Is traffic congestion strangling your business?

I hesitate to make such a controversial statement on this well respected Blog site, but here goes: I’m a cyclist.

Yes, I admit it – I spend my morning commute sitting high in my saddle, the wind buffeting my garish hi-vis vest as I glide past file after lengthy file of stationary motorists.

The seat-belted sour-pusses rarely seem to share my appreciation for the ‘open’ road. Each morning, in fact, as I huff and puff up a bumper-to-bumpered hill in inner-western Sydney, you can lay short odds that at least one irritated petrol guzzler will pull his car right over to the curb to purposely prevent my passage – just because.

I’m past the point of taking it personally. After all, I get a front-row seat every day to witness the intense frustrations of life in the slow lane. And what’s more, the consequences go far beyond the rising blood pressures of those behind the wheels.

A couple of weeks ago, I’d barely hung up my bike helmet one morning when I settled down to watch Ai Group Chief Executive Innes Willox participate in a live online event: The economy and dollar in an election year. Discussion shifted to the policy priorities for business ahead of the impending Federal Budget and election. With the Government’s infrastructure spend high on the agenda, Innes raised what he called “one of the great emerging issues for business”:

“We’re going to hear a lot about urban congestion over the coming weeks as both the Government and the Opposition try to wrestle with it as a central issue for the election,” he said. “It’s really emerged for us very starkly over the last 18 months as a key emerging issue because our infrastructure just hasn’t kept up, and it’s having an impact on business and productivity.”

By the end of the same week, the NRMA perfectly punctuated Innes’s comments with a report drawing on a survey of 451 of its Business Motoring Members in western Sydney. More than 90% of businesses said their vehicles were faced with worse traffic on Sydney’s roads over the past year, with 38% spending an extra one to three hours sitting in congestion – every day.

And what was this costing them? More than 70% of respondents were paying for and using more fuel; 65% were paying more in tolls to avoid traffic; almost half said congestion alone was causing their vehicles greater wear and tear; 43% said congestion had contributed to a reduction in productivity; 36% had recorded a decrease in staff punctuality; and almost a third had lost sales directly because they had failed to reach clients due to congestion.

“The economic growth of Western Sydney is being strangled by congestion and the region’s incredible potential won’t be reached unless we can get it out of gridlock,” NRMA President Kyle Loades said in launching the report.

“Sydney’s almost permanent peak hour is making it harder for our Business Motoring Members to reach clients. This is not a hypothetical – this is an economic reality that is restricting revenue for many small businesses and hurting the Western Sydney economy.”

It’s a pretty bleak picture – and one reinforced by national research.

Last November, the Federal Government’s Bureau of Infrastructure, Transport and Regional Economics (BITRE) examined trends in the costs of traffic and congestion across each of Australia’s capital cities.

Its headline finding related to the rather elusive concept of the “avoidable costs” of congestion, defined as “where the benefits to road users of some travel in congested conditions are less than the costs imposed on other road users and the wider community”.

These costs relate to extra travel time needed, greater variability in travel time, increased vehicle operating costs, and poorer air quality.

The report estimated the avoidable costs of traffic congestion to be around $16.5 billion for the 2015 financial year, up from about $12.8 billion in 2010. This is projected to grow to as high as $37.3 billion a year by 2030.

In layman’s terms, a finding buried a little deeper in the report may be more telling. Urban routes currently traversed in an hour during uncongested times, it says, could take an average of 28 minutes longer by 2030, due to daily traffic congestion.

While no statistics were readily available, I’m fairly confident that commute times by bike should remain fairly steady in the same timeframe – air quality levels and lung capacity allowing. I just hope we don’t end up bearing the brunt of all that pent-up four-wheeled frustration…

Does the experience of your business reflect the research of NRMA and BITRE? Are you counting the cost of traffic congestion, and have you changed any of your policies or procedures to cut your losses? And where should our governments be directing their funds to make a real difference? Please add a comment below to share your thoughts and start a conversation.

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Graham Turner is the former Editor of Ai Group's Industry magazine, which ceased publication in 2014. He now edits (and moderates) this Blog, together with Ai Group's weekly Email newsletter.

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