Intermodal Terminals: The Policy Issues

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Intermodal TerminalsThe Policy Issues

• Presentation to BTRE Colloquium
• Canberra
• June 14-15, 2006

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Overview of the paper

• The intermodal system
• structure
• current task
• future challenges
• Thinking about intermodal policy
• Putting a coherent package together

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What is an IMT and why are we interested?

• A facility purpose built or developed to provide
  the capability of contributing to an intermodal
  movement by providing seamless transfer of goods
  from one mode of transport to another
• IMTs are not an end in themselves
• One of a cluster strategies for encouraging modal
  shift
• Modal shift is considered desirable
• Environmental and social concerns about
  increasing road freight transport
• Congestion at the port/land interface as a
  limiting factor on port capacity
• Arguably more economically efficient linehaul
  operations in the long run

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Role of the IMT
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System or Systems?
In Australia, there are two or possibly three
intermodal systems that interact to some extent
but are largely, and I think increasingly,
distinct systems

• The inter-state system
• The import/export system
• The intra-state regional system

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Domestic System
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Rail volumes and share by origin/destination
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Volumes by Freight Corridor
Source Derived from BTRE, ARTC Data
Scale
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5
4
3
2
1
Million tonnes per year
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Future long-distance non-bulk rail freight
Not a given.
Based on ARA Future of Freight, 2005
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Import/Export System
Source National Intermodal Terminal Study
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International containers major ports
Source Meyrick National Intermodal Terminal
Study
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Meeting proclaimed targets
Port-oriented rail volumes
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Implications

• SPECIFIC
• Total increase in required in terminal capacity
  between 100 and 300 over the next 15 years
• Require redevelopment/extension of most major
  inter-State nodes
• Extent of development of additional terminals for
  domestic market will depend on market structure
• Need for additional import/export IMTs
  ,especially but not exclusively in Sydney
• Pressure on terminal space will aggravate access
  issues
• GENERAL
• IMTs will play a pivotal role, but can only be
  talked about sensibly as an element of the
  freight infrastructure network
• Meeting future freight infrastructure demands
  will be a major challenge, especially in urban
  centres
• Lots and lots of government money is going to be
  spent on meeting this challenge

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Towards a comprehensive approach to IMT policy
Infrastructure
Access regulation
Policy clarity
Planning
Skill development
What is the role of government in a sector that
is (largely) privately owned and operated?
Information
Land banking
Technical regulation
Funding
Pricing
Project facilitation
Core role
Possible role
Contributing role
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Policy some definitions

• A line of argument rationalizing the course of
  action of a government
• wordnet.princeton.edu

• Rationalise 1. To invent a rational, acceptable
  explanation for behaviour which has its origin in
  the unconscious8. To justify ones behaviour by
  plausible reasons
• Macquarie Dictionary

A plan or course of action, as of a government,
political party, or business, intended to
influence and determine decisions, actions, and
other matters. World Bank (youthink)
A policy is a plan of action to guide decisions
and actions.... Policies in short can be
understood as political, management, financial,
and administrative mechanisms arranged to reach
explicit goals. Wikipedia
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The public image of the freight transport system
Intermodal policy is policy and therefore it is
going to be political
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Modal shift objectives as policy
An adequate intermodal policy will need to do (at
least) three things

• Most governments have set mode share objectives
  for freight
• Typically these apply only to import/exports
  movements
• There does not appear to be much foundation for
  the specific targets
• More than a pious hope than a policy
• a target without an objective
• a goal without a strategy

• Coherently articulate the objectives of the
  policy
• Clearly present the specific outcomes that are
  expected
• Define the steps that will be taken to deliver
  these outcomes

