Aurizon

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Aurizon's principal activities are the provision of rail transport services to the mining, minerals processing, electricity generation industries, passenger rail, hospitality and tourism, as well as carrying livestock, sugar, grain and other primary products.


The aim of Aurizon's (then operating under the name Queensland Rail) analysed training programs was to improve operational performance, and encourage train drivers to test ideas through use of train driving simulators. The "Train Dynamics Concept Development" course was conducted over a full three day period and hoped to benefit through an improved understanding of train dynamics with a heavy emphasis on good train-handling. Evaluation was undertaken by comparing train drivers' performance before and after the training program.


In evaluating the training program, four measures of performance were investigated. These were the time taken to drive the train, the fuel used, and the "draft" and "buff" forces. Two rail cars are in "buff" when they push against each other and are in "draft" when they pull against each other. Any minimisation of these four parameters would deliver substantial savings for the company.


The results as analysed by Doucouliagos and Sgro (2000) are taken from 60 drivers who had on average 8.5 years of train driving experience and had worked for Queensland Rail for 22 years. For business confidentiality reasons the physical dollar value was not detailed in the analysis with costs and benefits being represented by percentages in the study.


The results indicate that fuel usage was reduced by 6.4% and as a large slice of rail operating costs are made up of diesel fuel costs (can be as high as 20%), it can be safely concluded that the monetary savings are significant. For example a 6.4% reduction in fuel consumption for 20 locomotives would deliver an average annual saving of $1,280,000 to an Australian rail operator. Furthermore if fuel represented 15% (industry average) of Aurizon's operating cost, a 6.4% reduction in fuel consumption would have saved them $11.6million in the 2012/2013 financial year.


As both the buff and draft forces fell significantly (by 21% and 48% respectively) and these reductions will result in reduced shock to rail infrastructure and reduce maintenance costs as a result of better handling of the train, the monetary benefits will also be large.


Though there was a slight increase in time taken to drive the train (0.17%), of those train drivers that showed overall improvement, half recorded a reduction in time. Of the same group (those that showed improvement) fuel usage dropped by 18%, a significant benefit to any rail organisation.
Doucouliagos and Sgro calculated ROI through a cost-benefit analysis as 130 per cent. For every $1 spend on training, $1.30 was returned to the business. However this is considered a very conservative estimate as they noted that the benefits were assumed as a one-off event, rather than as an ongoing benefit (which is most likely) and thus further likely to increase the ROI.