harmonisation and productivity in land freight — barriers and solutions

Harmonisation and productivity in land freight — barriers and solutions

Prof Fred AffleckExecutive Director, Planning &

Transport Research Centre

btre colloquium 2007Australian Transport – Policy challenges for Future Growth

www.patrec.orgPlanning and Transport Research Centre

Trucks Trains and Tracks

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Since the origins of organised transport Since the origins of organised transport networks in Australia, capacity and networks in Australia, capacity and

productivity have been hampered by productivity have been hampered by disparate standards and fragmented disparate standards and fragmented

systems. systems.

As harmonisation has gained As harmonisation has gained momentum new systems have emerged momentum new systems have emerged

requiring new reform agendas.requiring new reform agendas.

PATREC

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The causes of dysharmony have The causes of dysharmony have usually been accidental. usually been accidental.

The mistakes began in colonial history The mistakes began in colonial history … … they continue in our federal system.they continue in our federal system.

Fragmented infrastructure ownership Fragmented infrastructure ownership has been a common thread …has been a common thread …

… … reinforced by fragmented regulationreinforced by fragmented regulation

… … in the 21in the 21stst century also by competition. century also by competition.

PATREC

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We are proficient at harmonisation We are proficient at harmonisation through planned cooperative reform.through planned cooperative reform.

Transport has better systems for Transport has better systems for reform than most other sectors. But reform than most other sectors. But we are not proficient in avoiding new we are not proficient in avoiding new

‘accidents’. ‘accidents’.

New technology and new risks are New technology and new risks are the platform for new dysharmony.the platform for new dysharmony.

PATREC

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Harmonising what?Harmonising what?‘‘Vehicle’ mass, dimensions & emissions …Vehicle’ mass, dimensions & emissions …

… prescriptive standards protect infrastructure assets, limit maintenance & external costs and limit risks of harm.

‘‘Track’ & ‘operating envelope’ design …Track’ & ‘operating envelope’ design …… design standards limit cost of providing & maintaining infrastructure & limit risks of harm esp. to third parties.

Control and communications systems …Control and communications systems …… technology, processes & rules constrain & facilitate

movement to limit risks to users & third parties.

Regulation of user behaviours …Regulation of user behaviours …… standards & processes limit risks to users and third parties.

PATREC

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Some examples … past & Some examples … past & presentpresent

PATREC

Rail operating rulesRail operating rulesRail SafeworkingRail Safeworking

SignallingSignallingCommunicationsCommunications

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SignallingSignallingCommunicationsCommunicationsIndustrial awardsIndustrial awards

Track gaugeTrack gauge

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Track gaugeTrack gaugeOutline gaugeOutline gauge

Axle massAxle mass

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Axle massAxle massOHS regulationsOHS regulations

Safety accreditationSafety accreditationThird party access Third party access

Level crossing warrantsLevel crossing warrants

Road rulesRoad rulesVehicle dimensionsVehicle dimensions

Axle massAxle massFatigue regulationFatigue regulationOHS regulationsOHS regulations

Dangerous goodsDangerous goodsUneven enforcementUneven enforcement

Noise emissionsNoise emissionsExhaust emissionsExhaust emissions

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Axle massAxle massOHS regulationsOHS regulations

Safety accreditationSafety accreditationThird party accessThird party access

Level crossing warrants Level crossing warrants Road rulesRoad rules

Vehicle dimensionsVehicle dimensionsAxle massAxle mass

Fatigue regulationFatigue regulationOHS regulationsOHS regulations

Dangerous goodsDangerous goodsNoise emissionsNoise emissions

Exhaust emissionsExhaust emissionsUneven enforcementUneven enforcement

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Where Dysharmony?Where Dysharmony?At interfaces between …At interfaces between …

• StatesStates

• Infrastructure ownersInfrastructure owners(between owners & between modes)(between owners & between modes)

• RegulatorsRegulators(across borders and between domains)(across borders and between domains)

• Competing service providers … Competing service providers … (and between adjacent supply chain service providers)(and between adjacent supply chain service providers)

PATREC

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The costs of dysharmony?The costs of dysharmony?Costs are aggravated when networks cross boundariesCosts are aggravated when networks cross boundaries

Greater operating costs …Greater operating costs …… where multiple standards require duplicate assets,

systems or processes

Greater compliance & transaction costs …Greater compliance & transaction costs …… where multiple jurisdictions / owners require duplicate

regulatory compliance processes

Opportunity costs …Opportunity costs …… where multiple compliance can delay or frustrate response

to commercial opportunities, therefore lose revenue

Reduced network capacity …Reduced network capacity …… where network users are required to use assets conforming

with lowest common standard

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Why does harmonisation Why does harmonisation matter?matter?

Network capacity ...Network capacity ...Network congestion is costly … reducing it by lifting Network congestion is costly … reducing it by lifting

network infrastructure capacity is costly. network infrastructure capacity is costly.

Forecast ‘twice the task’ will require surface transport Forecast ‘twice the task’ will require surface transport networks to double freight carried. networks to double freight carried.

Economic efficiency …Economic efficiency …

Resource consumption …Resource consumption …

Air quality and noise …Air quality and noise …PATREC

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Tackling dysharmonyTackling dysharmonyWe have a mixed record of reform We have a mixed record of reform

to tune out dysharmony … to tune out dysharmony …

Massive change was achieved in the Massive change was achieved in the 20 20thth century … in road and rail century … in road and rail

… … but change is always too slowbut change is always too slow

… … and we persist in creating new dysharmonyand we persist in creating new dysharmony

PATREC

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Challenges for the Future Challenges for the Future • Sustain cooperative reform Sustain cooperative reform

processesprocesses

• Be calculating and strategicBe calculating and strategic

• Reap the benefitsReap the benefits

• Implement and consolidateImplement and consolidate

• Think performance not prescriptionThink performance not prescription- Performance targets benefits- Performance targets benefits

- Prescription targets costs - Prescription targets costs - Pricing links benefits to strategic choices- Pricing links benefits to strategic choices

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Strategies for the 21Strategies for the 21stst CenturyCentury

Fewer infrastructure ownersFewer infrastructure owners

Performance-based regulationPerformance-based regulation

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Pics of why it matters

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Strategies for the 21Strategies for the 21stst CenturyCentury

Fewer infrastructure ownersFewer infrastructure owners

Performance-based regulationPerformance-based regulation

Pricing to promote productive use Pricing to promote productive use of scarce resources and push of scarce resources and push

boundaries of productivityboundaries of productivity

Reform is never over ….Reform is never over ….PATREC

harmonisation and productivity in land freight — barriers and solutions

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