Technology

Shared data: The key to securing our freight future

Nicole-Lockwood-and-container-ship
Image credit: The West Australian

Below is the text of the plenary given by Nicole Lockwood at the Australasian Transport Research Forum Conference, delivered in Canberra on 30 September 2019. It is republished here with permission from the author.

I cut my teeth on the freight and logistics industry in the Pilbara 15 years ago through the boom, the largest period of investment that the region and Australia had ever seen. For the resources companies, the solution to seizing a global window of growth and market share was spending big and controlling the whole operation. They had the ability to do that with vertically integrated supply chains giving them control over their entire operating environment. However that is not the reality for most companies working in freight and logistics around the country.

After almost a decade on the board of Infrastructure Australia its is evident that a long-term vision for the resilience of our supply chains with a clear plan to deliver on that vision is not in place for the majority of the freight sector.

As Chair of Freight and Logistics Council in WA I hear first-hand the strengths and weaknesses of our sector and issues for operators in Western Australia. As part of the National Freight and Supply Chain Expert Panel, extensive consultation across jurisdictions and sectors reinforced that the issues I hear about in WA are not isolated to specific jurisdictions or commodities, they are universal.

So when I was offered the opportunity to Chair the Westport taskforce, I was delighted to be able to take on the challenge. Charged with the task of planning the freight and supply chain infrastructure for the population of Perth and the SW for the next 50 years and beyond it was an opportunity too important to resist. The scope of Westport is to firstly look at our current Infrastructure and understand how it can be optimised, before developing transition and investment plans for port, road, rail and industrial land assets to provide capacity into the long term. This has been an opportunity develop a case study for how to plan for the freight sector in an integrated way to manage the issues and capture the ranges of opportunities that exist.

So today I would like to focus on three areas: Challenges for Australia’s freight industry, opportunities to improve national freight performance, and the importance of data in any solution.

Challenges for Australia’s freight industry

Back to the Pilbara example, the first challenge is the fragmentation of the supply chain. Our system is characterised by a combination of government assets, private assets, private operators, public operators, long-term leases and short term contracts. In and of itself this is not a problem, but the challenge I will outline shortly adds an layer of complexity that can lead to systemic inefficiency.

The second is the three tiers of government with varying rules, operating frameworks and maintenance and capital regimes which largely work in isolation, yet ultimately all need to be interconnected to serve the networks which operate across bureaucratic borders.

The third is volatile commodity cycles. Global competition continues to grow in emerging markets and from jurisdictions that implement more central control. With lower cost of wages and different regulatory standards we need to find efficiencies in every link of the chain to maintain market share.

Since mid last century there has been a lack of integrated planning. Infrastructure Australia’s experience in developing the national infrastructure audit and plan has revealed the gaps in strategic planning across all levels of government and in all jurisdictions. This problem is gradually being solved, however we live with a legacy of disconnected decision making.

In determining a long-term plan the first question that must be asked is where we are headed- what is the vision? The volatility of our political system has resulted in a lack of appetite and capacity to undertake long term planning. Along with that has come a poor discipline around problem definition and options assessment. Rather than first understanding the problem we are trying to solve and the range of ways that exist to solve it, the tendency has been to jump straight to solutions which often fail to understand the broader implications of the investment and what it means for the balance of the system.

As the growth in population continues and people gravitate to living in our four biggest cities, how do we preserve the living standard and amenity for our communities whilst ensuring we can continue to serve them with an efficient and productive freight network?

Westport has shed some interesting light on the conflict between increasing urban density and ensuring access to our key freight nodes. With Fremantle port located in the heart of the metropolitan area of Perth the issue is not the capacity of the wharf, but rather the capacity of the road and rail links that serve that wharf. Road modelling has demonstrated that urban congestion will choke the freight task well before the port infrastructure has reached the end of its useful life. However with the majority of our freight network operating on shared corridors what is the solution – who wins? The human or the truck? The answer is they both must win as they are inextricably linked.

As we have moved through the problem phase and started to understand the range of options we have to solve the issue of container capacity, it has become clear that managing the freight and passenger network in the short to medium term is just as important as successfully delivering a new port in the next 10-15 years. The complexity of that challenge goes back to the first point I made around the structure of the sector.

The heavy vehicle route into the Port of Fremantle is also a major trunk route for the general passenger network. With density targets of over 40% set for the inner metropolitan area of Perth, that route will be outstripped by cars over the coming decade.

We have a highly fragmented heavy vehicle sector with 20% of the operators carrying 80% of the volume. The remaining 80% of operators run a fleet of heavy vehicles that are falling behind in terms of standards and quality. We have a freight rail constraint coming into the port, where both passenger and freight rail share a bridge. The only place they share a line on the whole network. For 2, 3 hour periods a day freight trains cannot cross the river in order to prioritise the peak passenger rail movements. The line is owned by the State government in part, leased by a third party operator in part, and rail services are operated by other third parties.

