Rail Freight

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Contents

History

Railways have been operational in New Zealand since 1863. Rail grew quickly and tracks were built throughout the country so that by 1880 over 1900 kilometres of track carried 3 million people and 830000 tonnes of freight per year. <ref> Neill Atkinson. 'Railways - Freight transport', Te Ara - the Encyclopedia of New Zealand, updated 10-Jul-13 http://www.TeAra.govt.nz/en/photograph/21401/milk-trains (Accessed 22/09/2013). </ref> However, the economic depression of the 1880’s saw a decline in the rate at which rail was developed. The North and South Island main trunk lines were completed in 1908 and 1945 respectively. These two lines remained separated until the development of the Interislander ferry in 1962 which allowed connection of rail freight lines between the two islands. <ref> Heatley, D., 2009. The history and future of rail in New Zealand. New Zealand Institute for the Study of Competition and Regulation Inc. 84pp.</ref>

Although rail lines were primarily built in order to transport passengers, increased popularity in private motor vehicles saw the usage of passenger trains drop dramatically to the point that they are virtually non-existent outside of the urban centres of Auckland and Wellington. Aside from long-haul transport, originally the purpose of rail lines – freight is now the most prominent form of rail usage in New Zealand and accounts for 15% of all freight transport in New Zealand. <ref> Ministry of Transport, 2013. http://www.transport.govt.nz/ourwork/rail/governmentpolicyandfundingforrail/ (Accessed 28/09/2013). </ref>

The importance of rail was highlighted during the early 1900s due to its ability to transport agricultural goods from farms to the markets or ports for export. Everything from milk to livestock to grain was transported by train. This practice was especially useful in the Canterbury region and until the 1960s the government provided subsidised costs on transport for agricultural produce and free delivery of lime. <ref> Neill Atkinson. 'Railways - Freight transport', Te Ara - the Encyclopedia of New Zealand, updated 10-Jul-13 http://www.TeAra.govt.nz/en/photograph/21401/milk-trains (Accessed 22/09/2013). </ref> Rail in New Zealand has a long history of privatisation and government ownership. <ref> Heatley, D., 2009. The history and future of rail in New Zealand. New Zealand Institute for the Study of Competition and Regulation Inc. 84pp. </ref> The central government first acquired control of the rail network in 1876. Figure 1 shows a timeline of rail ownership from 1993. New Zealand Rail was privatised in 1993 with sale to a range of shareholders. <ref> National Infrastructure Unit, 2010. http://www.infrastructure.govt.nz/plan/mar2010/34.htm (Accessed 22/09/2013). </ref> By 2002 with failing economic performances the renamed Tranz Rail sold 84% of the total shares to the Toll Group which was subsequently sold back into government ownership in 2004. This move saw another renaming of the rail system to KiwiRail, which remains the current operating authority.

Figure 1: Timeline of rail ownership in New Zealand from 1993 to 2008 <ref> National Infrastructure Unit, 2010. http://www.infrastructure.govt.nz/plan/mar2010/34.htm (Accessed 22/09/2013). </ref>

Usage

In New Zealand more than half the amount of freight transported goes between cities rather than within cities. <ref>Mackie. H, Baas. P, Manz.H. 2006. The contestability of New Zealand’s road freight task by rail. Transport Engineering Research New Zealand Limited </ref> The New Zealand freight industry is varied, with 26% of freight being transported in containers <ref> Heatly. D. 2009. The history and future of rail in New Zealand. New Zealand institute for the study of competition and regulation Inc.</ref> Table 1 shows a large proportion of transported goods are aggregates as well as agriculture and forestry goods. This reflects the main industries in New Zealand.

Table 1: Freight movements for selected commodity groups. <ref> Ministry of Transport (MoT). 2008. National Freight Demands Study, executive summary </ref>

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The current freight task (as of 2008) is dominated by road transport whereas rail carries a small proportion of total freight shown in fig 2.

Figure 2: The total freight task by modes in tonnes and tonne-kms <ref> Ministry of Transport (MoT). 2008. National Freight Demands Study, executive summary </ref>

Since the railways operation began in 1863 there has been an increase in the amount of railway lines across the country until 1953 when it reached its peak at 5500 km of rail line. Today there is 4000 km of rail lines and it is currently possible to freight something all the way from the bottom of the south island to the top of the north, changing only from train to ship to cross the cook straight. The goods that rail currently transport are outlined in fig 3.

