The push is on to get more freight onto rail, and automation may be key to this process.
Back in 2010 the NSW government set a target for the state that 40 per cent of freight to and from Port Botany would be carried by rail. Although this has since been adjusted down to 28 per cent, rail freight’s mode share in 2020 is still below 20 per cent. NSW will need more than a year of unprecedented circumstances to meet its target.
The NSW government is not alone in seeking to get more freight on to rail and setting mode shift targets. In Victoria, the state government has committed to achieving a 30 per cent rail mode share target and is giving itself until 2030 to meet this figure. In Queensland, at the Port of Brisbane, there are hopes to accomplish 30 per cent rail mode share by 2035, however achieving that depends upon the construction of a dedicated rail freight link.
While Australia has embraced the efficiency of rail when it comes to moving iron ore in the Pilbara and coal in the Hunter, when it comes to containerised freight it’s a different story. However, the targets for rail mode share at the country’s primary container ports on the east coast show a broad commitment – in theory if not in practice – by governments to rail freight.
According to Charlotte Stanfield, national client account manager – strategic advisory at Calibre, increasing awareness of some of the downside of road freight is leading to greater awareness and interest in getting a lot more freight onto rail and achieving these mode split targets.
“You’ve got a situation now where you’re seeing increased road congestion, increased desire to see more goods moved by rail, yet in spite of 20 years of discussion, engagement with industry and government policy initiatives, we still do not have dedicated freight rail connections into the ports or the long promised interstate and regional intermodals.”
With ports in Melbourne, Sydney, and Brisbane located near the historic city centre, surrounded by dense urban development and separated by suburbs from distribution centres at the peri-urban fringe, decision-makers are turning to rail to retain urban amenity.
“If you can unload all your goods from port and seamlessly transport them to the outer suburbs by rail and then hub at intermodal from there with both trucks and with trains you start easing your space in the city,” said Stanfield. “That gives you quality, value and global competitiveness while also giving you environmental benefits.”
Once the future Inland Rail line completes the missing link in Australia’s national freight rail networks, the points of interchange between the national rail network will become ever more key.
“There is opportunity to accelerate the collection and diffusion of goods by rail and the key to that are the terminals at Parkes, one inland from the port in Brisbane, and another inland from the port in Melbourne.”
Need for leadership to overcome policy gap
Although this future may look bright, it’s clear that policies without pricing and funding incentives are not working, a different approach needs to be taken to meet these ambitious goals. As it stands, Stanfield reminds us, more and more freight is being carried by road.
“You’ve got a situation where it can be seen as cheaper and more efficient to move goods by truck, because the trucks aren’t paying necessarily the full price of the movement of goods compared with the cost of transporting goods by rail, so the challenges are as much as anything about leadership by government. It’s about tying policy positions on the movement of freight by rail and these mode split targets, with a change in the existing pricing regimes and blended public and private sector investment.”
While private businesses have signalled their interest in investing in freight rail, the policy settings that hinder its profitability compared to road freight have limited the appetite to move freight by rail and construct and operate new intermodal facilities and send more freight via rail.
“If you look at a body such as the Australian Logistics Council, the board comprises former Infrastructure Australia CEO Philip Davis as the chair, you’ve got Simon Ormsby representing ARTC, the ports of Melbourne, Brisbane, Sydney and Newcastle all there represented by their CEOs. You’ve got Toll, Linfox, Qube also present and a couple of independents, there are forums where you’ve got the private sector already talking and hungry to do more,” said Stanfield.
With the federal government currently considering businesses cases for the location of intermodal terminals at either end of the Inland Rail line on the outskirts of Brisbane and Melbourne, state governments seeking to develop regional intermodals and industry lined up to deliver, a spark is all that’s needed to light up change.
“Business as usual is not working: a catalyst for change that captures the imagination is automation,” said Stanfield.
