Trains And Boats And Planes .. And Costs
Sydney Morning Herald
Monday September 21, 1992
EVERY year trains, trucks, ships and planes carry 1.5 billion tonnes of freight around Australia - equivalent to moving 23,000 gigantic passenger liners the size of the QE2.
In a country as vast as Australia, where many items often need to be transported long distances, whether they be vegetables for consumption in Sydney or Australian coal destined to be loaded for export to Japan, the costs of transport affects everyone. Transport costs may well determine the future of jobs in the Hunter coal fields, just as the same costs affect farm incomes and the profits of factories.
Australia's State and Federal governments have become increasingly aware, during the period of the economic downturn, of the importance of saving money by improving the nation's transport systems. Such savings will benefit our farming and manufacturing export industries by helping them better to take on their international competitors in world markets; in other words, to make them more efficient.
Cutting the costs of transport systems through more efficient work practices and new technology is equally important for State governments, which are all wrestling with ever-tighter budget constraints.
Consider the importance of transport costs in our daily lives. In every dollar they spend on consumption, most Australian households spend about 14 cents on transport.
Transport takes an even larger share - about 30 per cent - of spending on public works by State governments, mostly on roads, but also on railways and ports.
In the past 20 years in Australia trucking companies have increased their share of the country's transport task. At least 77 per cent of freight moved internally goes on the back of trucks and only about 20 per cent moves in railway wagons.
So, changing the manner in which the trucking industry operates, to cut truckers' costs, is of paramount importance for the Federal Government.
One of the biggest problems facing the trucking industry - and that which needlessly forces up its costs - is the myriad State laws and regulations which apply to large trucks moving across State borders.
An obvious example is the widely varying costs of State registration fees for semi-trailers. Where the trucking company is based should normally determine in which State its vehicles are registered.
The annual cost of registering a semi-trailer is about $6,000 in NSW, $3,700 in Queensland and $1,200 in Tasmania.
These differing costs, understandably, have led trucking operators to believe they are being overcharged by some State governments, notably NSW. Many NSW-based companies register their vehicles in States with cheaper fees.
Last year the Federal and State governments set up a new body, the National Road Transport Commission (NRTC), to bring in standardised nationwide charges for truck registration fees. The commission, in June, agreed with the truckers that they were being overcharged in NSW.
The NRTC has recommended a standardised registration fee of $4,000 for six-axle semi-trailers. The parochialism of State governments on transport policies, which the NRTC is trying to overcome, has been demonstrated by NSW's adamant refusal, so far, to agree to lower its registration charges to meet the NRTC's recommendation.
That argument is going on.
There has been greater success in the past two years in breaking down decades of self-interest within the various States to deliver what the Prime Minister, Mr Keating, described last month as Australia's dream of the century, the formation of one freight railway system linking the major ports -Brisbane, Perth, Melbourne, Adelaide and Sydney. Australia has suffered for decades - and the trucking industry has prospered by default - because of the hugely inefficient national rail system which was constructed with differing gauges, requiring rail cargo to be transferred at some State borders.
With the formation of the National Rail Corporation (NRC), State governments have agreed to hand over their rail freight operations to a single authority but its birth is being frustrated by the failure of rail unions and the NRC's management to agree on sweeping industrial relations reforms, to get rid of railway featherbedding. The reforms are a condition of Federal Government financing for the new body.
The new NRC is required to operate on commercial principles - unlike the history of past State Government railway authorities - and the hope is that will provide competitive freight charges and greatly improved delivery times.
On the nation's wharves, a quiet revolution has been taking place.
Helped by a wharfies' redundancy program, which the Federal Government has contributed to, the waterfront workforce will be slashed by 5,000, down to about 3,800 jobs.
The redundancy program, designed to cut the costs of cargo handling, has been harshly criticised by the Federal Opposition for being overly generous.
Early this month the Prices Surveillance Authority (PSA) suggested Australians were paying too much for imports because shipowners had failed to pass on the full benefits of waterfront reform - a finding rejected by shipowners.
One of the most successful micro-economic reforms conducted in the transportation industry was the NSW Government's sale of the Port Kembla coal loader. After the sale, the loader's throughput jumped by 121 per cent.
And in Newcastle, after the State Government sold its part-ownership of the coal loader, so it became privately owned, productivity of the loader jumped from 11th in the world to second position.
This year, aviation has been the target of the Federal Government's transportation reforms. It merged Qantas and Australian Airlines and is to sell off 49 per cent of the new entity, which will provide a much-needed capital injection for Qantas.
It will also allow Ansett to begin international services in competition with Qantas, ending decades of protection for the Government-owned international carrier.
© 1992 Sydney Morning Herald