Viterra doubles the size of typical rail movement

Michael Hill, Viterra Operations Manager said it’s the first time Viterra has loaded a 100-wagon train to service interstate demand for South Australian grain. 

Viterra has loaded its largest single rail outturn in response to domestic and international demand.

The 100-wagon train loaded with barley from Viterra’s Crystal Brook, Snowtown, and Gladstone sites, is headed for interstate feedlots.

Hill said the interstate service has effectively doubled the size of a typical rail movement, reflecting the fast rate that South Australian grain is moving.

“We have around 40 buyers in the Viterra system purchasing grain for the domestic and export market, and we’ve seen a significant increase in shipping and rail outturns compared to this time last year,” Hill said.

In addition to the 100-wagon train, Viterra has loaded a further six domestic-bound trains during the same week from sites in its central region with wheat, barley, and canola.

“We’re also continuing to service strong export demand, outturning grain by vessels through our port terminals to various international buyers and markets,” Hill said.

All six of Viterra’s port terminals across the state are loading vessels over March and April with wheat, barley, and canola headed to a range of domestic and export markets.

“We are focused on working with buyers to make it as easy as possible for them to continue accessing grain through the Viterra network and getting it to where they need it,” Hill said.

Meeting the growing demand for intermodal freight

CFCL Australia’s Matthew Roberts told Rail Express about the fleet lessor’s flexible approach, and how it’s responding to growing intermodal demand.

The growing volume of freight in Australia is presenting both challenges and opportunities for the rail sector. A 50 per cent increase in the decade to 2016 is putting pressure on intermodal, containerised freight, as rail is called upon to shuttle freight from ports to intermodal terminals.

In this context, logistics operators are looking to get more goods onto rail, and CFCL Australia (CFCLA) is able to provide a flexible solution, outlines Matthew Roberts, CFCLA rollingstock operations manager.

“Most of our wagon fleet is intermodal, and we hire out our wagons to all the rail operators, and some non-rail customers use them and engage other people to haul trains for them.”

CFCLA’s 1,700 wagons are supported by 78 locomotives. As a company with over two decades experience in Australia and deep roots in the home of rail freight Chicago, the integrated rail services provider is able to give peace of mind to operators and contractors.

“With our intermodal wagons we wet lease, which means we do all the maintenance,” said Roberts. “Like hiring a car, we do everything; the car is registered and we complete the servicing and repairs so all the customer needs to do is phone our 24-hour helpdesk to arrange workshop time that suits their schedule. When someone goes in and bids for a job, they don’t have to hold the wagons for 30 years, they’re only holding them for the period of the contract with their customer.”

The recent openings of intermodal terminals, particularly around the Sydney basin and further afield in NSW, have increased the need for CFCLA’s intermodal expertise.

“We have been contacted by a broad range of shippers and freight owners who are looking for assistance or advice on getting their freight between terminals, which is port to metro and regional terminals and return, there could even be regional-to-regional opportunities”, Roberts said.

When Inland Rail opens in 2025, Roberts also expects demand to increase. Of benefit would be open access terminals along the route.

“Inland rail will hopefully grow the pie by bringing new freight onto rail. The convenience of the Inland Rail line will encourage people who might currently ship by road to port to use rail instead,” he said.

IN-HOUSE CAPABILITIES
CFCLA plans to respond to increasing demand by growing its workshop productivity. Located in Goulburn, NSW and at Islington Railway Workshops in Kilburn, South Australia, the two workshops house the knowledge that CFCLA has built up over 22 years in the Australian rail industry.

“We’ve have locomotive overhaul facilities, so we can do any sort of service on a locomotive that we own. We own 78 locomotives ourselves and we also work on customer-owned locomotives and can complete a full overhaul should the customer desire,” said Roberts.

With freight movements and logistics networks functioning on tight time intervals and schedules, CFCLA enables an operator to keep its cargo moving.

“The idea is that customers passing our workshops can drop off and pick up locomotives with ease, so there’s no downtime,” said Roberts. “They can drop off a locomotive, leave it there for a couple of days for servicing, and take one of our locomotives straight out of the workshop and keep going.”

