Rail Directions Workshop: ARTC

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John Fullerton from the ARTC delivered a presentation at our Rail Directions workshop in March 2012.

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Rail Directions Workshop: ARTC

  1. 1. Rail ChallengesRail Research DirectionsMarch 2012EnterFullertonJohn nameEnter Executive OfficerChief job title ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  2. 2. This Presentation 1. ARTC Background 2. ARTC Business Strategy 3. Key Challenges 4. Imperatives for Success 5. Summary20/08/2012 ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 2
  3. 3. Business Snapshot• ARTC established in 1998 as a rail track infrastructure business owning and operating the interstate rail network in SA• Over past 10 years has progressively expanded network to include the majority of the interstate network under long term lease arrangements. This includes the Hunter Valley coal network• Owns or leases over 8,500 route km of track• Corporations Law Company with 100% of shares owned by the Australian Government• Charges access fees to train operators and other customers for use of the rail Brisbane network Perth ARTC Network Sydney Adelaide Melbourne ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 3
  4. 4. ARTC Business Network Primarily supports coal transport Hunter Valley: Brisbane Increase capacity to meet port allocations & domestic coal requirementsPerth Interstate Network – East West: Increase rail volume above Sydney economic growth Adelaide Melbourne Primarily supports general freight Interstate Network – North South: transport Increase rail volumes through significant growth in rail’s share of freight transport market ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  5. 5. Business StructureTotal staff : 830 employeesTotal FY11 revenue : $652 million ARTC HUNTER VALLEY INTERSTATE Provision of network Provision of networkservices to support coal services to support delivery and other general freight delivery commodities on the and other commodities on Hunter Valley rail the interstate rail network network1336 route kilometres 6175 route kilometresAccess revenue $280m Access revenue $254m ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  6. 6. Interstate Network: East West Corridor• East-West corridor is a vital logistics connection to and from WA• Mature market characterised by high rail share• Rail largely meets market requirements on this corridor• More than competitive with road• Transit times are oriented around a late evening cut off in Melbourne for an early morning arrival in Perth B ris ban• Total Major Works - $1.3 Billion e 19% (S-B) Perth 81% (E-W) Sydney Adelaide ARTC Network (With rail share of the land transport market) Melbourne 11% (M-S) ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  7. 7. Interstate Network: North South Corridor• Significant market opportunity but corridor has seen a steady erosion of rail’s market share since 1960’s• ARTC initiated an improvement strategy in 2004 following 30 years of under-investment along this corridor• Objective in taking up the NSW and standard gauge Qld network was to create opportunity to turn around rail’s competitiveness by focusing on transit time, reliability and capacity improvement (Rail share of• Total Major Works - $2.8 Billion land transport Brisbane market) <10% (S-B) Perth Parkes Sydney Adelaide 24% (M-B) Melbourne <10% (M-S) 1 ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  8. 8. Hunter Valley• Latest ARTC strategy the 2011 – 2020 Hunter Valley Corridor Capacity Strategy has been released and is the fifth edition• Coal volumes expected to double over the next 5 years from 100 mtpa to >200 mtpa. Beyond that Terminal 4• Strategy is designed to ensure capacity is kept ahead of contractual demand• Future network infrastructure investment value in excess of $800 million (excluding T4)• HV Coal Chain Coordinating (HVCCC) group represents all participants in the coal supply chain to ensure optimal performance• New ACCC Access Undertaking effective from July 2011 ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 8
  9. 9. ARTC Business Strategy• Provide safe, seamless and efficient access to users of the rail network• Pursue a growth strategy for interstate rail through improved efficiency, reliability and competitiveness• Seek to keep network capacity ahead of demand• Improve the rail network through better asset management, capital investment and technological improvement• Develop a customer service culture and work in partnership with industry participants including end users, freight logistics companies, train operators and other stakeholders to position rail as a vital and valued component of the transport supply chain ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN
  10. 10. Commodity Mix Revenue (% )100.0% 4.9% 5.5% 7.2% 7.7% 7.3% 7.1% 80.0% 60.0% 45.6% 47.5% 40.0% 20.0% 34.5% 32.8% 0.0% 2009/10 2010/11 Intermodal Coal Steel Bulk Passenger ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 10
  11. 11. Interstate Network: Corridor Intermodal Freight UsersThe table below illustrates current rail corridor users - North South East West Pacific National x xRail Operator QR National x x SCT Logistics x Freightliner x Toll Group ^ x Linfox ^ x Sadliers Transport ^ xFreight Forwarder K&S Corporation ^ x Simon National Carriers x Rand Refrigerated x Ron Finemore Transport ^ TNT ^ x Woolworths ^ x AMCOR x Lion Nathan x Coles ^ x Fonterra ^ x Colgate Palmolive xEnd User Coca-Cola Amatil x Murray Goulburn ^ Fosters ^ x BlueScope X x Bunnings ^ x Toyota ^ x Holden ^ x ^ - Part TimeARTC, A Rail Users Opportunity STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN X – Regular Rail Users