The lessons of the West
On the other side of Australia, automation is already present in a big way in the iron ore network of the Pilbara. David Dixon, one of Calibre’s rail systems specialists, has been working alongside Rio Tinto for the miner’s world first project AutoHaul. For the past decade Calibre has been the Engineering Procurement and Construction Management consultant on the project.
“It’s an interesting time because we’re getting a convergence of the technology and the will or need to have efficiency in the process. A lot of that is being driven by mining companies that want to improve their efficiency, which is very similar to container or intermodal freight.”
While automation up until the last decade has been focused on individual tasks within a process, what AutoHaul demonstrated was the capacity to automate an entire process, from pit to port. As Dixon explains, the same principles can be applied to containerised freight, where significant parts of the supply chain are already automated, from gantry cranes at ports to handling at distribution centres.
Unlike mining, however, the fragmented nature of the container freight supply chain means that implementing automation is more complex. Automating an intermodal terminal, for example, requires the consideration of multiple freight rail business all with different types of freight locomotives that could be operating simultaneously.
“You get to a situation where you need to protect the train you’re on, but then you need to protect the train that’s adjacent and to do that requires a much larger scale,” said Dixon. “Because there’s a larger physical area that’s covered, you’ve got to focus a lot more on your area restriction; when you have containers moving around you obviously can’t have people walking around underneath or even in the locomotive.”
While these challenges, and others like them, present obstacles, they are not insurmountable, and Calibre is already working alongside a major new intermodal facility on the east coast that will be one of the most automated Australia has seen. In this case, Dixon highlights, the combined benefits of automation compound.
“When you start serialising or combining automated components in a process you get into situations where the benefits accumulate. For example, if you automate your entry of the train, it helps a bit, and if you automate the cranes, that provides a separate benefit but if both of those systems are automated and working in concert, along with load stacks off the side of the rail, into the warehouse, then resulting efficiencies are greater than the sum of the parts .”
“Each time you add to your automation suite you get an improvement in efficiency, and a lot of companies are starting to see this and the technology is becoming available to make it not only possible, but effective,” said Dixon.
Realising the potential of a fully automated supply chain
Not only is there a strategic case for automation, but the deployment of next generation signalling across the Australian freight network will enable connections between terminals as well.
“In the communications-based signalling world, we’ve got a means for feedback, for providing data off the train which is critical to some of these external systems,” said Dixon. “They need to know precisely where the train is, it’s not good enough to know that you’re within that five, six, or seven kilometre block section, we now need to know specifically where your train is because the automation systems that apply, whether it be mining for loaders or dumpers, or intermodal for containers and the like, they all need to know specifically where you are.”
Having had experience with these technologies in the Pilbara, Calibre is ready to apply the lessons learnt from that project and the broad expertise needed for the automation of intermodal facilities and the containerised freight chain in the rest of Australia.
Calibre’s integration of automated systems and technology within intermodal sites is creating efficient, economical and safe workplace change across Australia.
“Calibre is not just rail, we’ve got rail systems engineers, communications engineers, control system engineers, all of which contribute to a successful design and delivery. In addition to the multi-disciplinary nature of these groups, each has experience in their adjacent areas, allowing more effective integration,” said Dixon.
At the strategic level, Stanfield brings not only an understanding of the rail sector but the property side of the equation as well.
To make the investment in automation pay dividends, Stanfield notes, consideration needs to be given to how intermodal sites can create value through connections to co-located distribution centres.
“It doesn’t fly straight as a rail hub on its own, to make the site pay you do need that retail component so we have a blended team in respect to rail and property that can get precinct and place outcomes, leveraging our knowledge of governance, of the value of property and integrated property development, to achieve the end task.”
Taking these steps now is critical, with supply chains at a tipping point towards the post-COVID future.
“Business as usual is not working,” said Stanfield. “We’ve tried it for the past 20 years and if we wait another 20 years there’ll be hardly any movement of freight by rail.”