This kind of servicing and maintenance also lends itself to finding a smarter solution, based on knowledge of what factors are affecting the sector.

“The intermodal sector is picking up, but there’s presently a shortage of 40-foot wagons in the market,” said Roberts. “We’re looking at either modifying or building more 40-foot wagons. We’re looking at a program of cutting some 60-foot wagons into 40-foot wagons and that’s to allow for maximum container weight and not running with empty space on the train.”

By modifying 60-foot wagons to 40 feet, CFCLA is meeting the emerging needs of freight operators needing to fit more containers through congested terminals, such as Port Botany with limited rail infrastructure and minimising train lengths, which reduces costs in things such as access fees.

“On a 60-foot wagon you can put two heavy containers, but using up more train length to do it. We’re looking at how to get more 40-foot wagons into the market. They’re at a premium because the sidings at the port are fairly short and that’s a restricting factor; the time it takes to shunt at the ports as trains become longer,” said Roberts.

These kinds of modifications go some way to ensuring that rail can continue to move larger volumes of freight, even as port terminals are constrained in siding space.

“A lot of infrastructure owners seem to have built short sidings, around 600 metres long,” said Roberts. “The trains are getting longer and longer but the infrastructure at those places is not.”

Already, those freight operators that CFCLA is working with are putting in requests for CFCLA to provide more, shorter wagons, a service that CFCLA can offer because of the flexibility enabled by having its own workshops.

“We’ve been working with Crawfords Freight Lines and they have a demand for more 40-foot wagons, and also Bowmans Rail in South Australia, they’ve got a demand for more 40-foot wagons,” highlighted Roberts. “They can still carry the freight on longer wagons, but you can’t put a third maximum loaded container on the wagon making the train longer.”

Work for both of these clients will be handled by CFCLA itself.

“Our own workshops will do the work, our own workshops will make the modifications,” said Roberts.

SAFETY AND COMPLIANCE: THE BACKBONE TO INTERMODAL FREIGHT
To continue to responsively meet the demand of rail operators, CFCLA sees an ever-growing need for workshop capabilities.

“We’ll have to look at expansion of the workshop sector. If the sector grows, we grow with it, so we will have more intermodal wagons for the increasing traffic,” said Roberts.

CFCLA’s workshop staff will bring to intermodal wagons their expertise in a variety of rail operations, highlighted Roberts.

“We do all types of rail maintenance work; whether it’s rail equipment that is used out on the line for track maintenance, or passenger cars for the Ghan and Indian Pacific, including wagons and locomotives.”

Beyond the range of jobs able to be completed, what distinguishes CFCLA’s workshops is the intensive safety and compliance regime that is applied from the shop floor up to senior management.

“On the subject of safety, it goes without saying there is no compromise as without doubt rail is a risk management business,” said Roberts.

“We have a very strong safety management system with the regulator, the Office of the National Rail Safety Regulator. They visit and audit us three times a year or more. Customers can come to us, knowing that the regulator visits, checks what we’re doing, visits the workshops, and comes into the office and looks at all our records. We need to demonstrate we are competent at what we do.

“Where it does count for maintenance is the shop floor. The guys on the shop floor have access to the documentation because there is quite a bit of documentation on how to change a wheel, how to measure a wheel even, so that everything is recorded and completed properly.”

Implementing these standards is an experienced and specialised workforce, many of whom come to CFCLA with a background in rail, and if not are trained by CFCLA to become part of what Roberts described as a “family”.

“We try and treat everyone like we would our own family, so our CEO knows people on the shop floor by name and they know her. We talk to each other.”

In sum, noted Roberts, “what we really do is simple – we have workshops wagons and locomotives – we just try and do that well”.

Modal shift a key Forum focus

Australian Logistics Council (ALC) CEO Kirk Coningham talks about the goals of the ALC’s upcoming Forum.

A key challenge for Australia’s freight rail sector in 2020 is to demonstrate how boosting rail’s share of the freight task will enhance the efficiency, safety and sustainability of freight movement through supply chains.

