Engineering, Freight Rail, Research & Development, Technology and IT

The CSIRO model shaping future supply chain strategies

Rail Express spoke with the CSIRO about the model aiming to quantify and map out constraints across Australia’s vast supply chains.

Agricultural production in northern NSW and southern Queensland comprises a diverse array of commodity types, including sheep, pigs, grains, cotton, dairy, and horticulture.

Road and rail networks, and the processing and storage facilities along them, form the lifeline of these regional industries, linking farms to foreign markets via the Port of Newcastle and the Port of Brisbane, and various domestic markets across Australia.

Distances of over 1,000 kilometres between production, processing and the marketplace are a regular feature of Australian supply chains, with transport costs often making up approximately 40 per cent of the market price.

For producers trying to get their goods to processing and storage facilities, or directly to market, this complex of transportation networks, and their varying constraints and advantages in different locations, can make logistical decisions difficult.

The Transport Network Strategic Investment Tool, or TraNSIT, was first developed by the CSIRO in 2012 and 2013 under commission from federal and state governments to identify bottlenecks in livestock supply-chains across northern NSW and southern Queensland.

Today, it now covers 98 per cent of all agricultural and horticultural supply chains.

The TraNSIT model serves to map out and quantify the various constraints affecting supply chains. Since 2012, the CSIRO has collaborated with more than a hundred different industry associations and government agencies to gain access to datasets from industry and government.

“In relation to rail transport, TraNSIT has mostly been applied to grain supply chains so far,” said Dr Andrew Higgins, the CSIRO’s lead researcher working with the tool.

“It looks at the potential benefits of upgrading loading facilities and improving load times, and the impacts of future train configurations – how longer trains with more locomotives and higher axle-load limits can improve supply chain efficiency.”

In the rail sector, the Australian Rail Track Corporation (ARTC) has used the tool to support its work on the Hunter Valley rail network, where it has been focussed on leveraging the significant expenditure within its heavy haul network to benefit wider regional supply chains.

Over the past three years, the ARTC has introduced a number of initiatives to encourage modal shift to rail, including the lifting of axles loads and train lengths across the Intrastate network corridors between Dubbo-Gulgong and Narrabri-Moree.

In carrying out these initiatives, the ARTC has worked close with rail operators at the agricultural sector to determine the impediments to the utilisation of rail.  And, using the TraNSIT tool, the ARTC has been able to quantify the total transport costs for these agricultural commodities over their whole journeys, based not only on individual trip costs but across total production and likely end market destination, demonstrating the benefits of these upgrade projects and pointing towards further solutions.

“The tool itself can not only indicate which infrastructure is the limiting factor but will give a transport cost (road or rail) according the route taken and the maximum payload and time taken for a for a specific route,” ARTC’s business development manager Michael Clancy said.

“Individual infrastructure owners can then apply different parameters to test if a particular infrastructure change will provide an economic benefit great enough to proceed with further investigation or project initiation.”

According to Clancy, the key advantage of TraNSIT is its ability to easily test scenarios across transport mode and commodity-type, providing a visual demonstration of cost impacts and outcomes.

“All supply chains will eventually follow the least cost path to market, and while it may not currently include handling costs incurred during modal transfer, the tool can definitely provide insight into how lower payloads or increased transit time impacts on the cost of moving products,” Clancy said.

“For ARTC, it assists on not only what we can directly change on our asset but how we can work with our supply chain partners and governments to provide solutions.  Some of these solutions are not necessarily purely infrastructure related, some are operational and supply chain coordination related that impact time or reliability.”

Overall, TraNSIT is in its early stages regarding its possible applications within the rail industry. Nonetheless there are expectations that further opportunities would arise with the continued accumulation of commodity data.

“I think historically we’ve been limited in our ability to rapidly test scenarios and seek a coordinated response to supply chain issues,” Clancy said.

“The relatively long life of rolling stock, and the intergenerational permanency of rail infrastructure projects mean that we can use the tool to make better informed design and purchase decisions.”

Among the benefits of the tool is its ability to definitely demonstrate the benefits of improving road access to modal transfer locations, including the unit cost for stopping multi-combinational vehicles from transiting through built up areas to rail heads.