To see how the rail network has progressed visit [http://www.teara.govt.nz/en/interactive/21378/new-zealands-rail-network-1880-1940 Te Ara

Figure 3: current use of rail by weight (adapted from data <ref> Heatly. D. 2009. The history and future of rail in New Zealand. New Zealand institute for the study of competition and regulation Inc </ref>)
Figure 4: Currently active and closed tracks (as of 2012) <ref> Cenek, PD, RJ Kean, IA Kvatch and NJ Jamieson. 2012. Freight transport efficiency: a comparative study of coastal shipping, rail and road modes. NZ Transport Agency research report 497 </ref>

When comparing net tonne-kms of road and rail, road shows an increase at a reasonably constant rate whilst rail has remained reasonably constant particularly since 2000, the trend of roading has been an increasing trend (Fig. 5). This indicates there could be potential for rail to increase and lessen the predicted increase in roading (Fig. 6)

Figure 5: Freight transport via rail and road from 1993-2007 <ref> McGimpsey, P, Havemann, J. and Sutcliffe, J. 2009. Promoting sustainability in New Zealand’s rail system. NZ Transport Agency Research Report 370 . 102pp </ref>

In comparison between 1997 and 2005 the amount of heavy trucks on the roads has increased by 55% with an increase of 42% of heavy vehicle kilometers <ref> Mackie. H, Baas. P, Dr Pont. J. 2007. Prediction of freight growth by 2020 and rails ability to share the load. IPENZ Transport Group Conference Tauranga 10-10-2007.</ref> Figure 6 indicates that truck usage (in terms of Heavy vehicle kilometers and Road User charges) is predicted to increase. As truck usage has been thought to increase in multiple studies it suggests that there is growth in the area and rail has the potential to increase.

Figure 6: Estimated heavy vehicle kilometres (HVKM) and Road User Charges (RUC). Solid lines are the estimates and dashed lines are the upper and lower confidence intervals <ref> Mackie. H, Baas. P, Manz.H. 2006. The contestability of New Zealand’s road freight task by rail. Transport Engineering Research New Zealand Limited.</ref>

Pressures

The main pressure on the freight industry is its predicted growth, because of this the current way of transporting goods (by road) is un- economical and puts unneeded pressure on the environment. Table 2 shows the amount of freight transported across different sectors and rails predicted increase to 2031. Data from the below table may be inconsistent with current freight due to the financial down turn which negatively affected many sectors in New Zealand shortly after these results were predicted. However no predictions like this have been done since the study in 2008.

Table 2: Forecast Growth by Rail. <ref> Ministry of Transport (MoT). 2008. National Freight Demands Study, executive summary. </ref>

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Movements by mode

In New Zealand we use three modes for transporting freight within the country; road, rail and coastal shipping. These modes are shown with their distribution in Table 3. Live stock is transported by road as it is the most versatile, most user friendly and to reduce stress on the animals with transport and travel times.<ref> FAO Corporate Document Repository http://www.fao.org/docrep/003/x6909e/x6909e08.htm </ref> However, with the transport of products such as aggregate, other minerals and petroleum products this is not a restriction, therefore there is potential for growth of rail in this area.

Table 3: Mode Share for Selected Commodities <ref> Ministry of Transport (MoT). 2008. National Freight Demands Study, executive summary </ref>

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Rail Freight Usage as an Environmental Indicator

The usage of current infrastructure is important for understanding how effective we are using our current infrastructure and how we can expand the carrying capacity to create the largest benefits with the smallest environmental cost.

Emissions

The Pressure

Greenhouse gas emissions from transport are a concern. Greenhouse gases are responsible for the greenhouse gas effect, the warming of the Earth's surface and lower atmosphere associated with impeded passage of energy from the Earth into space. The added greenhouse gases from activities such as the burning of fuel creates extra warming; the enhanced greenhouse gas effect. <ref> NIWA (2013) online: http://www.niwa.co.nz/our-science/climate/information-and-resources/clivar/greenhouse The Greenhouse effect. (accessed 26/9/2013). </ref>

In this section emissions are taken as their carbon dioxide equivalent of the direct greenhouse gases; carbon dioxide, methane and nitrous oxide.

The State

Figure 7: New Zealand Energy Sector Emissions 2011 <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref>
Figure 8: Trends in Emissions by Sector, 1990-2011 <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref>

Transport greenhouse gas emissions are classed as energy sector emissions. The energy sector is the second largest contributor to total New Zealand emissions and makes up 42.6% of the total emissions with a contribution of 31.0 MT CO2. <ref> Ministry for the Environment (2013) New Zealand's Greenhouse Gas Inventory & Net Position Report 1990-2011: Snapshot April 2013. New Zealand. </ref> In 2011 transport emissions accounted for over 45% of total energy sector emissions (fig 7). Transport emissions therefore make up approximately 20% of New Zealand total greenhouse gas emissions. <ref> Ministry of Transport (2013) online: Climate Change and Energy. http://www.transport.govt.nz/ourwork/climatechange/ (accessed 26th August 2013). </ref> Transport emissions have grown by 60% since 1990 and by 1.4% since 2010 (fig 8).

