0 Intermodal Terminals: The Policy Issues Presentation to BTRE Colloquium Canberra June 14-15, 2006

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Intermodal Terminals:The Policy Issues

Presentation to BTRE ColloquiumCanberraJune 14-15, 2006

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Intermodal Terminals – the policy issues

Overview of the paper

The intermodal system

– structure

– current task

– future challenges

Thinking about intermodal policy

Putting a coherent package together

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Role of the IMT

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System or Systems?

The inter-state system

The import/export system

The intra-state regional system

In Australia, there are two – or possibly three – intermodal systems that interact to some extent but are largely, and I think increasingly, distinct systems

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Domestic System

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Rail volumes and share by origin/destination

0

2,000

4,000

6,000

8,000

10,000

12,000

Syd - Perth Melb - Perth Melb - Syd Bris - Syd Melb - Bris Adel - Melb Syd-Ade Ade-Per

00

0 t

on

ne

s/y

ea

r

Rail Road

Source: Derived from BTRE WP66; ARTC 2005; Report 112

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Volumes by Freight Corridor

10 5 4 3 2 1

Million tonnes per year

Scale

Road

Rail

Source: Derived from BTRE, ARTC Data

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Future long-distance non-bulk rail freight

Not a given…….

Based on ARA Future of Freight, 2005

0.00 2.00 4.00 6.00 8.00 10.00 12.00

Melbourne-Brisbane

Sydney-Brisbane

Melbourne-Sydney

Melbourne-Adelaide

Melbourne-Perth

Adelaide-Perth

Sydney-Perth

billion ntk

Current Growth ARA: With rail reforms

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Import/Export System

MIST

Villawood

Yennora

Camellia

Cooks Rivers(St Peters)

SYDNEY URBAN NETWORK

Source: National Intermodal Terminal Study

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International containers – major ports

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

2005 2010 2015 2020

Year

mill

ion

TE

U

Melbourne Sydney Brisbane Fremantle Adelaide

Source: Meyrick: National Intermodal Terminal Study

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Meeting proclaimed targets

Port-oriented rail volumes

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Melbourne Sydney Brisbane Fremantle Adelaide

m T

EU

2005 2020

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ImplicationsSPECIFIC

Total increase in required in terminal capacity between 100% and 300% over the next 15 years

Require redevelopment/extension of most major inter-State nodes

Extent of development of additional terminals for domestic market will depend on market structure

Need for additional import/export IMTs ,especially but not exclusively in Sydney

Pressure on terminal space will aggravate access issues

GENERAL

IMTs will play a pivotal role, but can only be talked about sensibly as an element of the freight infrastructure network

Meeting future freight infrastructure demands will be a major challenge, especially in urban centres

Lots and lots of government money is going to be spent on meeting this challenge

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Towards a comprehensive approach to IMT policy

What is the role of government in a sector that is (largely) privately owned and operated?

Project facilitation

Infrastructure Access regulation

Skill development

Funding

Land banking

Planning

Pricing

Information

Policy clarity

Technical regulation

Core role Possible roleContributing role

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Policy – some definitions

A line of argument rationalizing the course of action of a government wordnet.princeton.edu

A policy is a plan of action to guide decisions and actions.... Policies in short can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals. Wikipedia

Rationalise: 1. To invent a rational,

acceptable explanation for behaviour which has its origin

in the unconscious8. To justify one’s behaviour by

plausible reasons Macquarie Dictionary

A plan or course of action, as of a government, political party, or business, intended to influence and determine decisions, actions, and other matters. World Bank (youthink)

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The public image of the freight transport system

Intermodal policy is policy – and therefore it is going to be political

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Modal shift objectives as policy

Most governments have set mode share objectives for freight

Typically these apply only to import/exports movements

There does not appear to be much foundation for the specific targets

More than a pious hope than a policy:

– a target without an objective

– a goal without a strategy

Coherently articulate the objectives of the policy

Clearly present the specific outcomes that are expected

Define the steps that will be taken to deliver these outcomes

An adequate intermodal policy will need to do (at least) three things:

