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Future Freight Networks : Yearbook 2012
Mr Ruthven followed up Mr Mrdak's discussion, saying that in Australia, the freight sector contributes about five per cent of the country's GDP, while in the United States it's about three per cent. Mr Fullerton outlined the company's history of expansion, which now covers 8500 kilometres of track. Some 60 per cent of the ARTC's freight is interstate. Passenger traffic makes up the bulk of the business, while 40 per cent comprises intermodal and steel products. The east-west corridor is a mature market, he said. It has 80 per cent of the market share. The company is wrapping up a $1.3 billion investment program to upgrade capacity. But it's the north-south corridor that has seen an erosion of rail's market share since the 1960s. The company is wrapping up a $2.8 billion investment program. The last key projects in the coming months include the southern Sydney freight corridor. Mr Fullerton said it was the 1800-kilometre Melbourne--Sydney corridor that best demonstrated the 'failure' of rail to compete adequately with road. Rail accounts for 20 per cent of the freight between the two cities, he said. 'Our objective is to turn around that decline,' Mr Fullerton said, adding that the company needs to improve reliability. 'It needs to be cost-effective and safer. 'We need to be a more active and informed member of customer supply chains. It's not about building a better track and they will come.' Mr Fullerton said rail will need to be part of the overall supply chain with the help of intermodal terminals that can warehouse. Regulatory reform that reduces complexity of rules can also be a boost to the sector. 'Rail can't just be seen as an "over- flow option",' Mr Fullerton said. Paul Larsen, CEO of Brookfield Rail, which is centred on the south- west corner of Western Australia, discussed how demand from the resource sector has triggered a boom in freight volume. Over a decade ago, the company hauled 30 million tonnes. This year it will be 50 million. Next year that number will jump to 80 million tonnes. 'That's coming from iron ore. Our customers are looking for cost- effective, reliable access,' Mr Larsen said. Still, the sector is being hurt by the growing frequency of industrial action, he added. Mr Larsen said offshore investors might be spooked by striking port workers and train drivers that can cost clients 'hundreds of millions of dollars'. He called for a more even balance between rail and road pricing in order to attract more investment in rail systems. 'If there's no balance in pricing between road and rail, the government will be putting its hand in its pocket,' Mr Larsen says. Mr Ruthven followed Mr Larsen's comments with an observation that since European settlement in 1788, Australia has had six resource booms. He forecasts the current boom lasting for another decade. International competition to supply cheaper coking coal, iron ore and energy will refocus attention on driving efficiency gains from infrastructure that can cope with cheaper rivals, Mr Ruthven said. The resources sector has boosted production by 55 per cent over the last decade. The workforce has increased from 90,000 to 220,000 as prices skyrocket. 'We've had a price boom, not a volume boom,' he said. Brian Kruger, Managing Director of the Toll Group, said about a third of the company's revenue is coming from outside Australia, especially Asia. 'Our future is clearly linked to the efficiency of supply chains in Australia,' Mr Kruger said. Mr Kruger called for speedier Mike Mrdak, CEO of the Department of Infrastructure and Transport; John Fullerton, Chief Executive for Australian Rail Track Corporation; Paul Larsen, Chief Executive Offcer for Brookfeld Rail; Ken Lewsey, Executive Vice President for Strategy and Business Development for QR National; Stephen Cleary, Chief Executive of StarTrack; and Brian Kruger, Managing Director Toll Group. 40 FORUM 2012