Figure 9: Transport Emissions by Mode, 1990-2011 <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref>
Figure 10: Emissions Intensity of Freight Transport <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref>

Total freight transport emissions have increased by 1006 kt CO2 since 1990 (fig 9). This total change can be broken down into road, rail and coastal shipping modes. Trends in transport emissions can be measured according to three main effects. Activity changes are a change in the amount of transport undertaken, mode switching is a change in the method of transport used and emissions intensity changes are alterations in the level of emissions emitted per unit of transport undertaken. The total change in emissions is a sum of these.

Freight activity increase between 1990-2011 in isolation would have caused a 1,273kt increase in emissions. Alongside increased activity, there has been a steady increase in the mode share of trucks since 1990. <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref> This follows global trends of a change in model structure towards trucking. <ref> Eom, J., Schipper, L. and Thompson, L. (2012) We keep on truckin': Trends in freight and energy use and carbon emissions in 11 IEA countries. Energy Policy 45: 327-341. </ref> Mode switching to road would have added 233kt CO2 to total emissions because road mode has a higher emission intensity (fig 10).

However road mode emission intensity improvements of 499kt CO2 since 1990 have offset this increase (fig 10). This 23% reduction has a high impact on the total change in emissions due to the higher mode share. Rail freight has had a 43% reduction in emission intensity since 1990 because of load factor improvements (fig 10). This is the greatest intensity reduction of the three modes. <ref> Ministry of Business, Innovation and Employment (2011) Energy Greenhouse Gas Emissions report. New Zealand. </ref> Total emissions from rail have grown but have done so from a low base (fig 9).

Table 4: Fuel Consumption and CO2 Emission Rates for different transport modes <ref> Cenek P.D., Kean R.J., Kvatch I.A. And Jamieson N.J. (2012) Freight transport efficiency: a comparative study of coastal shipping, rail and road modes. NZ Transport Agency research report 497. </ref> 15.png

It is important to consider the efficiency per container of the different modes. The main factor determining rail efficiency is the number of containers hauled. <ref> Cenek P.D., Kean R.J., Kvatch I.A. And Jamieson N.J. (2012) Freight transport efficiency: a comparative study of coastal shipping, rail and road modes. NZ Transport Agency research report 497. </ref> Likewise, energy and emissions intensity of trucks decreases as size increases. <ref> McGimpsey P., Havemann J. and Sutcliffe J. (2009) Promoting sustainability in New Zealand's rail system. NZ Transport Agency research report 370. </ref> The rail mode must transport at least 25 containers per train and maritime 297 containers per vessel to have a fuel efficiency comparable to road. The maximum number of containers for maritime is 550, for rail is 40 and for road is 1. Given this, the maritime mode is slightly more fuel efficient and less CO2 emission intensive than rail. Both rail and maritime transport modes are almost twice as efficient as road.

Many assumptions must be made when calculating freight transport emissions. There are a high number of variable factors including vehicle type, load, driving mode, road conditions, traffic and environmental conditions such as wind. <ref> Cenek P.D., Kean R.J., Kvatch I.A. And Jamieson N.J. (2012) Freight trasnport efficeincy: a comparative study of coastal shipping, rail and road modes. NZ Transport Agency research report 497. </ref> For the calculation of road emissions in table 4 it was assumed that the fuel used was similar to European EN590 diesel which emits 2.6kg CO2 /L. Rail emissions depend on the time spent in each notch and the corresponding emission factor. In table 4 the average CO2 emissions for diesel locomotives was taken to be 2.952kg CO2/L fuel burnt with an average of 40 containers assumed. This varies considerably in reality.

