Twice the Task

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Twice the Task

• National Transport Commission

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NTC Co-operative federalism

• Independent of government and industry
• Deliver consistent national reform outcomes
• Reports direct to Transport Ministers
• But often lacks genuine national outcomes

3
Twice the freight task

• Land transport task to double (2000 2020)
• 1 in 4 vehicles in our cities carrying freight
  by 2020
• Optimise the network, not one mode or company
• Do nothing is not an option

road freight (billion t-km)
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Integrated reform approach

• Flexible regulation (PBS)
• Direct pricing reform
• Nationally coordinated infrastructure planning
• Compliance technology (IAP)
• Co-operative regulation
• Pro-active implementation
• Supply chain collaboration

flexible regulation
optimal pricing
infrastructure planning
Compliance technology
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Aligned to COAG reform agenda

• COAG Reform Council to report on reform
  progress, which includes
• Performance-based regulation
• a nationally agreed process for assessing the
  access of innovative vehicles to the road system
  (which) has the potential to increase
  productivity
• Road-rail efficient pricing
• NTC Future Pricing project to feed into
  Productivity Commission review (end 2006)
• Intelligent Access Project
• Harmonisation of road and rail regulation
• Rest area audit and construction to new
  guidelines
• Review rail safety regulation

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Productivity gains diminished

• PRODUCTIVITY
• Inconsistent implementation of HML Review
• Four years to agree on 26 metre B-doubles, with
  NO productivity benefit
• Limited scope for further mass reviews under
  prescriptive system

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Limitations in the transport system
Volume constrained
Mass constrained
Interface capacity constraints
Volume constrained
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Optimising the transport network
50t GCM quad for heavy containers
25 more pallet space
40 more pallet space
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and/or going modular
Pick-up
Long haul
Delivery
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HOW? More flexible vehicle regulation

• What the vehicle looks like

• What the vehicle can do

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Performance Measures - Safety
Low Speed
High Speed

• Startability 4. Overtaking Time
• Gradeability 5. Tracking Ability on a
  Straight Path
• 3. Acceleration Capability 6. Ride Quality

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Performance Measures - Safety
Low Speed
High Speed

• Low Speed Swept Path
• Frontal Swing
• Tail Swing
• Steer Tyre Friction Demand
• Static Rollover Threshold

• Rearward Amplification
• High Speed Transient Off-tracking
• Yaw Damping
• Handling Quality
• Braking Stability

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Performance Measures - Infrastructure
Pavements
Bridges

• Pavement Vertical Loading
• Pavement Horizontal Loading
• Tyre Contact Pressure Distribution

• Bridge Loading

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Matching trucks and roads
Level 1
Vehicle performance
Better performance increased access to the road
network
Level 2
Level 3
Level 4
Access to road network
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Ensure environment and amenity protected

• Operators of SMART trucks required to comply
  with
• best practice environmental standards
• NHVAS mass management
• NHVAS maintenance
• Operating conditions

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Innovation outside the rules
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Inconsistent state permit system (FCL)
NIL
Quad
546 Container
NIL
NIL
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Logistics operators wantproductivity for
customers and accountability from government
Greg Gibbins, Director, FCL
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Incremental pricing to support PBS

• Opportunity to buy extra payload and access
  rights
• Compensate road owners for increased road wear
• Linked to PBS to ensure higher mass vehicles
  perform safely

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IAP route compliance tools

• Increase network access for more productive
  trucks
• Protect vulnerable roads and bridges (avoids
  lowest common denominator)

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Infrastructure planning

• AusLink commended
• Need a national body to plan and co-ordinate
  infrastructure planning
• Review of outdated road and rail design standards

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Co-operative regulation
with the pursuit of more cooperative forms of
regulation, industry is empowered with greater
discretion (and an) increase in responsibility
for outcomes (NTC, Feb 2006)

• Shared role in regulation
• Model used for rail safety
• Based on accreditation, CoP, guidelines
• Focus enforcement on others
• BUT must reduce the trust gap

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National consistency
Governments should consider whether the
multiplicity of regulators and fragmentation of
the regulatory system is in Australias long run
interest (Exports Infrastructure Taskforce, May
2005)

• NTC Rail Safety Reform Bill improves national
  consistency
• Potential to move toward national rail safety
  regulation

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Proactive implementation

• enhanced implementation mechanisms
• progressive implementation (using lead agencies)?
• improved evidence of benefits
• eg IAP trials in Tasmania, PBS roadtrains in QLD

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Collaboration
Many opportunities for efficiency gains in
freight arrangements are at the boundaries
between modes and where one company hands over
responsibility to the next in the supply chain.
Twice the Task

• Hunter Valley coal chain
• Regulatory balance to permit productivity,
  without undermining competition

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Productivity Commission Freight Infrastructure
Pricing Inquiry

• The vote on the National Transport Commissions
  Third Determination provides recent evidence, if
  such were needed, that road pricing is
  politically sensitive. That is a reality, but we
  should not let it faze us. Australia is not
  unaccustomed to implementing politically
  difficult, but economically beneficial reforms.
• Gary Banks, Chairman,
  Productivity Commission

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Pricing for overall cost recovery

• Blunt tool, unsophisticated, based on averaging
  and aggregates
• Sub-optimal mode, vehicle and route choices
• Infrastructure investment by popular vote

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Competitive neutrality is Claytons debate
Source Derived from BTRE, ARTC Data

• only 9 freight task contestible
• rail infrastructure /service quality is biggest
  issue
• consistent pricing principles to optimise
  infrastructure investment

Scale
10
5
4
3
2
1
Million tonnes per year
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Externalities managed by regulation
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Consistent pricing principles across modes

• Full cost recovery with no cross subsidies
• Optimisation of existing networks
• Incentives for optimal infrastructure investment
• Improved access to the network
• National social policy for project evaluation and
  CSOs

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Direct pricing for productivity

• Improve link between asset use and infrastructure
  expenditure

• Remove barriers to improved access for productive
  trucks

• Pricing signals inform optimal freight network
  improvements

• Encourage lowest cost distribution networks

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Regional and rural equity
PRICE
SIGNAL
Low traffic road
Divert
CSO
Upgrade
Regional road on export route
Maintain/ upgrade
Dedicated (purpose built) freight route

• Regional equity best addressed by specific CSOs
• Pricing signal to upgrade key regional/arterial
  freight routes

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Some institutional challenges ahead

• National and binding PBS decision-making
  framework
• Improved link between pricing and asset investment

OR
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www.ntc.gov.au