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The Forum > Article Comments > Transport logistics: market and efficiency > Comments

Transport logistics: market and efficiency : Comments

By Mike Pope, published 2/4/2009

There are inefficiencies in the transport market which arise from the sub optimal use of vehicles to move goods.

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It sounds like a sensible idea Mike but when you talk about efficiencies you neglect to mention the massive cross subsidy provided to road freight. The road between Sydney and Brisbane is in need of a major upgrade because hundreds of kms are 2 lane light construction. The road was built primarily of compressed road base overlaid with bitumen and is not nearly strong enough for the heavy truck traffic. The new sections are built with multiple layers of high strength reinforced concrete and the cost is many billions of dollars to complete the road. From the governments point of view moving freight onto rail is a much more efficient operation and any process that promotes road freight is going to cost it money.
Posted by Wattle, Thursday, 2 April 2009 10:57:37 AM
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The proposal has some merit but there is, already, a reasonably free market in freight transport. Admittedly it is not quite as open as the one proposed but companies still tender their requirements and take the bid that best suits them. Then both sides would sign a contract for, say, three years, which ensures that the transport provider gets sufficient volume to be profitable. To set up tracks or rail freight services in the hope that enough business can be obtained on this transport spot market tpo justify the investment, seems like a good way to go broke. Not a bad thought experiment but probably best to keep things they way they are..
Posted by Curmudgeon, Thursday, 2 April 2009 1:21:05 PM
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I am dumbfounded that such a market does not exist. It would be so easy to create and finance. All it would require would be one government to agree to purchase a percentage of their freight requirements through the system.

A government could enlist designs either with a competition or paying a selected group of information system designers to come up with different solutions then select one of them to build it. Small fees paid when people used the market would soon pay for the construction and for ongoing development and running costs.

The government could even put up a "sponsored by and initiated by Minister XYZ" on the website for all to see.
Posted by Fickle Pickle, Monday, 6 April 2009 12:20:36 PM
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The point about road maintance is central to this whole debate on market efficiency and environmental impact...Your system Mike assumes that the roads are a given. When a critical volume is reached Marine freight is an economically viable option even againest road subsidised freight. If a regular coastal shipping service can be establised with a contracted critical mass your plan would be definately useful to utilise the excess capacity of ships.
Posted by mawh, Monday, 6 April 2009 12:43:48 PM
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