Figure 11: Comparison of lifetime energy use for roads and rail in terms of fixed infrastructure (GJ/annum) <ref> McGimpsey P., Havemann J. and Sutcliffe J. (2009) Promoting sustainability in New Zealand's rail system. NZ Transport Agency research report 370. </ref>

In depth analyses of freight transport emissions requires full life-cycle accounting.<ref> Heatley D. (2009) The history and future of rail in New Zealand. </ref> Unsealed roads, which currently make up one third of the total road network length, have an emission cost 4 times higher than sealed roads over a 40 year period because of maintenance needs. <ref> Mithraratne, M. (2011) Lifetime liabilities of land transport using road and rail infrastructure. NZ Transport Agency research report 462. </ref> Rail infrastructure energy use is lower than road infrastructure energy use for unsealed roads, however it is 35% and 26% higher than highways and urban local roads respectively (fig 11). In the Netherlands once all indirect energy use is taken into account the total energy use of rail is similar to that of large trucks on major road routes. <ref> Heatley D. (2009) The history and future of rail in New Zealand. </ref>

In New Zealand steel rail tracks for rail construction are responsible for nearly half the lifetime greenhouse gas emissions for rail tracks and sourcing rail tracks from best practice factories in China may only moderately reduce this. <ref> Mithraratne, M. (2011) Lifetime liabilities of land transport using road and rail infrastructure. NZ Transport Agency research report 462. </ref> In order to improve life cycle emissions of freight the use of locally sourced steel rails needs to be investigated and roads need to be sealed.

The Response

Several New Zealand plans indirectly advocate for a reduction of freight transport greenhouse gas emissions. The Government aims to achieve a 50% reduction in greenhouse gas emissions from the 1990 levels by 2050. <ref> Ministry of Business, Innovation and Employment (2011) New Zealand Energy Strategy 2011-2021: Developing our Energy Potential. New Zealand. </ref> The New Zealand Transport Strategy (NZTS) contains the aim to halve New Zealand's greenhouse gas emissions per capita from domestic transport by 2040. One of the five core objectives of the NZTS is to ensure environmental sustainability. The National Rail Strategy was developed under the NZTS umbrella and contains the corresponding action to 'ensure transport choices take into account the environmental benefits that rail can provide'. <ref> McGimpsey P., Havemann J. and Sutcliffe J. (2009) Promoting sustainability in New Zealand's rail system. NZ Transport Agency research report 370. </ref> The New Zealand Energy Efficiency and Conservation Strategy also contains the objective to have a more energy efficient transport system, although specific targets address light vehicle efficiency only. <ref> Ministry of Business, Innovation and Employment (2011) New Zealand Energy Strategy 2011-2021: Developing our Energy Potential. New Zealand. </ref>

The Government has undertaken several initiatives to reduce freight emissions. The primary means of reducing emissions in the energy sector is the Emissions Trading Scheme (ETS). The ETS imposes a carbon tax on fuels that internalises the externality of carbon emissions from the burning of fossil fuels. This theroetically promotes the use of more efficient modes of freight transport by increasing the price of less efficient modes. <ref> Heatley D. (2009) The history and future of rail in New Zealand. </ref> The Energy Efficiency Conservation Authority have also launched a fuel efficiency programme which aims to 'improve fuel efficiency of the heavy vehicle fleet through expert advice and funding assistance'. <ref> EECA Business (2013) online: Transport – heavy vehicles http://www.eecabusiness.govt.nz/heavy-vehicles (accessed 26th August 2013). </ref> The programme provides businesses with trained advisers who can review heavy vehicle fleet operations and advise on where fuel efficiency improvement opportunities exist and how to implement them.

Link to EECA website. The programme's website provides advice on fleet management, driver behaviour, vehicle choice and operational factors.

Rail companies have taken steps to reduce their emissions. KiwiRail state that they 'recognise that they have the opportunity to reduce NZ carbon emissions from transport'. <ref> KiwiRail (2013) online: Our Carbon Emissions. http://www.kiwirail.co.nz/in-the-community/sustainability/our-carbon-emissions.html (accessed 27th August 2013). </ref> They have been monitoring their emissions since 2008 and undertook a comprehensive carbon footprint exercise finishing in June 2010 which found that total emissions were 374,379 tonnes of CO2. <ref> KiwiRail (2013) online: Our Carbon Emissions. http://www.kiwirail.co.nz/in-the-community/sustainability/our-carbon-emissions.html (accessed 27th August 2013). </ref> They are also implementing the use of an 'Energymiser system' which provides real-time advice to train drivers of when to coast, power and brake in order to conserve energy. <ref> Kiwirail (2013) online: Reducing Carbon Emissions from Trasnport. http://www.kiwirail.co.nz/in-the-community/sustainability/reducing-carbon-emissions.html (accessed 27th August 2013). </ref> On a Toll Rail Lyttleton to West Coast route a 9% reduction in fuel use was achieved as a result of fuel-efficient driving behaviour education. <ref> McGimpsey P., Havemann J. and Sutcliffe J. (2009) Promoting sustainability in New Zealand's rail system. NZ Transport Agency research report 370. </ref>