The port has control over the rail terminal on the wharf but has no jurisdiction over the performance of the road or rail network outside its gates, without which it cannot operate. So in planning for the long term future of Fremantle Port, the question is how can we continue to optimise the supply chains into the port without overarching control of the whole network? The answer is through shared understanding, vision, and a commitment to an agreed outcome. Very difficult to achieve when government, industry and the community are all contributing to the problem, and all have an interest but often diverging views on the solution.

That leads me to my last key challenge, the lack of social license for freight. The Freight and Logistics Council of Western Australia has recently embarked on a project about how to build a social license for freight. This began with a piece of community research framed to understand how much people know about the industry, what their areas of interest were and whether they wanted to understand more. The research revealed that majority of people don’t know anything about the industry and believe they don’t need to know anything more. It is a service they take for granted. They recall the impact of trucks on their daily commute, but don’t translate that to the role those trucks undertake in providing them with the items they use every day.

This could be one of the key reasons that we can recount numerous examples of major infrastructure projects with freight at their core that are stopped by the community due to lack of social license.

This is fuelled by changing social expectations which comes in numerous guises:

  • The demand for freight and how we want to be served for example, the speed of online deliveries;
  • Increasing social expectations about the environment and the need to continually improve operating practices; and
  • A decreasing tolerance for any external impacts like noise, dust, odour, emissions and light.

In scoping our work for Westport we took a close look at the Roe 8 or Freight Link project that was controversially stopped as a result of the last election in WA. There were numerous lessons to be learned from that project.

The first was that the problem had not been defined. In fact the greatest benefit from the construction of the corridor would have been passenger traffic, yet the project was coined Freight Link.

The detail of the infrastructure solution was not revealed to the community, meaning that significant impacts to local roads in close proximity to the port would not have been known by the community until after construction had begun.

There was no transparency about the level of impact on the environment, or the evidence upon which that impact was determined. Instead, the community was left to fill the void with a combination of fact, opinion and myth.

The government failed to provide a compelling vision about the purpose of the project. In the broader strategic context and with mounting community concern and pressure, they were unable to provide the evidence the community needed to be confident that this project was the best outcome.

With trust in government at an all-time low, a new approach is needed. In an environment where social media has become fact, and the community is more informed than ever before, political grit and determination to push past community sentiment to deliver a project or change a policy for what may be seen as the “greater good” is no longer a successful strategy. The Westport journey has provided an intimate insight into how to tackle this growing challenge. Uncovering the silent majority, understanding the vocal minority and educating them both is critical for success. Being open to hear community feedback and take the time to understand values and concerns is a vital ingredient, then being able to show how that feedback has influenced the process and potentially changed the decision or design.

The problem is that in a context of population growth, ageing infrastructure and global competition, doing nothing is not an option. While people’s expectations keep rising and their demands keep growing they are becoming less and less tolerant of any change or impact. The old adage of the NIMBY (Not In My Back Yard) has evolved to the BANANA (Build Absolutely Nothing Anywhere Near Anything).

I’ve painted a bit of a bleak picture but all is not lost; to create systemic change you need a burning platform or a crisis. To date, our plentiful resources, buoyant economic conditions and cities of endless greenfields development have meant we have been able to take the path of least resistance and rest on our laurels.

The time for complacency is coming to an end. As emerging economies begin to trade in our areas of competitive strength; infrastructure dollars become more scarce; and the community demands more, for less, in a shorter time, with less impact, we have to work smarter not harder to overcome the challenges and harness the opportunities. And we need to do it together!

What are the opportunities to improve national freight performance?

The first opportunity is corridor protection. We need to ensure that options for future generations have been preserved by the protection of corridors. Infrastructure Australia undertook a comprehensive piece of work looking at the exponential cost difference of delivering infrastructure for future generations when corridors have not been protected. This requires an improvement in the long term planning in every jurisdiction and a level of integration of planning between all three tiers of government, particularly where freight corridors cross jurisdictional boundaries.

Complementing this, we need strong planning controls to limit urban encroachment on major freight routes and vital infrastructure hubs. Failure to do so results in conflicts between operating hours and practices and social expectations. In a fight between an aircraft or a truck and a human, it is usually the human that wins.

This results in negative impacts to productivity and increased costs for the community. Debates around land use conflict are fuelled by individual interests and it is here that the role of government is critical in putting in place appropriate policies to protect both users. Lack of political appetite to do this is evident throughout our urban environment, and in an attempt to please one interest group, both lose and the long-term outcome is compromised.

The second is building a capability for system thinking.

