Woolworths says it would happily transfer more of its freight from road to rail if there was an inland Melbourne-Brisbane line, but the supermarket giant isn’t convinced that customers would give it any credit for the shift.
Support from Woolworths would provide a useful fillip for the glacial process of getting the much-discussed east coast rail link actually happening and reducing our national dependency on road freight. Ultimately, that depends on a bunch of regulatory processes where the outcome is anything but clear, but backing from Australia’s biggest retailer certainly wouldn’t hurt.
Speaking on a panel at the annual Ausrail rail industry conference in Perth, Woolworths’ transport strategy manager Ben Newton took issue with the suggestion that Woolies wasn’t doing its bit to utilise rail. Around 20% of Woolworths’ freight goes on trains, he said, and it would like to increase that, if only to avoid any future price increases for road freight: “We’ve been pretty vocal that we have an intention to use more. We can see the writing on the role in terms of road pricing and carbon tax.”
The most appealing route for Woolworths is Melbourne to Brisbane. “That is the longest corridor we don’t have on rail,” Newton said. While that route is at least in theory already covered by two separate rail lines connected in Sydney, Wooworths would prefer the alternative of a single inland standard-gauge route. “We’re not in a position where we’ve got absolute confidence in the infrastructure,” he added dryly.
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Like most supermarket retailers, Woolworths relies on just-in-time supply models, and any unexpected delays often have a ripple effect. “If we do put it on rail and for whatever reason we have a day’s delay, that’s going to mean products not on shelves, especially in Brisbane with some slow moving lines,” Newton said. “Any out of stocks [customers] definitely notice.”
A direct Melbourne-Brisbane rail link would remove 300 Woolworths semi-trailers a week from the roads, Newton estimates. Ask any driver stuck on the Pacific Highway if they’d like to see freight shifted onto rail and they’ll almost certainly say yes.
However, Newtown thinks that the ongoing care factor is low in practice and that any shift won’t be noticed fickle grocery buyers. Asked if customers cared about how goods were delivered, he was direct: “If [a reduction in trucks] become noticeable they might appreciate it, but in reality no.”
Woolworths and other freight-dependent companies already have to deal with truck bans imposed by local councils, which often restrict delivery hours to minimise night noise and, Newton argues, increase traffic congestion. “There’s plenty of examples through all the major capital cities where we’ve got restricted deliveries. A lot of those curfews force us to be on the road in peak hour.”
But a shift to rail won’t help with that either. “Our focus on rail is really the interstate intermodal market,” Newton said. “The metropolitan distribution piece is really very separate and we don’t see that much of an overlap.” In other words, Woolworths really likes its trucks.
A rail conference provides plenty of evidence that Australia, like Woolworths, is still in the grips of automotive addiction. We’re the only OECD member country where car sales and investment in freeway building is growing.
A recurrent grumble at Ausrail was that rail users are charged for infrastructure and rail network operators are expected to turn a profit, while national highways are essentially free for truck freight companies to use and there’s no expectation of profitability from the roads themselves (save for the often disastrous urban private motorway sector).
“Our current system of road charges must change so that road and rail can compete on a level playing field,” said David Marchant, CEO of Australian Rail Track Corporation — a theme the railway industry has been hammering for years. It estimates 30% of the cost of rail freight comes from network access costs, compared to less than 5% for road freight.
The big problem is that our pre-Federation history of separate and incompatible state rail networks continues to haunt the nation, despite attempts during the 1990s to standardise the main routes. There are currently seven different railway safety regulators, for instance. A project is under way at the National Transport Commission to consolidate those, but that won’t happen before 2013 at the earliest, and will require agreement from every single mainland state.
Infrastructure Australia CEO Michael Deegan was blunt in his assessment of the sloth involved in discussion so far. “I don’t see that progressing anywhere near the pace that’s required,” he said during the conference. “There needs to be some sense of urgency about changing these things.”
Colonial history has condemned us to discussion over action, he suggested: “In transport, we just don’t seem to get much done.” Meanwhile, the trucks just keep on trucking, for Woolies and everyone else.