International academic literature recognises that a model shift from truck to rail presents an opportunity to reduce freight emissions <ref> Eom, J., Schipper, L. and Thompson, L. (2012) We keep on truckin': Trends in freight and energy use and carbon emissions in 11 IEA countries. Energy Policy 45: 327-341. </ref> There is controversy surrounding the shift to electrification of rail as it is thought fossil fuels may be displaced by carbon-intensive power generation methods, which could increase emission intensity. <ref> Eom, J., Schipper, L. and Thompson, L. (2012) We keep on truckin': Trends in freight and energy use and carbon emissions in 11 IEA countries. Energy Policy 45: 327-341. </ref> In New Zealand many stakeholders believe that rails greatest contribution to decreasing greenhouse gas emissions from the transport system can be achieved simply by promoting a model shift from higher intensity alternatives, rather than looking at traction alternatives.However it is believed that in order to achieve this model shift several barriers need to be overcome. Cost and accessibility of rail to freight customers needs to be improved as well as performance aspects such as frequency, reliability and speed of service. Most importantly, sustainability factors need to be better integrated into transport funding and decision making. <ref> McGimpsey P., Havemann J. and Sutcliffe J. (2009) Promoting sustainability in New Zealand's rail system. NZ Transport Agency research report 370. </ref>

Health and Safety

Accidents

Some believe that rail is a safe way of transporting goods. Having trains carry freight means that there are less trucks on the road to cause accidents. <ref> Washington State Department of Transportation (2013) online: Train Safety http://www.wsdot.wa.gov/rail/trainsafety.htm (accessed 31 August 2013). </ref> According to the Washington State Department of Transportation, travelling by train is 23 times safer than on the road. <ref> Washington State Department of Transportation (2013) online: Train Safety http://www.wsdot.wa.gov/rail/trainsafety.htm (accessed 31 August 2013). </ref> In specific reference to freight, rail transport experiences one eighth of the fatalities and one sixteenth of the injuries that trucks incur per ton-mile. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> Greene (2012) conducted a study in a region of America with a population of about 100 million and found that predominantly using rail as a means of transporting freight as opposed to truck saved 231 premature deaths. <ref> Greene, M.T. (2012) Pollution-Related Health Effects of Truck-to Train Freight Modal Shifts in the Midwestern United States. Unpublished thesis, Master of Science (Population Health), University of Wisconsin-Madison. </ref> In the United States, railroads have decreased their accident rate by 71 percent from 1980 to 2007 and a further 15 percent since 2009. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> This included the rate of employment casualties falling 80 percent since 1980. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref>

Figure 12 shows the injury rates in numerous job sectors per 200,000 employee hours. RR’s (railroad) as shown is the lowest, indicating that it is a safe job. In comparison, the truck injury rates are about double that of the railroads. This suggests that rail is a safer way to transport freight than truck because there are fewer injuries. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> It could be assumed that these same trends will be shown in New Zealand in relation to injury rates.

Figure 12: Injury Rates per 200,000 Employee hours. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref>

Not only is rail safer than truck freight transport but it is also showing a trend towards becoming safer every year, as shown in figure 13. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> In the United States the Injury rate per 200,000 hours is down 80 percent from 1980 to 2008 and the train accidents per million train-miles is down 71 percent from 1980 to 2008. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> New Zealand KiwiRail’s accident indices have also been trending down. The Lost Time Injury Rates was 6.1 per million hours worked between 2010-2011, which stood at about 8 three years prior. <ref> KiwiRail (2013) online: Health and Safety http://www.kiwirail.co.nz/working-for-us/health-and-safety (accessed 15 September 2013).</ref> Another indicator that has gone down is the Medical Treatment Injury Frequency Rate. It was down to 49.1 per million hours worked when three years ago it was just over 60. <ref> KiwiRail (2013) online: Health and Safety http://www.kiwirail.co.nz/working-for-us/health-and-safety (accessed 15 September 2013).</ref> This is a positive indicator and further demonstrates that rail is a safer way to transport freight than truck.

Figure 13: Rail Accident & Injury rates. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref>

Pollution and Greenhouse Gas Emissions

Air pollution, such as that caused by freight transport has been linked to be a major contributor to health problems such as lung cancer, cardiopulmonary mortality, and is known to have adverse effects on asthma, bronchitis and other respiratory conditions. <ref> Greene, M.T. (2012) Pollution-Related Health Effects of Truck-to Train Freight Modal Shifts in the Midwestern United States. Unpublished thesis, Master of Science (Population Health), University of Wisconsin-Madison. </ref> This pollution can also contribute to putting people at higher risk of heart attacks, some allergies and premature deaths. <ref> The Northern America Steel Interstate Coalition (2013) online: Air Quality and Public Health http://steelinterstate.org/topics/air-quality-public-health (accessed 25 September 2013). </ref> As described in the emissions section, freight transported by truck contributes more heavily to these emissions and pollution than that transported by rail. Therefore it is important to access the difference that this will have in terms of the health of society. In Green’s study in America, a shift from truck to rail freight transport was found to prevent 10,307 asthma cases and more than 180,000 respiratory problems. <ref> Greene, M.T. (2012) Pollution-Related Health Effects of Truck-to Train Freight Modal Shifts in the Midwestern United States. Unpublished thesis, Master of Science (Population Health), University of Wisconsin-Madison. </ref>

