Thursday, 27 December 2012

The 'big' train trap

They were the next big thing for the Australian rail industry in the 1990s - the Superfreighter - vast trains of containers sweeping from one terminal to the next doing with one train crew the work three or four might have done. It was the great cost saver - the godsend to the rail industry. Or was it? What has largely been lost in the Australian 'big train' experiment is the reason for running longer intermodal trains at all. Generally, longer trains should be the result of capacity and congestion between terminals. In Australia, as in the US, the coal and iron industry were the first to embrace the 'big' train. Bigger trains meant a given rail corridor could carry more tonnage. Bigger trains meant longer crossing loops could obviate the need for more expensive duplication. Bigger trains weren't meant to make their individual operating costs lower, they were meant to make more money per train. And then someone decided to translate the rumbling unit coal train into the freight-forwarding business. Multiple daily terminal departures were replaced with just one or two a day. CTC equipped mainlines capable of moving thirty or forty trains a day now see fewer than ten. The 'big' intermodal train didn't resolve capacity issues out on the mainline, instead it saw each train's terminal dwell time increase, it saw contingencies reduced and took away the multiple departure and arrival times customers  used - giving the freight forwarded a single departure time, convenient or not.

This is the cost of the 'big' train. The extra time it takes to unload and load reduces the utilisation of those individual wagons that are the first to be unloaded and the last to be loaded. Say - for example - a 1500m train takes three hours to unload and three hours to reload. If it were two 750m trains, the first could be departing the terminal as the other arrives, maximising rollingstock utilisation and reducing terminal dwell time.   Meanwhile, spreading arrival and departure times across terminal shifts means that instead of paying staff to work flat out for six hours and then kick dirt for the rest of their shifts. It's not rocket science - more frequent/shorter trains spreads terminal workload - in fact terminal congestion may actually be reduced by regular arrivals and departures throughout the day rather than having one or two 'big' trains arriving in the morning and then departing in the evening.

A-ha, you say, but those short trains will need more crews - so that's more cost right? Well, yes, crewing costs would rise, but terminal costs would fall. Mainline capacity is hardly an issue on any of Australia's mainline corridors, in fact most of these corridors retain legacy infrastructure from the days when they did see forty trains a day rather than the current eight. And more trains means more contingencies out on the road. In today's environment an operator's primary freight forwarding train can break down and wait a full day before the next service comes along with spare equipment or capacity. More frequent trains means more choices for  operators to prioritise a recovery.

And then there's the customer. There's almost certainly a percentage of freight now on road simply because rail arrival/departure times don't suit the freight forwarder - running those two 750m trains could mean could actually mean a third 750m train with a third departure time. Crew costs are one thing, but working out whether that's the cost a rail operator should worry about it quite another. The simple fact is, if your 'big train' isn't preventing a capacity crunch on the mainline, then it's costing you business rather than making you money.

Of course, the elephant in the room is the 'slot pricing' rail infrastructure providers expose rail operators to. Once again, the good old 'slot' rewards rail operators who run less trains. Do investors really want to hear - "We don't want growth because it costs us money" - somehow I don't think so. Perhaps now is the time for someone to find a way around 'slots' rather than just being another victim of them.

   Check out my latest Christmas e-book releases

No comments:

Post a Comment