economic characteristics of road and rail freight transport infrastructure

FreightSoftware and hardware

AusIntermodal Conference

31 October 2012

2 Freight: hardware and software © 2012 Deloitte Access Economics Pty Ltd

Introduction

• Economic megatrends will affect transport

• How we organise our cities should be seen as an

area of microeconomic reform

• Transport is fundamental to cities’ economies

• Transport policy:

– Software

– Hardware


An example of software and hardware

• Competition reform in energy

– A change to software

• Allowed large productivity gains

• These took us through 20 years

– Now moving into a time of hardware investment


Transport software and hardware

• Important transport decisions

• Largely controlled by Cabinets

• Software improvements could be

beneficial

• Long term need to focus on

transport strategy


Megatrends and transport

Continued growth of Asia ICT

Climate changePopulation pressures


The size of our cities

16

227

7

111

Population (m)

GDP ($bn)

8 major cities Other


The shape of our citiesSydney Brisbane

1991

2011

Source: chartingtransport.com


The challenge of cities

0

2

4

6

8

0 1 2 3 4 5 6

Congestion cost ($/trip)

Population (m)

Policy responses

software and hardware


Road & Rail – Metropolitan Sydney

-30

-20

-10

0

10

20

30

40

50

0.7m 1.4m 2.2m 3.9m 7.0m

Cost differential ($)/TEU

Port throughput (TEU)

Rail volumes grow 25% faster

Base Case

+ Externality differential

Forecast Historical

Estimated road and rail cost differential, SydneyR

ail

ch

ea

pe

rR

oa

d c

he

ap

er


Software – PBLIS in Sydney

0% 20% 40% 60% 80% 100%

2010-11

2009-10

2008-09

2007-08

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-00

1998-99

1997-98

Rail RoadTEU

Mode share at Port Botany


Software – PBLIS in Sydney

Volumes through Port Botany

0 50 100 150

0.0

00

0.0

05

0.0

10

0.0

15

0.0

20

0.0

25

Distribution of TTT

TTT (minutes)

De

nsi

ty

PBLIS

Trial

Average PBLIS

Average Trial


Software – technology

Optimisation of truck routes Improving traffic signals

Congestion cost saving of

$244m a year in NSW

Cost saving of $730m a year in Australia

GDP: $7.3bn in period to 2021 (NPV)


Road & Rail – around Australia

0%

25%

50%

75%

100%

0 1750 3500

Rail

Road

Mode share

Haul (km)

North-south East-west

Source: BITRE report 120


Hardware – a freight line

• Inland rail is not economically

feasible (for now)

• The Sydney problem

• Improving Sydney could help the

city and the east coast freight

network

S

B

M

Road only

Road and rail


Summary

• Economic megatrends will affect transport

• How we organise our cities should be seen as an

area of microeconomic reform

• Transport is fundamental to cities’ economies

• Transport policy:

– Software

– Hardware

General information only

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