Transport of Hazardous Materials

In America, both trucks and trains transport hazardous materials (HAZMAT) but trains are far more effective in delivering these goods safely. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> There has been a trend in the decline of HAZMAT accident rates in the United States, which went down 88 percent from 1980 to 2007 and 39 percent since 2009. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref> There is also a trend in the difference between rail and trucks in terms of safety. In the United States, rail and trucks carry roughly the same amount of these materials but the trucks have 16 times more HAZMAT releases than rail roads. This makes rail roads safer as a means of transporting hazardous materials. <ref> Spraggins, H.B. (2010) ‘The Case of Rail Transportation of Hazardous Materials’, Journal of Management and Marketing Research 3: 1-8. </ref>

Cost of Transport

Effects of Health Issues

Rail freight is better for the economy than truck freight transport. This is demonstrated by the trends in employment and even health costs. As described in the health and safety section, truck freight causes more accidents and health issues due to increased carbon emissions, which in turn means more money is spent on healthcare and more people are having days off work and spending government money rather than earning it. <ref> Greene, M.T. (2012) Pollution-Related Health Effects of Truck-to Train Freight Modal Shifts in the Midwestern United States. Unpublished thesis, Master of Science (Population Health), University of Wisconsin-Madison. </ref> Green’s (2012) study in America showed that switching to rail freight resulted in the prevention of 28,879 days of loss work as a result of illness. <ref> Greene, M.T. (2012) Pollution-Related Health Effects of Truck-to Train Freight Modal Shifts in the Midwestern United States. Unpublished thesis, Master of Science (Population Health), University of Wisconsin-Madison. </ref> A study completed in the United States in 2001 involved comparing the external costs of truck and freight transportation. <ref> Forkenbrock, D. J. (2001) ‘Comparison of external costs of rail and truck freight transportation’, Transportation Research Part A 35: 321-337. </ref> This involved comparing three forms of rail freight to truck. The external costs that were assessed were accidents, air pollution, greenhouse gases, and noise, as shown in table 5. In total the external cost of trucks was 0.86 cent per ton-mile, compared to the rail freight modes, which are 0.24-0.25 cent per ton-mile. <ref> Forkenbrock, D. J. (2001) ‘Comparison of external costs of rail and truck freight transportation’, Transportation Research Part A 35: 321-337. </ref> This indicates that in respect to all external costs, rail freight is cheaper, which means safer and healthier. When looking particularly at air pollution and greenhouse gases, the same pattern is seen. General truck freight costs 0.08 cents in air pollution and 0.15 cent in greenhouse gases, compared to rail, which costs 0.01-0.02 cent in air pollution and 0.02 cent in greenhouse gases. <ref> Forkenbrock, D. J. (2001) ‘Comparison of external costs of rail and truck freight transportation’, Transportation Research Part A 35: 321-337. </ref> This social cost involving air pollution and greenhouse gases means that it is better for people’s health and the economy to use rail freight as a mode of transportation.

Table 5: Summary of external costs of truck and rail freight (1994 cents per ton-mile) 19.png

Issues with Access

Regardless of whether it would be more cost efficient to move freight goods by road or rail, sometimes only one option is available. <ref> Kemp, A., Counsell, K., Chow, M. and O’Fallon, C. 2012. Transport’s proportion of total costs for New Zealand businesses. NZ Transport Agency Research Report 495, 59 pp.</ref> This is the case for many logging companies who have to make use of trucks to carry logs out of the plantation to either mills or ports for further processing. In New Zealand logs are typically only transported by train along two routes; from the central North Island to the Port of Tauranga and from the Upper North Island plantations to Central North Island mills. In all other areas logs are primarily transported by road and even in these North Island areas logs need to be transported by truck to the rail heads, an unavoidable practice that ensures that the logging industry cannot remain truck free. The main cause for the absence of rail tracks to forestry plantations is the remoteness of these areas and the logistical difficulties surrounding building and maintaining tracks in these locations.