Western Sydney is fast becoming a showcase for what can be achieved in this respect, through the establishment of the Moorebank Intermodal Terminal – a facility that will help drive modal shift and alleviate road congestion in Australia’s largest city.

To bring national attention to these developments, the Australian Logistics Council has decided to stage its signature annual event – ALC Forum 2020 in Western Sydney on March 18-19.

The event will connect business leaders, government representatives, investors, infrastructure owners, educational institutions and leading logistics companies with the business opportunities that now abound

in Western Sydney through Australia’s supply chains.

ALC Forum 2020 will present attendees with the chance to connect with those who are designing the future – and make sure their businesses understand what that future means for them.

ALC Forum 2020 will explore how some of the best-practice approaches to planning, building and optimising freight infrastructure in Western Sydney can be deployed across other parts of Australia, enhancing the efficiency, safety and resilience of the national supply chain.

Other elements of the ALC Forum 2020 program will discuss the challenges and opportunities for the freight sector nation- wide in productivity, safety and building a sustainable workforce.

There will also be insights from leading political figures, researchers and major industry figures as they share their perspectives on emerging trends in freight movement, and discuss the policy and regulatory reforms needed to accommodate a freight task that will increase by 35 per cent by 2040.

This is the one industry event that connects the whole supply chain – service providers, infrastructure owners, investors and customers – in the heart of Australia’s fastest- growing economic region.

To be part of it, visit www.austlogistics.com.au/ALCForum2020

scenic

KiwiRail grows revenue amid modal shift

KiwiRail has increased its revenue for the half year ending on 31 December 2019, despite what group chief executive Greg Miller called a “difficult environment”.

“We are pleased we have held the revenue line in a difficult environment that included an economic downturn in multiple markets, along with natural events that damaged the network. Despite these challenges, we saw our import/export business grow by 5 per cent compared to the previous half year,” said Miller.

The reported revenue for HY20 was NZ$333.6 million ($319.3m), a 3 per cent improvement for this period.

Miller highlighted that rail in New Zealand, and KiwiRail in particular, was going through changes.

“KiwiRail is in a transitional phase that will allow it to play a critical part in an integrated transport system that will deliver long term benefits for New Zealand,” he said.

New Zealand has made large funding commitments to rail infrastructure in the country, to increase rail’s share of both passenger and freight movements. In February, the government announced over $100 million in investment in Northland rail freight, this followed more than $200 million in funding for services in Wellington and Auckland.

“This is a watershed year for KiwiRail, as we start the transformation of our business. The Government has made a huge commitment to rail, and the investment that is being made in our network and in our rolling stock will position us well to meet the current and future demand of our customers,” said Miller.

Additionally, in the last year safety figures also improved, with the lowest number of collisions between vehicles and trains on record.

Work carried out in HY20 included the launch of the design for an intermodal freight hub in Palmerston North, work on double tracking the Hutt Valley Link, the arrival of 450 wagons as part of the rollingstock replacement project, and revitalisation of the Hillside workshops. KiwiRail has adopted the use of building information modelling (BIM) for horizontal construction for the first time, in the construction of the Trentham Underpass.

At the end of HY20, KiwiRail recorded a loss of $33.7m. Freight made up the bulk of the revenue, with $200.4m in revenue, while expenses included salaries and wages, materials and supplies, fuel and traction electricity, and incidents and insurance. Downturns in volumes were driven by market conditions in forestry and domestic markets, as well as flooding at Rangitata and a landslide causing a line closure at Omoto.

ALC Forum 2020: Your future in focus

Success in any business starts and ends with the extent to which an organisation meets the expectations and needs of its customers.

As headwinds increase across the freight and logistics industry it has never been more important to grasp rapidly evolving client needs and position our businesses to deliver. From the “where is it now?” demands of individual e-commerce customers to the increasingly sophisticated expectations of large-scale clients, we must find ways to meet the demands of customers that are increasingly attuned to rapid delivery, and unforgiving of those who prove unable to provide it.

80 per cent of Australians now engage in some degree of online shopping, and that figure is expected to continue growing exponentially.

For the logistics industry, a singular challenge associated with this growth is that household consumers increasingly expect delivery to be part of the advertised price.

