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.
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 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):
– 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).
“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.”
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.