There are many issues surrounding the transport of logs by trucks. <ref> Kemp, A., Counsell, K., Chow, M. and O’Fallon, C. 2012. Transport’s proportion of total costs for New Zealand businesses. NZ Transport Agency Research Report 495, 59 pp.</ref> Due to the high size and weight dimensions of logs and low value of logs, transport costs account for around 20-25% of total production costs, causing the logging industry to have the highest transport costs in New Zealand, statistics that are expected to increase with projected changes to the dynamics of the logging industry. Another aspect of the size of logs is the effects that this has on the vehicles used to transport them. Trucks that exceed standard dimensions and weight limits are employed to transport logs over poorly maintained roads. This combination of factors leads to high maintenance costs within the vehicle fleet.

A comparison study carried out between the costs of transporting logs from an Otago forestry block in Wenita to Port Chalmers discovered that transporting the logs by rail would save the central government and the Dunedin City Council up to $7 million in road maintenance and safety. <ref> McGimpsey, P., Havemann, J. and Sutcliffe, J. 2009. Promoting sustainability in New Zealand’s rail system. NZ Transport Agency Research Report 370, 102 pp. </ref> This comparison did not take into account the impacts on other environmental factors such as emissions and noise between the two transport modes but shows that significant savings can be made when considering a select number of areas.

Government Involvement

Rail Budget 2010 and KiwiRail Turnaround Plan

In 2004 the Ministry of Transport released their latest Rail Budget which supported KiwiRail’s Strategic Plan. They announced that $750 million was to be invested over three years in conjunction with the $4.6 billion Turnaround Plan aim to make New Zealand’s rail industry sustainable by 2020 and to be able to support a projected doubling of current volume by 2040. <ref> Ministry of Transport, 2013. http://www.transport.govt.nz/ourwork/rail/railbudget2010/ (Accessed 24/09/2013). </ref> The KiwiRail Turnaround Plan is a ten year strategic plan that aims to increase the sustainability of the rail network. The major aim of this plan and the Ministry of Transport’s contribution to it is to create a financially independent and economically sustainable industry. It is hoped that the increase in investment from the government will allow KiwiRail to increase maintenance of all assets which will in turn allow a more efficient and reliable rail network; attracting more clients which will in turn see a greater economic return. <ref> Ministry of Transport, 2013. http://www.transport.govt.nz/ourwork/rail/governmentpolicyandfundingforrail/ (Accessed 28/09/2013). </ref> The Turnaround Plan establishes five key steps that KiwiRail intends to undertake for implementation of the plan. <ref> KiwiRail, 2010. http://www.kiwirail.co.nz/uploads/Publications/kiwirail-turnaround-plan.pdf (Accessed 28/09/2013). </ref> These aim to reduce transport times and increase capacity along key routes, in particular the route between Auckland and Christchurch, with goals to cut travel times by two-and-a-half hours; improve technological systems; undertake a review of the minor lines and improve neglected lines and close disused lines; to consolidate the Auckland and Wellington Metro systems. <ref> KiwiRail, 2010. http://www.kiwirail.co.nz/uploads/Publications/kiwirail-turnaround-plan.pdf (Accessed 28/09/2013). </ref>

Figure 14: Historic rail expenditure (excluding metro). <ref> National Infrastructure Unit, 2010. http://www.infrastructure.govt.nz/plan/mar2010/34.htm (Accessed 22/09/2013). </ref>

Figure 14 is a graph of historical rail expenditure, which shows a number of peaks and troughs. The most notable trough in expenditure covers the period from 1999 to 2004. This trend may be due to the ownership of rail by a private consortium. The buyback of the rail network by the government was completed in 2008 and this is reflected by an overall increasing trend in expenditure in the years following this as the government put more money into rail in the hope that they will be able to improve state assets. Historically, expenditure has been largely spent on the movement of stock and equipment (yellow sector) and on tracks and other structures (dark grey) whilst the Interislander ferry services, an integral part of the national track network, has received the least expenditure over this time frame.