Already, around 65 per cent of purchases come with ‘free’ shipping, and research suggests that close to 60 per cent of Australians will abandon an online shopping cart if presented with higher-than-anticipated delivery costs when checking out.

At the same time, the personal ethics of consumers – particularly among younger cohorts – are influencing purchase decisions. Today, customers actively seek out information regarding the freshness and provenance of the food on their tables. This is especially true of increasingly sophisticated markets in South East Asia; a region that Australian producers are geographically well-placed to service.

These consumers also want to feel reassured that the products they use in their day-to-day lives have been transported to them in a way that minimises environmental impacts, from packaging to pollution, from waste reduction to carbon emissions. Responding to and reconciling these competing demands – better and faster services at lower environmental and dollar cost – are an enormous challenge for the logistics industry.

Successfully and efficiently meeting the challenge begins with focussing on the future and ensuring that Australia is equipped with high quality freight transport infrastructure that embraces technology and facilitates the faster, safer and greener movement of freight through supply chains, whether it is destined for domestic consumers or for export markets.

It is rare for a genuine greenfield opportunity for a globally-significant freight and logistics hub to emerge in a major Australian city. Yet, that is precisely what is now emerging in Western Sydney – and the Australian Logistics Council is preparing to showcase it as part of ALC Forum 2020.

For the first time, we will present the nation’s premier logistics industry event in this flourishing economic region that is already home to one in ten Australians – and is set to attract another half a million residents by 2031.

On March 18-19, ALC Forum 2020 will connect business leaders, government representatives, investors, infrastructure owners, educational institutions and leading logistics companies with the business opportunities that now abound in Western Sydney through Australia’s supply chains.

With freight infrastructure including the Moorebank Intermodal Terminal and Western Sydney Airport set to transform supply chains, ALC Forum 2020 is your chance to connect with those who are designing the future – and make sure your business understands what that future means for you.

With an estimated two thirds of the world’s population within half a day’s flight from Western Sydney, the new airport is set to become a key gateway for Australian producers taking their goods to emerging international markets.

ALC Forum 2020 will explore how some of the best-practice approaches to planning, building and optimising freight infrastructure in Western Sydney can be deployed across other parts of Australia, enhancing the efficiency, safety, sustainability and resilience of the national supply chain.

Other elements of the ALC Forum 2020 program are set to examine the challenges and opportunities for the freight sector nation-wide in productivity, safety and building a sustainable workforce.

By attending, you’ll hear insights from leading political figures, researchers and key industry leaders as they share their perspectives on emerging trends in freight movement and discuss the policy and regulatory reforms needed to accommodate a freight task that will increase by 35 per cent by 2040.

The program will also drill down to examine specific issues relevant to freight movement across all modes – road, rail, maritime/ports, and air – as well as diving into policy matters that cut across all forms of freight transport, including competition policy, land use planning and the impact technology is having on day-to-day operations.

ALC Forum 2020 is the one industry event that connects the whole supply chain at the most senior levels – service providers, infrastructure owners, investors and customers.

If you only make one investment in the future of your business or career in 2020, this should be it.

Be part of the conversation that sets the future of your industry.

Visit www.austlogistics.com.au/ALCForum2020 today to secure your place.

Government-industry group formed for rail freight in Victoria

A joint government and industry group will advocate for the Victorian rail freight sector.

The newly formed Rail Freight Working group will combine government agencies, freight and primary industries to identify rail freight network priorities.

“Our working group will look at the entire freight supply chain – from farm to port – and make it easier for producers to get Victorian goods to the world,” said Victorian Minister for Public Transport Melissa Horne.

Chairing the group will be Victoria’s Rural Assistance Commissioner, Peter Tuohey, and the group will also include representatives of Victorian Farmers Federation, freight organisations, and Victorian government bodies including the Department of Transport, VicTrack, V/Line, and representatives from ports.

“We’re keen to be involved in this great opportunity to work with government and industry experts to push forward with key rail projects for Victoria,” said Tuohey.

“This new group will give operators and farmers a voice at the table as we continue investing in important Victorian rail freight projects to boost our export power and support regional jobs,” said Horne.

