Jill Lewis - The Chartered Institute of Logistics and Transport

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CONGESTION (Speech given by Andrew Stewart at the recent CEDA Address, please note that this is his personal view) 1950 – 3 billion people, of which 1.5 billion in dire poverty (a famine, flood or, disease or drought means death) 2010 – 7 billion people of which less than 1.5 billion in dire poverty (possibly only 900 million). So 6 billion benefit from the miracle of economic development of the last 60 years. The caves of our house in France were first built in 791, and since then there has been more time when the population and economy of the world has been negative than positive. Only in the last 150 years has there been sustained improvement, only in the last 60 such sustained improvement for so many. And that has consequences.....in today’s case, congestion. But let’s not get so tied on a problem that we forget it is a consequence of a miracle of economic development. So Congestion – an inconvenience, a real cost – just to business or also to consumers, the price of modern life? Is congestion defined just by the inconvenience to me, or the real cost of lost time to business and slowed supply chains and frustrated staff and overloaded infrastructure? In 2001, as part of the Transport Logistics Action Agenda, we set an agenda, but unfortunately not much action. A major point of that report was that passenger and freight movements would continue to increase – and by about one and a half times GDP growth. They might drop to 1 and a quarter given electronics was reducing size of stuff. But we pointed out that more stuff was being imported, distribution patterns were becoming increasingly complex, and that people’s travel patterns were increasingly complex and unpredictable. A decade later, we were correct in our analysis. Unfortunately we did not win the political conversation so the Bob Carr Movement whereby he could sit at Maroobra Beach to tell the tide not to come in – or Australia’s population NOT to increase by a third of a million a year. We need to accept that Bob Canute Carr was wrong. We are fortunate that our population is only increasing at a third a million a year.......from most other places in the world, there’d be a stampede to enjoy our lifestyle. And that won’t let up, as I know as a world traveller with people in Europe, Asia, China increasingly asking how they can be part of our country. So let’s accept the economic development miracle globally will continue another 30 plus years – I will use the Chinese forecasts that use 2040 as a baseline.....that’s when they expect world population to peak (perhaps Africa excepted), the middle class to be half the world’s population (that’s more than 4 billion) ....and China to be leading country. Just the momentum of current population and economic growth will propel us for another few decades of growth..........so let’s just accept that and plan for it. Three factors will impact on the congestion of our life in a more populated and urbanised world (and Australia probably the fastest growing developed nation for the next few decades) 1/ Size and Scale 2/ Speed and 3/ Sophistication. 1/ Melbourne is dredging its harbour to accept Super Panamax ships. That’s a consequence of globalisation that offers economies of scale in manufacture and movement. But that means an extra 4000 to 6000 movements in each four day visit of a container ship. Given the rail system is at capacity (despite a decade long wrangle to allow double stacking) and most of those movements will be in or close to Melbourne, much of that concentrated extra movement will be by truck. Our 2001 forecasts were politically played with (we had to change the minimum growth forecasts to maximums so we didn’t clash too much with infrastructure funding forecasts......but that’s another story). Before the Super Panamax ships have arrived, we are ahead of forecast for port traffic movement. And anyone who has enjoyed the A380 trip knows the congestion they cause in and around airports (the pax side alone). Or the growing scale of major events that Melbourne shows the world how to handle major people movements. And if you want me to scream, just suggest that we should be carting more produce or stuff for consumers by trains......here’s the facts. The coal trains are so long and so profitable in Queensland, that most of the general freight has been canned and any increase on the Queensland lines is ‘deferred for the foreseeable future”. Size of coal trains means barely adequate infrastructure (mainly where the coal lines join or use sections of the general lines) and lack of passing loops makes the rail share of general freight fall. That’s just one consequence of scale. That is a form of congestion whereby infrastructure is crowded even in the open Queensland plains. The examples of size are numerous, but the picture is economies of scale produced cost savings for many, but INVOLVE | INFORM | RECOGNISE | DEVELOP
