Victorian rail freight investment booming

While the governments have spent $1.2bn in track and rail operations, current and proposed business investment exceeded $3bn, particularly in intermodal hubs and associated distribution centres.
The VFLC’s The Growth and Revival of Rail Freight in Victoria report released on February 18th showed government commitment to and private sector appetite for rail freight meant the sector was undergoing a significant revival.
Council chairman John Begley pointed to the Australian Rail Track Corporation's investment in the national inter-capital freight corridors and the Victorian Government's repurchase of the broad gauge track as catalysts.
“Importantly, for every one dollar invested by government the private sector has already invested two dollars – and another $800m in new private sector investment is underway," Begley said.
"Specialised suppliers of rail freight forwarding, new above-rail operators and intermodal hub developers are emerging. The market offering is improving."
The VFLC said heavy congestion costs, greenhouse emissions and higher accident rates are now creating a climate for re-consideration of rail as a co-modal solution alongside road.
“That said, the profits from road transport are still typically higher than the profits from rail transport, so it seems likely that road related congestion, greenhouse and accident costs will increase further in Victoria,” the report said.
“A key question pondered by many in the freight sector relates to strong forecast growth – is there a better way to maintain current supply chain and economic activity while allowing for strong future growth?" Begley said.
“Rail transport would seem to hold the potential to be a significant part of the solution. The need to take practical steps to address global climate change – to reduce the carbon intensity of our economic systems – adds to the appeal of increasing the level of rail freight usage in our economy.”
The report highlights the successes of freight movements in Victoria when road and rail combine together to achieve outcomes for freight customers.
These include set timeframes and windows for port delivery; high capacity movements for bulk products; a solution to heavy container movements; on-site, value-adding logistics that combine with rail-road choice to help future-proof supply chain investment; and lower line-haul costs through rail forwarders able to optimise use of rail.
The VFLC has released the report as part of a broad but detailed examination of the current status of the rail freight sector and what is needed to equip it for an increased role. The Council has also made a submission to the Essential Services Commission’s Review of the Victorian Rail Access Regime, has almost completed an issues paper on rail freight in Victoria (due to be released in March) and is compiling an appraisal of the standardisation of freight lines in the Victorian rail network, which will be part of the bi-annual VFLC Freight Forward report to government to be released this month.

Growth and Revival of Rail Freight in Victoria can be obtained from the VFLC’s website: www.vflc.com.au