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Planning
THREE MAJOR CHALLENGES FOR INTERMODAL SYSTEMS
PLANNING
MOVING BEYOND PLATITUDES TO PLANS AND BEYOND
CONCEPTS TO COMMITMENTS
DEFINING THE APPROPRIATE SCOPE AND LIMITS OF
PLANNING
RECONCILING THE PLANNING OBJECTIVES OF DIFFERENT
LEVELS OF GOVERNMENT
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IMTs and TDL clusters
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Brisbane Multimodal Terminal
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Sydney Ports Enfield Plan (Cycle 2)
Deconsolidation/ warehousing
Associated light industry
Container storage and repair
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Community impact

• Pure IMT
• Exchange containers btw transport modes
• Storage for loaded and empty containers

• Value-adding IMT can also provide
• Bonded facilities
• Warehousing
• Freight forwarders
• Container repairs and cleaning
• Truck and trailer parking and repair
• Office locations for ACS, insurance,
• Banking, freight forwarders etc.

Low level of local economic benefit
High level of local economic benefit
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Information

• Widespread acknowledgement of the need for
  coordination and integration
• In reality, powerful players are reluctant to
  release information
• Commercial confidentiality
• Legal concerns
• Just had enough
• Costs
• Lower quality of public decision making
• Higher information search costs
• Voluntary approach advocated in NTDF report
  appears doomed
• Regulatory requirements to disclose information
  exist elsewhere

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Technical Regulation

• For most intermodal movements, a road leg will
  always be part of the journey
• Pick up and set down costs are often a
  significant part of the total intermodal
  transport cost
• Providing special mass or dimensions concessions
  on specific routes to/from intermodal terminals
  can help to reduce this burden

In France, heavy vehicles travelling to
intermodal facilities are permitted to carry
heavier loads than under prescribed limits
applicable to general movements.
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Project facilitation

• Some progress
• Exports and Infrastructure Taskforce advocated
  one stop shop approach for major projects
• COAG accepted this in principle at June 2005
  meeting
• Most jurisdictions are moving or have moved to
  set up something along these lines
• BUT
• The old problem moving from principle to
  practice
• Yet to see how this works for an integrated
  system or network of projects

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Infrastructure
Integration
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Pricing

• Government has direct control only over pricing
  of access to the road network
• Government influences pricing of rail
  infrastructure through regulatory regimes
• Current pricing issues
• mass-distance charging
• congestion pricing
• pricing for externalities
• levies to achieve specific outcomes

All of these are economically unexceptionable
A bit trickier
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Access regulation

• Always a two-edged sword
• risk of discouraging investment
• need to preserve opportunities for innovation
• Two access issues
• Access to the terminal
• Access to the network
• Lots of smoke probably some fire

Attractiveness of terminal as investment
Feasibility of duplication
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Land Banking

• Government often holds the most attractive sites
• Differences between public and private
• time preference rates
• scope of benefits captured
• Government has access to instruments that private
  sector does not

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Skills development

• Shortage of skilled and even semi-skilled labour
  an across-the-board issue for transport.
• Labour needs of simple IMT are modest
• Access to labour and skills in sufficient
  quantity can be key to the success of more
  complex IMTs
• especially the more ambitious ones on the Freight
  Village model
• Regional areas
• Management skills can also be a problem
• Skills problems also in public sector
• The retreat of government
• Rapid staff turnover
• Institutional instability

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Funding

• When?
• Commercially viable terminals
• Hard to see justification
• Marginally viable IMTs
• Development assistance?
• Non-commercial IMTs
• Ongoing assistance (but youd have to have a very
  good reason in terms of the rest of the network)

• How?
• Subsidised loans
• Land purchase and lease back
• Operating Grant Schemes
• Capital Grant Schemes

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Concluding remarks

• The title is wrong the issue is intermodal
  policy, not intermodal TERMINAL policy
• Governments are going to spend a heap of money on
  freight infrastructure, and are therefore going
  to have policies the only choice is whether we
  have coherent or incoherent ones
• The objectives of intermodal policy are not going
  to be purely economic but we should be working
  hard to make that the strategies for achieving
  them are economically sensible
• The less time we spend on road v rail spats, and
  the more we spend on thinking about how best to
  integrate the two, the better off we are all
  going to be