of the state of New South Wales in Australia.  This family history was ably chronicled by my father, and it is to him whom this series of posts owes its inspiration, and hence is primarily dedicated.
 
There are intersecting elements within my family history that touch both past and contemporary Australian logistical infrastructure planning policies.  Derived of these same elements, I will seek to critique contemporary transport planning (focusing on rail infrastructure principally), and later introduce proposals for Eastern Australia.
 
I am under no illusion in respect of the difficulty in either nudging or displacing evolved interests within the planning development process.  Infrastructure access and capitalisation initiatives have a long history in Australia of delivering sub-optimal developmental recommendations, those narrowly channelled to favour the immediate defence or growth aspirations of a particular interest group with a limited number of pre-designated beneficiaries.  Yet, so too is there a long history of infrastructure gold-plating, and infrastructure pathway congestion, derived of political decisions that are found upon delivery to serve all interests equally poorly.

When examining the development of logistical networks in any state globally it is necessary to take a panoramic historical view that includes local politics, demographics, infrastructure, technology, and markets. 
 
To open, I will firstly try to convey some of the perspective on the fairly unique pattern of historical Australian transport network development when compared to international analogues.  The extent of this divergence came as a surprise to me when I first ventured overseas and engaged with those employing US, European, and Chinese transport infrastructure networks.
 
The aforementioned divergence (with the major developed economies) arrived, in part, as a consequence of Australia’s relatively polarised demographics & production centres, and also the greater propensity of bulk-to-port carriage in the transport mix.   In transportation network terms, the movement of goods between the aforementioned poles has meant that we have long tended to prioritise the development and funding of transportation channels that facilitate the loading of trucks, trains, or ships at one point, and then moving them using the most direct route possible (with minimal interruption/ inter-modal transfers), to a terminal within close proximity to either the goods destination market, or an export port.  
 
In essence, in Australia there has been very little emphasis on the employ of intraregional hubs that might bring opportunities to originate and consolidate transportation loads at similar levels of efficacy as those achieved at primary port hubs, or from bulk goods aggregation origins.  Hence, decentralised productive potential, and greater export trade diversity /competitiveness, for products sourced or derived of fertile inland agricultural sources or industry, is being hindered by long extant infrastructure spending and access bias. 
 
When I first visited foreign shores, my own bias in the above respect was already well embedded.  At that time, I saw only that these far larger nations’ express transport organisations were often taking two to three days to deliver over distances that Australian express trucking transport companies were delivering in one day.  In the Australian market this applied on our dominant East Coast capital sector connecting routes, and also from each of them to their secondary markets being their major intrastate regional centres. 
 
This same style of certitude on minimising transit times by going as hard as possible on an overnight basis did find its place in the transport mix globally.  New markets grew as a result. This modus rightfully retains a place, but it should not displace more economically viable transportation network solutions, those that better serve markets in competitive market economies.

Gordon Barton was a charismatic Australian monopoly & red tape fighter whose commercial efforts began in the 1950’s, and he had certainly seen it the way it is described above.  Gordon was a shining light for myself, and many others in the transport industry internationally.   One of his early commercial escapades was said in his obituary to have been transporting onions across Australian State borders at a time when domestic trade and transport licensing regimes were diabolical.

Barton saw his opportunity to transplant his IPEC operation into Europe from 1979. It was an organisation that would eventually evolve into the global TNT express operations. This company, in turn, was sold recently by ultimate owner the Dutch Post Office to Fedex.  Once in Europe, however, Barton chose to adopt a hub and spoke model, which meant that he was sufficiently intellectually tactile to be able to adapt his strategic vision to the markets that he sought to serve.

The reality is that a nation’s transportation infrastructure networks and regulation must be continuously optimised to serve trade potential.  Hence, it is in the overall interests of a nation state to have entrenched positions challenged (disrupted) rather than perpetuated at key points. Notwithstanding this, making a case that we should facilitate specific infrastructure development, such that may increase disruptive & competitive potential, will be viewed as a radical stance in the Australian environment.  We are, however, determined to do so because we believe that the potential to “grow the pie” may benefit even the many that might instinctively oppose such proposals.  

We will attempt to take incremental steps in this series in developing our case.  And hence next time we will be delving deeper into the 19th century record of the development of Australian transportation infrastructure that we mentioned at the outset of this post.

Postscript:
As I am in the mood for memorials, an excellent history of the express transport industry in western markets, one that includes Gordon Barton’s feats, can be found in the following three posts attributed by Post and Parcel to Paul Jackson:

http://postandparcel.info/31168/in-depth/the-rise-and-rise-of-the-integrators-2/

http://postandparcel.info/31249/in-depth/the-rise-and-rise-of-the-integrators-part-ii/

http://postandparcel.info/31401/in-depth/the-rise-and-rise-of-the-integrators-part-three/