“We have situations across the country where truck drivers are required to un-hitch trailers on the outskirts of town and make two trips to a transfer goods,” Clancy explained.

“TraNSIT can not only identify unit costs, but the total cost for all product transported through the area, providing valuable information to both industry and councils as to the additional costs being incurred.”

Indeed, recently the TraNSIT has begun to be used by shire councils in northern NSW and southern Queensland to quantify how transport regulatory change and upgrades to roads, rail and other supply-chain infrastructure can boost the efficiency of the transportation of goods.

“Councils often have particular locations that have been earmarked for potential freight hubs,” Higgins said. “For example, the tool can tell us – with given inputs such as location, particular loading facilities and road linkages – what can be benefits of using a potential freight intermodal hub over a road-only system for supply chains of cotton or gains or other commodities,” Higgins said.

The impacts of possible future improvements to rail networks were among the aspects explored by a TraNSIT study conducted by the CSIRO in collaboration with ARTC. It found that some facilities in the southern Queensland and northern NSW regions are limited by train and wagon size.

The study points to improvements that could be made in the future with longer, faster trains with higher capacity and with upgrades to roads that supply grain to these sites, pointing towards better integration between roads and rail. Savings of up to $10 per tonne could be made, it found, by moving from 42-wagon to 76-wagon bulk freight trains with a faster loading time of five hours.

“The TraNSIT tool is being used to look at the areas in which Inland Rail can be beneficial in terms of the overall supply chain versus purely using road,” Higgins said. “We can use it to find out where the biggest benefits will be for industry and supply chains to use the rail corridor.”

Inland Rail

With construction soon to begin on the 1,700-kilometre Inland Rail freight rail line between Brisbane and Melbourne, collaborative work is now underway between the Department of Infrastructure Regional Development and Cities and the CSIRO to explore the use of the TraNSIT model in building an understanding of regional supply chains, helping industry make the most of the project’s opportunities.

Called the Inland Rail Supply Chain Mapping Pilot Project, it will build on previous TraNSIT studies while expanding its application to the future Parkes to Narromine section of the Inland Rail project.

“The Australian government is committed to working with industry and the regions to realise the benefits from the delivery of Inland Rail as it moves towards construction in 2018. This is another step toward delivering this significant investment in Australia’s freight future,” federal transport minister Michael McCormack said.

“The Inland Rail Supply Chain Mapping Pilot Project will be informed by local community leaders and supply chain participants. The Australian government will work closely with state governments and local councils to ensure the project informs planning and freight network strategies.”

The hope is that this application of TraNSIT will further demonstrate how Inland Rail will reduce transportation costs and become a catalyst for further business investment and a subsequent revival in regional rail transport, not only between Melbourne to Brisbane but throughout regional Australia.

“The project will involve taking information about supply chains as they are and mapping them using the future planned Inland Rail corridor,” the CSIRO’s Andrew Higgins said. “It will focus on movements that will use particular parts of the corridor, and it will also look at what the potential is for different types of commodities that currently are transported via road to be put on the rail corridor.”

It will also test the potentials of surrounding, complementary upgrades – such as road improvements – in heightening the benefits of Inland Rail.

A CSIRO/ARTC study into northern NSW’s cotton industry using TraNSIT indicated the enhanced competitiveness of Inland Rail.

The baseline cost of rail transport was calculated at $8.65 million per year or $234/tonne. With the introduction of Inland rail, the rail transport cost reduces to $5.77 million per year or $156/tonne or a potential 33% transport cost reduction.

The ARTC’s Michael Clancy said that TraNSIT could help illuminate the benefits of Inland Rail and the problems it might be able to address via the development of supply chain strategies, especially in a context of continuing difficult climatic conditions throughout regional NSW and Queensland.

“We are currently experiencing one of the worst droughts in history within NSW and Queensland and seeing grain transported from South Australia to Northern NSW in 3000t payloads,” Clancy said.

“Inland Rail will enable +6000t payloads on 1:100 grades. In a normal season where will feed grain be sourced from? Will high grade, high protein, high value wheat still be trucked from the Golden Triangle between Northstar & Weemalah or will it be railed from Victoria direct to feedlots or distribution hubs?

“These are some of the questions that TraNSIT can assist in providing key understandings and with cooperation across industry drive solutions.”

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