also has increasingly severe consequences in congestion of public infrastructure. 2/ Speed is relative. That van driver drumming his fingers on the steering wheel as he sits in congestion between Lambeth (inner London) and Heathrow may hardly believe he is part of the speed issue. Nor the van driver who collected the parcel caught in congestion in inner Sydney. But they are. Because when my daughter sees some fashion statement on the internet, she’s in a race to have it. Why wait for the retailers to have their fashion season meetings, negotiate with suppliers and copyists, set a price, arrange logistics etc etc...when Net a Porter will have it at her door in Sydney in 3 working days. And that’s just the consumer angle of Just In Time which impacts most business. The Consumer angle is called ‘Must Just have it in time’. Do consumers connect their need for speed with the increasingly slow trip to work each day? Of course not. That’s congestion of convenience. And there wouldn’t be too many warehouse managers of Fast Moving Consumer Goods who wouldn’t consider they book only 97 percent of their stock into warehouse or even cross dock slots......the rest is slowing moving, especially given demurrage is generally free in our highly competitive freight logistics world. Just hold that connection between relative speed and free demurrage for our conclusion. Sophistication is the most intriguing yet least understood of our trio with Size and Speed. Basic mathematics concludes that growing numbers in size and speed multiplied give an increasingly big number on a curve pointing more vertically. That could simply suggest we answer one bigger number with another – as the Chinese have done in their impressive infrastructure investment. Building the entire US Highway system in each of the last five year plans, and more than the rest of the world’s fast train network, plus air and shipping ports. Very Impressive. A few months after the six and eight lane freeway from Shanghai to the new airport was built we had a reasonable run.......it has been a car park since. That’s with a Maglev train in parallel and some disciplined actions to remove some local traffic onto alternative routes. I am NOT ARGUING FOR LESS INFRASTRUCTURE .....let me make that very clear. And in Australia we are well behind just producing core, mainline infrastructure for our population growth. And we ought to be looking very closely at India, where poor infrastructure is pulling two to three percent off GDP each year. Nigeria (nine times Australia’s population in the size of NSW) is launching a major effort to improve core infrastructure because of the losses to the economic wellbeing of its people from congestion and poor logistics. Inadequate infrastructure and poor logistics costs real dollars from real people en masse. That’s congestion of real cost to real people due to overloaded infrastructure and no sophistication in planning. We do have some of that congestion in Australia. But we are also suffering from our infrastructure and planning being wrong footed by fast, sophisticated shifts in travel patterns, much of it driven by IT led changes of habits among consumers and in lifestyle. As our infrastructure czars appointed in Australia over the last few years have found out, the pattern of movement of people and freight is moving faster than they can draw up plans, cogitate, waffle their way through the political budgetary process.....and actually get concrete poured. The sophistication is not really that sophisticated....but highlights the need for a supply chain, overarching approach to patterns of movement. Let me take you out of the many examples we could find in a capital city (such as container movements from ports, or consumer demand movement) to the Eton Range behind Mackay. Certainly the coal industry was in a hole in the The sophistication is not really that sophisticated ....but highlights the need for a supply chain, overarching approach to patterns of movement. 1990s and into the early 2000s, albeit volumes kept growing and mines kept opening. But planners took the view that plenty of meat had been built into infrastructure in the 1960s and 80s booms, so let’s coast. In fact a $28 million upgrade of the WW2 engineering crossing from the coast to the coal country was canned in the early 2000s. The dollars were spent on a second pedestrian footbridge in Brisbane to the New gallery of Modern Art. Very architectural. Meanwhile 140 trucks a day cross a narrow steep two lane road from the Port of Mackay to the coal fields. When it rains, as it does often in the wet tropics, Main Roads has to law out sheets of sand paper to try to stop the 60 plus tonnes of truck and its diesel load slipped into the forest. Police hold up truck at each end so that they come up on convoys with no ne going the opposite way. Congestion, Cost.....and that road is a killer. The rail won’t tale fuel because it doesn’t have the capacity. So trucks and more trucks.
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Jill Lewis - The Chartered Institute of Logistics and Transport

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