Emissions Trading Scheme

An Emissions Trading Scheme (ETS) has been set up by the New Zealand Government in an effort to meet international obligations for reducing carbon emissions and lessening impacts on climate change. <ref> McGimpsey, P., Havemann, J. and Sutcliffe, J. 2009. Promoting sustainability in New Zealand’s rail system. NZ Transport Agency Research Report 370, 102 pp. </ref> New Zealand’s transport emissions increased by 64% over the 16 year period from 1990 to 2006. The costs imposed upon suppliers of liquid fossil fuels are passed onto transport operators with the hope that this will encourage more sustainable transport uses which may have the effect of further shifts from truck freight to rail freight. <ref> Ministry for the Environment. www.climatechange.govt.nz/emissions-trading-scheme/ (Accessed 28/09/2013). </ref>

Implications for Sustainability

A study by Transport Engineering Research New Zealand on ways to enhance fuel efficiency highlighted several methods that could be implemented into rail policies to increase fuel efficiency and save costs. <ref> Baas, P.H., 2012. Fleet management commitment to fuel efficiency. NZ Transport Agency research report 482, 65pp. </ref> One unexpected find was that by decreasing peak speeds by up to 8 km/hr, trains could save up to 10-15% of their usual fuel usage and still complete the same journey in the same and sometimes even faster time frames. This would not only reduce operating costs but would also contribute to a more sustainable rail industry. These actions also have wider implications: reducing reliance on fossil fuels can increase economic and energy security by reducing costs. This is due to lessening the need for imported fuels and simultaneously not negatively affecting employment rates. The results of this study can be applied in both the truck and rail sectors of the transport industry and contribute to a more sustainable freight industry in New Zealand. Figure 15 shows a comparison of fuel savings before and after changes were made to increase efficiency.

Figure 15: Comparison of savings made before and after fuel saving strategies were implemented. <ref> Baas, P.H., 2012. Fleet management commitment to fuel efficiency. NZ Transport Agency research report 482, 65pp. </ref>


Fuel efficiency can also be addressed in the operations that occur at the ends of the freight lines. Port Otago Ltd offers a good case study of fuel management practices between ships, storage and the rail.

Figure 16 shows a decreasing trend in the amount of fuel used for every 1000 containers used by Port Otago Ltd over the period from 2008-2010. The graph shows a fluctuating but overall decreasing trend in fuel usage. From 2008 to 2010 fuel usage decreased by 15% as a result of new practices implemented at the port to increase fuel efficiency. The main change to the operating procedure at Port Otago was to consolidate and better organise the machines used to lift containers so that fewer vehicles were needed to lift and move the same number of containers thus using less fuel to achieve the same workload and rate. (Fleet management commitment to fuel efficiency).

Figure 16: Fuel used per 1000 containers by Port Otago Ltd from 2008 to 2010. <ref> Baas, P.H., 2012. Fleet management commitment to fuel efficiency. NZ Transport Agency research report 482, 65pp. </ref>

Case Study: New Zealand's Grocery Industry

New Zealand’s grocery industry accounts for $5.6 billion of the country’s GDP. <ref> Kemp, A., Counsell, K., Chow, M. and O’Fallon, C. 2012. Transport’s proportion of total costs for New Zealand businesses. NZ Transport Agency Research Report 495, 59 pp. </ref> The industry is controlled by two supermarket chains; Progressive Enterprises and Foodstuffs. Goods produced for sale are consolidated in large distribution warehouses before being dispatched to specific regions and supermarkets. Distribution centres are located in Auckland, Palmerston North and Christchurch which means that products that are not delivered directly from the supplier to the supermarket have to first go to one of these centres before being delivered to the supermarket. Transport costs can account for up to 12% of the total operating cost with costs for perishable goods being significantly higher than for non-perishables. Due to the frequency and timeliness of travel needed for perishable goods, these items are most commonly transported by truck, a practice that is unlikely to change due to numerous constricting factors. The dispersion of supermarkets means that road transport is at times the only feasible option for the transport of goods, yet this practice of road transport can mean that freight costs remain high. In some areas however, there is scope to replace truck freight with rail freight. Transporting goods by rail from the supplier to the distribution centre and then to the supermarket is a feasible option for long distance journeys when non-perishable items are being freighted. Using rail transport over truck can reduce congestion in urban centres and provide greater flexibility for handling at distribution centres. In addition, the capacity of rail freight to transport larger loads than trucks can further contribute to reductions in transport costs.

Conclusion

Rail was swiftly recognised as an effective freight transport mode after its establishment in the late 1800's in New Zealand. However to this day rail transports a small proportion of total New Zealand freight compared to road and the use of road continues to grow. Transport greenhouse gas emissions have grown alongside this increased usage and now make up almost one fifth of total New Zealand emissions. Over the past 20 years rail freight emissions intensity has undergone a near half reduction. Rail is now almost twice as efficient as road. Rail provides many health and safety benefits, such as decreased employee injury rates and safer transport of hazardous materials compared to road. In New Zealand the KiwiRail turnaround plan and Emissions Trading Scheme are helping to facilitate a shift to increased rail usage. It can be concluded that there is potential to increase rail freight transport to take pressure off the road mode and to create a more economically viable, socially beneficial and less emission intensive freight transport system.

References

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