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Opinion: The crystal ball-bearing

Published: 12/02/2018

Opinion: The crystal ball-bearing

Gazing into the next 25 years in road and rail freight



In 25 years' time I will reflect on the following predictions.

I suspect that reality will go much further than any of these predications and they will all come to pass within 12 to 15 years.

Let's see what happens after that!

Urban Performance Based Standards

Since the inception of the Australian brand of performace-based standards (PBS) emerged whose initial concepts were borrowed from Canada in 1997, some 99.9 per cent of PBS vehicles have been trailered or multi trailer combinations.

This will change.

The urban task is ever growing, especially with the explosion in home shopping and newer configurations are needed, especially as much of the e-commerce task is volumetric in nature.

Manufacturers will also need to work with designers to realize some of the international and domestic urban concepts that will have significant demand if these designs were brought to market.

In many cases innovative urban PBS designs could replace not only urban semi-trailer work, but also suppress heavy 3-axle rigid truck growth when handling some commodities.

A National Co-Operative Rail Strategy

This idea combines the co-modal use of High Productivity Vehicles working a significant proportion of their task to sets of strategic rail hubs on rail corridors and even in outer urban areas.

This co-operative strategy could go hand-in-hand with more lenient access arrangements for the HPVs undertaking work to these major rail hubs, perhaps even eventually utilising vehicles such as Super B-Triples and A-Triples.

Currently the humble B-Triple and A-Doubles have an outstanding safety record. The use of such vehicles, which are not only safer but generate a lower gross tonne kilometre task on road pavements would require IAP monitoring.

The prospect that new rail hubs will emerge within the next decade will make such a co-operative arrangement even more feasible if the current breed of pavement engineers can take a more holistic view of a co-operative freight task.

Drones

Drones are a fact of life now so what can the householder and the freight industry expect in the coming 25 years?

Drones will be used for packet deliveries, not necessarily to every householder but to specific access points and hubs.

Certainly drones would be a way of avoiding congested peak hour traffic, especially for emergency delivery of small parts, emergency hospital needs, and super urgent packages.

Something a bit bigger than drones will definitely emerge, aerial taxis. We will see a massive increase in flying taxi services to far more points than current helipads.

These vehicles have been developed already but a framework for operations needs to be created.

The vehicles could also take those super urgent packages and even organs for transplant, again avoiding city congestion. How will these vehicles be charged?

Road Pricing

The quasi efficient and equitable model that has been in the protection of the National Transport Commission for 25 years will be thrown out the window as treasurers just want to see charges go up and up each year.

Any model that does not go up each year, and can actually go down, like one sees after the recent six years of falling road GDP, and lower average freight kilometres won’t achieve the increased revenue aim.

Besides the public will always turn a blind eye to charges on those heavy nasty dirty vehicles that it is often said, even by some State Treasurers, that they don’t pay their way, even though this is a massive falsehood.

From an urban perspective the endless chant for ‘congestion pricing’ will win out despite the fact the current high parking charges in cities are an indirect congestion charge, and folks do pay tolls.

How you exempt tollway use from future congestion charges will need a super computer to do efficient allocations.

Will parking charges also change to reflect some degree of user efficiency instead of having the cheapest parking charges available when a vehicle arrives in peak hour and leaves in peak hour, which defies any logic of efficient pricing.

Driverless vehicles

How will the current hype translate into reality?. Initially badly, as a thousand holes will be found in any implanted algorithm as has been shown to be the case thus far.

However, the experiment will become bigger and the accidents will follow.

The biggest question is "who will insure these vehicles?"

Several insurance companies are sitting on the sidelines, some wanting a decade’s worth of data before they give the thumbs up to this new insurance product.

Current trials are generally insured by the manufacturers, or a provincial government hosting the trial.

In one recent case when asked who the trial insurer was the retort was, "It’s confidential, we can’t disclose the insurer?" Why, I wondered.

E-Freight Markets

Currently many e-freight markets have gained little traction as many smaller operators have stayed under the control of their 3PL lords who pick 20 per cent off the trip fee, but they do the matching service for the truckie.

Up to this time owner drivers have been extremely tardy in registering on e-freight markets, even though it is in their interest to do so.

Most e–freight markets take about 7 per cent commission so the subbie could get a better deal than dealing through a 3PL.

However, laziness often prevails and someone doing the admin for the booking has the small operator being accepting of this situation.

However, the words ‘UBER freight’ would be an attractor to many operators, perhaps several thousand, who might register on the UBER freight database.

The possibility of an extra trip here or there can’t be a bad thing, at least not for the truckie, but perhaps so for the freight broker.

Chain of Responsibility will not fit well with e-freight marketplaces as an electronic server that takes bookings without human contact does not have the same knowledge as a dock despatcher.

Reliance will be on the drivers being truthful as to their compliant status when accepting the trip, which in many cases will not be a long distance trip.

Again how insurers will actually insure e-freight market operations will need clarification for each trip, but this is a far easier insurance problem compared to the future autonomous vehicle problem.

Inland Rail

Inland rail will be great. We might get a 22 hour service between Melbourne and Brisbane also servicing a set of major freight hubs on the way, at least for some selected services.

Currently with one forwarder sending a 48 foot container by rail to Brisbane from Melbourne is 5.1 per cent more expensive than sending it by a road service that is 18 hours compared 50 hours plus via Sydney with existing rail.

So, will we see the rail operators come back to a rate difference of say rail being a 47 per cent discount to road as it is on the East – West corridor when Inland rail is realised?

It might also be tempting that rail operators might think that a 22 hour service should be a premium service Against a 50 hour service via Sydney it may be but the competition is with a two up road service doing about 18 hours.

Certainly, an inland rail route will have to be well discounted to attract customers away from road, as non owner driver road services will still be faster than rail, and they are a giving a customer door to door service.

One can add about another two hours each end on the proposed Inland ail services for an end to end customer delivery, so that’s about a 26 hour customer to customer service. So rail operators will still have to be wary of the competition by road.

One of the most important studies on the Adelaide to Darwin corridor was ‘The road response to Adelaide to Darwin rail link’.

It was not a public study but it showed that against the competition of road trains, with less than 2% margins, the rail service could never be a premium service.

As well, if rail deviated from a trip time of more than 34 hours then road would reclaim the high ground on this corridor.

What will be the road response to Inland rail? An 18 hours road service doing customer to customer is 8 hours less than a 26 hour rail and urban road shuttle service.

This eight-hour difference equates to an entire working shift for a distribution centre and will need a hefty freight discount for customers to forego this time dis benefit.

Also, what new configurations will appear on this new corridor. Well inland rail may break down two major falsehoods in Australian rail mythology: that trains must be at least 1.5 kilometres long and run over 1000 kilometres to be profitable.

Both home truths are false. Britain runs many short freight trains over short distances and these are profitable. We may see cargo sprinters operating between major hubs and not just having dedicated Melbourne to Brisbane long train services.

The ARTC may well have to create anew pricing regime to cater for newer shorter technology that may well enter operation son this corridor. All new entrants will be no doubt welcome.

In 25 years time I will reflect on these predictions. I suspect that reality will go much further than any of these predictions and they will all come to pass within 12 to 15 years. Let’s see what happens after that!

Dr Kim Hassall is a director of the  Industrial Logistics Institute and chair education of the Chartered Institute of Logistics & Transport, Australia.

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