What Is Congestion Costing the Australian Transport Sector?


Australia’s congestion problem is no secret. Most of our major cities face traffic delays which turn our highways turned into carparks and see hundreds of thousands of citizens sitting stationary on freeways and major roads for hours on end. But what does congestion mean for the transport industry? According to the latest report by BITRE, avoidable congestion is costing Australian a whopping $16.5 billion each year. So, how does this affect the transport sector, and what is being done about it?


BITRE report


According to the Bureau of Infrastructure, Transport and Regional Economics (BITRE), the ‘avoidable cost’ of congestion around Australia’s capital cities hit a record $16.5 billion in 2015. That’s up from $12.8 billion in 2010. This figure is comprised of around $6 billion in private time costs to road users, $8 billion in business-related time costs, $1.5 billion in extra vehicle operating costs and $1 billion in extra air pollution costs.


Unfortunately, this trend shows no signs of slowing down. It’s predicted that by 2030, this cost will rise to in excess of an enormous $30 billion (some data shows that it might be as much as $37.3 billion). With total passenger travel within Australian cities having grown more than ten-fold in the last 70 years, private road users account for 87% of the ‘aggregate urban passenger task’, according to BITRE.



Which cities are experiencing the worst congestion-related costs?


The upper-most projections of $37.3 billion in avoidable congestion costs for 2030 are broken up by city in the following amounts:

  • Sydney: from $6.1 billion to $12.6 billion by 2030
  • Melbourne: Up from $4.6 billion to $10.2 billion
  • Brisbane: Up from $2.3 billion to $5.9 billion
  • Perth: Up from $2 billion to $5.7 billion
  • Adelaide: Up from $1.1 billion to $2.3 billion
  • Canberra: Up from $0.2 billion to $0.4 billion
  • Hobart: Up from $0.09 to $0.16 billion
  • Darwin: Up from $0.03 to $0.07 billion


Transport sector


Australia’s logistics industry accounts for around 8.6% of GDP, which equated to a $131.6 billion contribution to the economy in 2013. The industry also employs over 1.2 million people.


Clearly, congestion affects private road users in the greatest numbers. However, the cost of congestion on the transport sector is significant, to say the least. Although the figures are hard to determine exactly, a study by Stank & Goldsby (2000) can help us to understand the burden of congestion borne by road freight.


“Although truck traffic represents roughly 5 per cent of all vehicle traffic, shippers’ share of the total cost of congestion is considerably greater than 5 per cent because freight shipments are exposed to more sources of delay than most auto traffic because the cost of delay for some shipments may be extremely high.”


It is estimated in the report, that transport and logistics industries bear as much as 25% of the total congestion cost to business. The could equate to roughly $10 billion by 2030, for Australian transport and logistics.


What can be done?


According to then-assistant infrastructure minister, Jamie Briggs in a 2015 interview, the key is investment – from both government and the private sector.


“The current level of public-sector expenditure – especially in the transport sector, which remains largely funded by government rather than user charges – may be unsustainable in the face of increasing budget pressures to fund welfare and health services. The government has been pushing for a partnership between states and the federal government in funding future projects, as well as using private funding in public projects.

“Infrastructure is always going to have a challenge in achieving the need [of the public], and that’s why we have to involve the private sector,” Briggs said.


Alternatively, BITRE’s report suggests that advances in technology may hold the key.


“The estimates of future avoidable costs of congestion are sensitive to expected population projections and the assumed capacity added to urban transport networks over the next decade and a half. Technology options, such as the rapid deployment of semi or fully autonomous vehicles, have the potential to significantly reduce projected congestion costs.”


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