A number of freight rail projects are currently underway in Victoria, including intermodal terminals, port rail shuttle, the Murray basin Rail Project, and the Shepparton Rail Freight Planning Study. Victorian Minister for Transport Infrastructure Jacinta Allan said that the group will contribute to the growth of rail freight in the state.

“We’re working with industry experts to shape the future of Victoria’s rail freight industry, building its capacity and supporting Victoria’s vital export sector.”

NSW EPA trying to put the brakes on rail freight

Draft changes to NSW environmental standards could end regional branch freight lines, warns an alliance of rail industry leaders.

The joint letter signed by freight operators, farmers, and grain growers, and seen by Rail Express, responds to draft NSW EPA standards for rollingstock emissions and noise.

The draft standards set a noise ceiling of 85 decibels, a similar volume to a lawnmower, which would rule out diesel locomotives of the type used to transport grain from silos to port.

The 48 Class locomotives which service these branch lines have a low axel load of 12.5 tonnes, and are able to run on the older steel track which are restricted to locomotive axle loads of 17 tonnes.

The letter outlines that rather than improving environmental outcomes, the restrictions on noise, if implemented would force grain to be transported by trucks. The authors write that this could lead to an extra 25,000 B-double trucks on a “conservative” estimate. This would generate a 500 per cent increase in CO2 emissions compared with rail freight.

“In short, proposed new EPA environmental standards for diesel locomotives will significantly increase net [greenhouse gas] emissions in regional NSW,” write the authors. “This is a perverse outcome.”

Other costs include increased road accidents and fatalities and job losses of locomotive drivers and seasonal silo workers.

Additionally, by forcing grain onto trucks, the cost of exporting grain would increase, placing pressure on farmers’ margins at a time when drought is impacting upon agricultural profitability.

Emissions standards proposed by the NSW EPA also place a restriction on rail freight. While emissions kits can be installed in diesel locomotives, the cost of installing them would be prohibitive and would increase the consumption of diesel by five per cent, increasing greenhouse gas emissions. The weight of these emission kits can also push a locomotive over the axel load threshold.

The signatories to the letter are:

Dean Dalla Valle, Pacific National CEO

Klaus Pamminger, GrainCorp COO

Dick Honan, Manildra Group chairman

Jason Ferguson, Southern Shorthaul Railroad director

Maurice James, Qube Holdings managing director

Matthew Madden, NSW Farmers Association Grains Committee chair

Danny Broad, Australasian Railway Association chair

Geoff Smith, SCT Logistics managing director

Luke Anderson, Genesee & Wyoming Australia CEO

Anthony Jones, LINX Cargo Care Group CEO

Ian Gibbs, CF Asia Pacific / CFCL Australia executive chairman

Victorian Intermodal freight hub seeking a developer and operator

Development Victoria (DV) is seeking a developer and operator of the Ballarat intermodal freight hub terminal.

The Victorian Government is requesting expressions of interest to develop the intermodal freight hub on the Ballarat to Ararat railway line which is part of the Ballarat West Employment Zone (BWEZ).

Development Victoria said the BWEZ will allow freight and logistics enterprises to have exceptional access to road, rail, and aviation infrastructure. The freight network will link Melbourne, regional and rural Victoria, Adelaide and the ports of Melbourne, Geelong, and Portland.

It is proposed that the successful respondent will take on design and delivery risk, demand and operational cost risk, manage the commercial return based on these risks and the services provided.

Operational arrangements are likely to be effected through a lease agreement with VicTrack.

Federal government funding of $9.1 million was provided in the 2014 federal Budget for the development of the facility. Potential additional funding from the State via DV will be made available if required.

There is some flexibility around the physical configuration of the Facility to allow for rail siding (either linear or loop), and it is expected that the successful respondent will have operational access to the connected rail stub and associated signalling which will be delivered by the State up to the eastern boundary of the Facility connecting from the main-line.

The civil works for Stages 1 and 1B of BWEZ are complete with a large percentage of land having been sold. 

The head of Rail Freight Alliance has publicly said Victoria will only benefit from the proposed intermodal freight hub once the Murray Basin Rail Project is complete.