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Planning

THREE MAJOR CHALLENGES FOR INTERMODAL SYSTEMS PLANNING

DEFINING THE APPROPRIATE SCOPE

AND LIMITS OF PLANNING

RECONCILING THE PLANNING

OBJECTIVES OF DIFFERENT LEVELS OF

GOVERNMENT

MOVING BEYOND PLATITUDES TO PLANS

AND BEYOND CONCEPTS TO

COMMITMENTS

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IMTs and TDL clusters

Industrial clustering

in/around IMT

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Sydney Ports Enfield Plan (Cycle 2)

Warehouses for unpacking/packing

Some light industry, commercial activity

Container storage & recycling

Warehouses for unpacking/packing

Some light industry, commercial activity

Container storage & recyclingContainer storageand repair

Deconsolidation/warehousing

Associated light industry

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Information

Widespread acknowledgement of the need for coordination and integration

In reality, powerful players are reluctant to release information–Commercial confidentiality

–Legal concerns

–Just had enough

Costs–Lower quality of public decision making

–Higher information search costs

Voluntary approach advocated in NTDF report appears doomed

Regulatory requirements to disclose information exist elsewhere

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Technical Regulation

For most intermodal movements, a road leg will always be part of the journey

Pick up and set down costs are often a significant part of the total intermodal transport cost

Providing special mass or dimensions concessions on specific routes to/from intermodal terminals can help to reduce this burden

In France, heavy vehicles travelling to intermodal facilities are permitted to carry heavier loads than under prescribed limits applicable to general movements.

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Project facilitation

Some progress– ‘Exports and Infrastructure Taskforce’ advocated ‘one stop shop’ approach for

major projects

– COAG accepted this in principle at June 2005 meeting

– Most jurisdictions are moving or have moved to set up something along these lines

BUT

The old problem – moving from principle to practice

Yet to see how this works for an integrated system or network of projects

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Infrastructure

Road Rail TerminalAccess to freeways/ high stand arterials

Avoidance of congestion

Access for high productivity vehicles

Track quality

Track capacity

Access to network

Access to train paths

Adequate siding length

Sufficient paved working areas

Services access

Integration

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PricingGovernment has direct control only over pricing of access to the road network

Government influences pricing of rail infrastructure through regulatory regimes

Current pricing issues:

– mass-distance charging

– congestion pricing

– pricing for externalities

– levies to achieve specific outcomes

All of these are economically unexceptionable

A bit trickier

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Access regulation

Always a two-edged sword– risk of discouraging investment

– need to preserve opportunities for innovation

Two access issues:– Access to the terminal

– Access to the network

Lots of smoke – probably some fire

Att

ract

iven

ess

of t

erm

inal

as

inve

stm

ent

Feasibility of duplication

Increasing case for in

tervening to

secure multi-p

arty access

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Land Banking

Government often holds the most attractive sites

Differences between public and private:

– time preference rates

– scope of benefits captured

Government has access to instruments that private sector does not

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Skills development

Shortage of skilled and even semi-skilled labour an across-the-board issue for transport.

Labour needs of simple IMT are modest

Access to labour and skills in sufficient quantity can be key to the success of more complex IMTs:

–especially the more ambitious ones on the Freight Village model

–Regional areas

Management skills can also be a problem

Skills problems also in public sector

–The retreat of government

–Rapid staff turnover

–Institutional instability

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Funding

How?

Subsidised loans

Land purchase and lease back

Operating Grant Schemes

Capital Grant Schemes

When?

Commercially viable terminals

Hard to see justification

Marginally viable IMTs

Development assistance?

Non-commercial IMTs

Ongoing assistance (but you’d have to have a very good reason in terms of the rest of the network)

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Concluding remarks

The title is wrong – the issue is intermodal policy, not intermodal TERMINAL policy

Governments are going to spend a heap of money on freight infrastructure, and are therefore going to have policies – the only choice is whether we have coherent or incoherent ones

The objectives of intermodal policy are not going to be purely economic – but we should be working hard to make that the strategies for achieving them are economically sensible

The less time we spend on road v rail spats, and the more we spend on thinking about how best to integrate the two, the better off we are all going to be

Documents

0 Intermodal Terminals: The Policy Issues Presentation to BTRE Colloquium Canberra June 14-15, 2006