Industry backs Melbourne port rail shuttle plan

VTA, ALC and CTAA welcome funding promise but question raised on timing of commercial viability

Industry backs Melbourne port rail shuttle plan
Chester says the initiative will see larger volumes of freight being moved by rail compared to trucks.


Industry bodies have welcomed the news of plans to improve rail connectivity between the Port of Melbourne and major freight hubs through dedicated rail freight shuttle links.

In a joint statement, federal infrastructure and transport minister Darren Chester and Victoria roads and ports minister Luke Donnellan say the project will deliver a series of freight shuttle initiatives on the existing rail network.

These aim to help move larger volumes of freight compared to trucks and reduce congestion near the port by taking trucks off local roads.

"The Australian Government’s free trade agreements are seeing a boom in exports, which has led to trucks taking more produce and freight to the ports," Chester says.

"This project will provide the ability to shift larger volumes of freight via rail compared to trucks, and reduce congestion on our roads.

"The freight and logistics industry had identified rail’s potential to reduce transport costs by about 10 per cent, with the proposal potentially improving Australia’s competitiveness, which is why the Australian Government is investing $8.4 billion in the Inland Rail project connecting Brisbane and Melbourne."

The $58 million project will get federal backing worth $38 million and state government funding of $20 million.

Donnellan says the governments are committed to share the load of the increasing container task between road and rail.

"Alongside the West Gate Tunnel, 24-hour truck bans in the inner west and the Port's rail access plans, this project will help shift containers from residential streets onto dedicated routes to the port," Donnellan says.

Industry bodies including the Victorian Transport Association (VTA), the Australian Logistics Council (ALC), the Container Transport Alliance of Australia (CTAA) had called on authorities to make more efforts to improve links between freight generation points and significant transport infrastructure such as rail and port in their submissions to the federal National Freight and Supply Chain Strategy inquiry.


VTA CEO Peter Anderson says the port rail shuttle project will boost productivity for operators and ease congestion on inner west Melbourne roads.

"The VTA has worked closely with the Commonwealth and Victorian Government, as well as local groups in the inner west, on ways to improve amenity whilst maintaining suitable access to the Port. Port Rail Shuttle is an essential part of this mix," Anderson says.


ALC MD Michael Kilgariff says moving freight from rail to more commercially-viable locations can improve the overall freight efficiency and reduce road congestion and queuing times at ports.

"ALC has been a consistent supporter of the Port Rail Shuttle project, which will be a significant enhancement to the Port of Melbourne, producing real benefits for freight efficiency in Victoria, and across the nation’s supply chains," Kilgariff says.

"In NSW, the state government is committed to doubling the amount of freight entering and leaving Port Botany by rail, which currently sits at 19.3 per cent.

"NSW Ports is likewise committed to moving 3 million TEU by rail over the longer term.

"There needs to be an equal focus on promoting greater use of short haul rail services for freight movement in Victoria, and today’s announcement is a welcome step in helping to achieve that."

Kilgariff points to Department of Infrastructure and Regional Development's 2016 report Why Short Haul Intermodal Rail Services Succeed, which concluded that regional terminals can secure the traffic volumes required for short haul rail services to have competitive line haul costs.

"The Port Rail Shuttle will build on other significant investments being made in freight infrastructure - including the Inland Rail project, which will link the Port of Melbourne with the Port of Brisbane when fully completed," he says.

"It is also important that  planning work continues to progress the Western Interstate Freight Terminal, to further enhance Victoria’s freight network efficiency."


While CTAA welcomes the project funding, it warns that much work needs to be done before metropolitan rail freight services becomes commercially viable.

CTAA director Neil Chambers says due to inadequate rail infrastructure in Melbourne there has been minimal container movement to and from metropolitan areas of the Port until now.

"There is no doubt that moving more containerised freight to and from the Port of Melbourne and metropolitan intermodal terminals must be part of the future for Australia’s largest container freight port," Chambers says.

"The optimal landside movement of an import container once discharged from a ship involves around six 'lifts' if delivered direct from wharf to customer then direct to the empty container depot for de-hire by road," Chambers says.

"This number of 'lifts' rises with the current situation where many containers are 'staged' through transport yards to take account of the mismatch of operating hours and other logistics management reasons, both the full container as well as the empty.

"This can increase the number of 'lifts' to as many as ten.

"However, unless we can achieve true on-dock rail operations to remove the need for the last mile movement of the containers within the Port to be undertaken by truck or some other form of transfer vehicle, the number of 'lifts' for a typical intermodal operation would be twelve or more.

"Every time you touch the container it costs money, and the current lack of rail integration is the killer from a competition point of view."

To ensure intermodal rail operations are considered as a complete system and "not just a series of disjointed nodes with no adequate integrated port connections and infrastructure", CTAA recommends the following steps:

  • development of the National Freight and Supply Chain Strategy
  • overhaul of Victoria's current freight strategy
  • timely development of Port of Melbourne's rail strategy.

"Truly viable intermodal terminals in Australia and overseas also provide the value added services in situ that reduce local freight journeys and strip out costs for the cargo owner. This is what we need to aspire to through strategically located intermodal terminals in Melbourne’s west, north and south-east," Chambers says.

"I think we need to be cautious that the community isn’t given the impression that rail intermodal operations will be a panacea to the removal of trucks from our roads.

"That won’t be the case, because even if we get this right, which we all hope we will, the future still involves thousands of truck movements to and from the Port, as well as to and from intermodal terminals for final delivery to the end user.

"We need integrated planning that enhances and protects the future viability of road and rail freight, reduces community amenity impacts where possible, but doesn’t harm freight productivity and cost competitiveness."

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