Monday, 22 October 2012
Express freight - lost potential?
If you've ever bought something over the Internet and you live in the US, then there's a reasonable chance that product travelled by rail for some or most of its journey. That same package in Australia is almost certainly going to stay in a truck from the point of purchase all the way to your front door. For several reasons Australian rail operators have largely missed the boat when it comes to express freight delivery. And it's not as though this is some flash in the pan thing...Internet purchasing is likely to completely change the movement of domestic freight, with container loads to large chain stores giving way to more personalised freight delivery. So why are Australian rail operators allowing the likes of Australia Post, TNT and DHL to dominate a business they are making little attempt to enter? After all, this is the next big thing in Australian freight, and so far it's been almost completely missed.
Obviously the express nature of the package delivery business is a negative to rail. Overnight road delivery via road is possible between Adelaide and Melbourne, Melbourne and Sydney, Sydney to Brisbane. Rail simply can't offer this. Underlying factors include government-controlled rail-corridor owners more interested in saving money than offering reliable or road competitive rail structures. However rail operators have to take some of the blame too. They have made no attempt to improve service reliability or transit times by paying for corridor improvements, and they prefer to run their trains to maximum length and minimum horsepower to avoid having to buy more slots from the corridor owner. But then, maybe senior rail managers haven't taken a good look at just how long that package they ordered took to arrive.
Most Internet or phone purchases aren't completely time reliant...sure some have to absolutely be there overnight, but many can just be expected to arrive within a few days...and many do. Express parcel delivery between Sydney and Townsville is frequently five-working days. A rail delivered container could potentially travel that same route in four. Suddenly it looks like rail could compete, even in the capital city corridors, providing next day or second day delivery suited the express freight handler.
However train speed is one thing, what about the dislocation of the the express freight handler and the nearest rail terminal? Face it, rail has been out of this business for a long time, so with road dominating most of the big distribution centres are near highways rather than railways. How can rail woo express? This might be the time revisit the 'Roadrailer' concept. They've been successful both on narrow and standard gauge but have suffered from having no clear vision of their purpose. We know they provide less terminal dwell time and are able to move to multiple destinations from a single departure point. Roadrailer trailers are also cheaper to purchase than traditional rollingstock and require less horsepower per train to move. All in all these could tick enough boxes to offer rail a budget entry into the express business. But who should buy them? I can't see the likes of DHL or TNT rushing out to buy roadrailers just because an operator wants to haul them. Instead, interested rail operators will pretty much have to start buying a new generation of hi-cube dry trailers themselves. After that they can lease them to any express freight handler rather than being locked into some sort of exclusive contract. Money is money and trailers are trailers, whether they go on rail or not, they mean new business for a rail operator. Sure this is a tentative step, but it has to start somewhere - ignoring this freight type would be like QRN and PN ignoring the last coal boom - we all know they didn't do that, so why ignore express freight?