As our cities increase in density, understanding how communities can be served efficiently is fundamental to maintain the standards of living that we have all come to expect as well as keeping supply chain costs down. Current case studies depict situations where trucks need to park hundreds of metres away from their delivery destination due to lack of provision for delivery bays on the road network. Residents complaining about the noise from waste trucks servicing their apartment blocks at night when they can access the facilities in an efficient way, resulting in them needing to attend the facilities during peak times, causing more disruption for other users; and difficulty managing the increasing volumes of deliveries created by online shopping.

Then there is the need to come to terms with what automation will mean for the sector and the community, an issue that has the experts divided. All of these examples need to be tackled through system thinking. A solution developed through only one lens will create unintended consequences for other parts of the system. The capability to plan across sectors and jurisdictions is something that our current system does not support or enable. Further, system thinking is a skill set that is in short supply and needs to be developed quickly to manage the impending change as effectively as possible.

The third is developing deeper technical knowledge about the freight sector. Technical knowledge is missing in two key areas- the planning profession and within government policy departments. It is disappointing to find that most tertiary planning qualifications around the country do not include freight and logistics as a core component of their degree.

The best of them may offer a series of guest lectures on freight. This results in unintended consequences like industrial land estates being constructed that do not have appropriate turning circles to allow for heavy vehicle access, urban subdivisions being approved without the appropriate level of acoustic protection for adjacent rail activity, and rezoning of land to allow for mixed use alongside major logistics hubs without sufficient buffers.

There is a poor level of understanding of both the impacts of freight on the community and the critical operating practices for industry resulting in a failure to plan and adequately protect the needs of both the operators and the community.

More broadly, limited industry knowledge within central government policy and planning agencies to understand the impact of government decisions, or a lack of decision on operators is a critical issue when government changes regulatory settings, operating practices or investment regimes. What are seen as small decisions made by government to an operating environment can have significant impacts to a company’s productivity and therefore profitability.

At a time where every dollar is crucial to the viability of logistics businesses, those decisions need to be considered, discussed with operators and implemented carefully. There is a need to continue to develop this level of capability and understanding by finding more opportunities for industry and government to work together.

The importance of data in any solution

Open, integrated, long-term planning driven by an evidence base and supported by data systems that are developed by government, industry and community in partnership.

I contend that Westport is a model that could be evolved to meet this need, for the following reasons:

– The project is built on a foundation of spatial data fed from government, industry, academia and the community
– It is governed by a cross functional technical team from 10 State government agencies, with direct involvement of local and federal government
– It is supported by a reference group of over 90 organisations from industry operators, community groups and researchers who have been involved in contributing information and testing findings throughout the options assessment phase
– The community and industry are engaged in regular public reporting of the evidence base online, in community forums, surveys, phone interviews, one-on-one meetings and workshops. This provides a platform for open, transparent information sharing, analysis and ultimately, decision making.

Freight operators rarely have insight into the long-term growth and performance of the networks they operate on. In sharing the 20 year microsimulation we have developed for the road corridors for Fremantle, the conversation with community and industry has significantly shifted. Previously they were in support of an infrastructure solution that was a bandaid. We are now engaged in a dialogue that is based on an understanding that we need to find a solution that solves the long term problem in a cost effective way. That has been achieved through having a single source of truth and a shared knowledge base and understanding of the problem and the options to solve it.

This model is for a project. What about on an ongoing basis for the whole logistics system?

One of the key recommendations of the National Freight and Supply Chain Inquiry, which has now been implemented by the national strategy, is the development of a platform, the National Freight Data Hub. The value is not in the data itself but in the interaction of that data and the decisions that can be made from it. In fact in its first incarnation it is simply about connecting all the information that is already available from operators and government. It is not a panacea but provides everyone with the information they need to make better informed investment decisions and optimise the assets and systems we have.

This information is of equal value to community members, seeking to travel on shared freight corridors; governments, determining where to invest scarce infrastructure dollars; and freight companies planning their daily operations to optimise their workforce and assets.

What’s the role of government in establishing such a platform?

  • Determining the rules of the game to ensure commercial information is protected and access is managed in accordance with a governance framework that is transparent and agreed to by all contributors
  • Creating multi-user infrastructure that allows participation in the market from operators of all scales and maintaining the data over time to ensure its value is retained
  • Developing a deeper capability and level of understanding of the issues facing the freight and logistics sector in both planning and operations and creating opportunities for more fluid transfer of skills between public and private sectors to minimise the inefficiencies to the greatest extent possible.

The first critical step

For government, industry and the community, factual information is key. A single source of truth in a national freight data hub is the first critical step to provide the evidence base to educate the whole system. This will provide us with the foundation to inform decision making to ensure the standard of living we all love and expect is preserved and our operators can continue to be globally competitive.

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