  12. 12. Interstate Network: The North South Problem• Road infrastructure on North South corridor has been vastly superior to rail reflecting the disparity in the levels of past investment and corridor alignment between the modes• Transit time and reliability has heavily favoured road in a market where reliability seems to be the dominant factor of choice• Sydney metropolitan bottleneck severely impacts rail’s ability to deliver• Rail has had insufficient network capacity at market preferred times• Road is considered more convenient to use and is perceived to be more flexible, innovative and customer friendly• Access to rail infrastructure and terminal facilities is considered a major constraint in using rail• Price differentials between road and rail not well understood ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 12
  13. 13. Interstate Network: Overview of Rail Challenges• Rail is not considered the land transport mode of first choice for high volume intermodal freight in many parts of Australia on many corridors despite rail’s inherent advantages – policy failure• Rail needs to play a bigger role in an expanding transport market to drive national productivity improvement, increase our international competitiveness and drive growth in our economy The fact is the 21st century will deliver increasing population, environmentally conscious governments, communities and business, and a desire and need to raise living standards through increased national productivity, competiveness and efficiency• Investment in intermodal infrastructure, introduction of new technology, productivity improvement, ongoing regulatory and policy reform must continue to allow the most efficient and least polluting means of transport to continue its development. ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 13
  14. 14. The Five Imperatives for Intermodal RailImperative 1 Deliver Network Performance • Safe  Investment  Condition monitoring • Reliable HOW  Analysis • Cost effective  Optimisation • Efficient  Continuous improvementImperative 2 Become an active and informed member of customer supply chains • Focus on the customer and improve service • Understand customer needs and rail’s impact on supply chains • Present as a unified transport mode (freight forwarder, train operator, track owner) • Strive for continuous improvement  Analysing customer needs  Supply chain costing across modes HOW  Performance standards  Operational coordination  Inventory control ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 14
  15. 15. The Five Imperatives for Intermodal RailImperative 3 Become hard-wired to the supply chain through effective linkages and integration • Develop intermodal terminal precincts characterised by efficient train loading and unloading facilities, adjacent warehousing and distribution centres and nearby access to rail and freeway corridors • Deployment and integration of advanced technology • Make rail more convenient and easier to use • Sell the benefits  Future land use planning and development  Joint road and rail infrastructure planning HOW  Common user intermodal terminals  Integration of technology  Freight consignment tracking ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 15
  16. 16. The Five Imperatives for Intermodal RailImperative 4 Attract and retain the best people • Make rail an employer of choice in the transport sector to drive performance improvementImperative 5 Regulatory and Policy Reform • Strive to achieve competitive neutrality between road and rail infrastructure to foster optimal investment programs across transport modes – value for transport investment dollar • Reduce the regulatory burden • Promote the environmental, social and productivity advantages of rail as economic advantages and stimulants  Single regulator models  Common standards  Incentives for using low carbon transport modes HOW  Recognition that road congestion and safety are economic impediments and that alternatives should be actively promoted through policy decisions ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 16
  17. 17. Intermodal Terminals There is evidence of a strong need for substantially increased Darwin intermodal terminal capacity in the capital cities, especially Sydney & Melbourne There is a need for an effective interface between road & rail at Alice Springs critical locations to ensure supply chain efficiency Brisbane Brisbane (Bromelton) Tarcoola Kalgoorlie Broken Hill Werris Creek Pt Augusta Perth Whyalla Crystal Brook Kwinana Parkes Sydney Newcastle Sydney Adelaide Cootamundra (Moorebank) Macarthur Port Kembla Albury Wolseley Melbourne (Western Geelong Melbourne Melbourne)Whilst there are private intermodal terminals inAustralia, including some owned by the major railtransport operators, governments need to develop aposition on the location, ownership & operation of thefuture network of multi-user intermodal terminals ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 17 (National Land Freight Strategy, Feb 2011)
  18. 18. Summary• There are significant growth prospects for rail with large potential on the North South corridor • ARTC North South investment program will deliver significant improvements • Improving reliability is key • New focus on growth, business development and industry cooperation• In the Hunter Valley, challenge is to keep capacity ahead of rapidly growing demand• Increased intermodal terminal capacity is vital to meet future growth demands• Safety performance is a key challenge• ARTC and the rest of the industry need to enhance and maintain a customer focus, and work collaboratively to meet customer needs ARTC, A STRONG, EFFICIENT, SUSTAINABLE RAIL LINK IN THE NATIONAL LOGISTICS CHAIN 18

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