Will trucks or trains absorb future freight growth?

A short post by Bob Murphy at Business Spectator suggests that larger trucks will absorb freight growth in Australia providing the big rigs have adequate road infrastructure and defined routes to haul massive loads. Mr Murphy sites the fact that road networks have more coverage than rail networks and that trucks pay their own way (unlike rail) and concludes that larger trucks will win over rail in the future.

What about factoring in the price of fuel and that rail is more efficient than road on a tonne per kilometer basis? Road may be winning now but rail will surely reassert itself when fuel prices increase again. I suspect the Federal Government knew this when they announced a $1.2 billion investment in Australian Rail Track Corporation in December 2008 as part of the $4.7 billion Nation Building Package.

Whatever the reason for the investment in Australian Rail Track Corporation it seems obvious that road and rail will continue to share Australia’s freight haulage duties. The percentage carried by each will depend on how efficient they use fuel. When taken in this context trucks do seem to have an advantage in that some trucking companies are using LNG and CNG to reduce their fuel costs and emissions. However,in the two years that I’ve been writing on Envirofuel I’ve never heard of Australian freight train operators investigating alternative fuels. I hope that is because I haven’t been listening in the right places rather than complacency in the rail world.

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3 Responses

  1. Interesting he mentions having sufficient road infrastructure and then says trucks pay their own way. Does he really believe trucks pay for the roads they use? It is the tax payer that bears that cost. Rail infrastructure is also paid for by tax payers but the rail operators pay a higher price to use that infrastructure. Unfortunately there isn’t a level playing field for rail and road transport.

    • Jim, the National Transport Commission sets truck charges to recover the costs they impose on the road network.
      That is roughly 20c per litre of fuel plus registration charges.
      The Bureau of Transport and Regional Economics, the Productivity Commission and the National Transport Commission all agree that trucks, in aggregate pay their way.
      The rail network simply does not with the notable exception of the coal lines.
      You need to do your homework, Jim. The information is freely available. Google is your friend.

  2. Jim, I forgot to add that the National Transport Commission, the Productivity Commission, the Bureau of Infrastructure Transport and Regional Ecnomics and the Council of Australian Governments have all states that only 13-15% of non-bulk land freight is “contestable” between rail and road.
    The Productivity Commission found that even sizeable changes in freight rates would not cause a significant modal shift between road and rail.
    And I wonder if you know that almost all non-bulk rail freight gets to and from the trains by truck. Since our worst road congestion is in the cities that means rail is no real solution to urban congestion.

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