The Murray Basin Rail Project (MBRP) is improving key freight centres in Victoria and encouraging competition and private investment in the rail freight network.

MBRP stated that an increased axle loading will allow higher volumes of product to be safely freighted across the network, allowing trains to carry up to 500,000 more tonnes of grain each year.

The first stage was completed in 2016 and freight trains have returned to the Mildura line and to the reopened Maryborough to Ararat line. V/Line crews are working to finalise and bed in the track to complete stage 2 of 3 for the project.

Catherine King, federal member of Ballarat and shadow minister infrastructure, transport and regional development said the BWEZ facility is located alongside existing road and rail infrastructure, enabling the freight hub to connect with more locations.

“A truck will be able to come in straight off the Western Highway and either head in to a manufacturer or connect up with the rail line and deliver products further afield,” she said.

“The prospect of future infrastructure upgrades to the adjoining Ballarat Airport site will open up even more opportunities across the Ballarat region, but this will only come with support from governments at a state and federal level.”

Respondant registration closes on March 3 and EOI submission must be made by March 13, closing at 3pm.

SA government to not proceed with GlobeLink

The South Australian government has terminated the GlobeLink project.

The proposed project would comprise a road and rail corridor behind the Adelaide Hills, which would connect the National Highway and the rail link from Victoria to Northern Adelaide. The project would have also included an intermodal export park and freight-only airport at Murray Bridge.

The SA government commissioned KPMG to produce a business case for the project, which found that rail freight in the corridor would decline.

Minister for Transport, Infrastructure and Local Government, Stephan Knoll, highlighted that investment in rail freight would not be of economic value for the state.

“Particularly, with respect to the rail component, the report highlights that limited and declining volumes see limited relative economic benefit for the state,” he said.

“Therefore, with rail volumes unlikely to increase sufficiently in the future, the benefits of a new rail corridor are very marginal.”

The KPMG report found that the benefit cost ratios for the initial rail corridor is 0.08, a value of 1 is where a project would break even.

The report highlighted that while rail freight on the Perth – Melbourne route will grow by 1.9 per cent, in the Adelaide – Melbourne corridor rail will remain flat.

“Since the last investigation into an alternative rail alignment undertaken in 2010 (The Adelaide Rail Freight Movement Study), demand has been more subdued than previously estimated and capital costs have increased.”

The report recommended that increases to productivity should focus on existing road and rail corridors, and that the state government support a market-led approach for increasing intermodal capacity to the east of the Adelaide Hills.

“The report does highlight that the intermodal export park could provide improved connectivity and economic benefits to the state, however that would also have to be driven by private sector investment at that site,” said Knoll.

Rail ready to carry logs to Napier Port

The opening of a new log yard in Wairoa will see regular log trains running between Wairoa and Napier Port, in New Zealand.

Chief operating officer of KiwiRail, Todd Moyle, said that trains will run on the weekend.

“Moving forwards, now that our logging yard consents are in place, we will usually run two trains a week, on Saturdays and Sundays,” he said.

Having the new facility in place will also reduce the use of road freight for the movement of logs, with benefits for the environment.

“Each train could take up to 50 long distance truck hauls off the road between Napier and Wairoa, with 66 per cent fewer emissions per tonne of freight carried by rail compared to trucks,” said Moyle.

Forecasts indicate that the demand for these freight rail services will grow.

“Growing this business will assist local businesses to harvest and transport large volumes of logs, help bring profitability to KiwiRail, benefit the East Cape region with less congestion and road wear and tear, and bring added benefits from lower emissions,” said Moyle.

Funding for the project was sourced from the NZ government, indicating the level of support for the rail industry in NZ, said Moyle.

“The Government’s allocation of $6.2 million to the project through the Provincial Growth Fund is a recognition of the proven benefits rail brings.”

According to general manager commercial at Napier Port, David Kriel, the rail line will grow the region financially.

“It’s great to be able to assist in offering our Wairoa customers a safe, direct, and sustainable alternative to trucking logs via State Highway 2, and it will really help to unlock the economic potential of the Wairoa region.”