freight

Get the freight basics right and benefits will follow

To make the most of infrastructure investments, the playing field for rail freight needs to be evened out, writes Caroline Wilkie, CEO of the ARA.

The confirmation of funding for the Port of Melbourne direct rail line to South Dandenong in August was welcome news for business, industry, and residents in the region.

The direct rail connection to the port forms part of the wider Port Rail Shuttle Network and will make it easier and more cost effective for businesses to access port facilities.

The Federal and Victorian government funding will deliver tangible benefits to businesses in Dandenong’s manufacturing sector and improve the efficiency of port operations.

Ultimately, the project will also take 100,000 trucks off the road, helping give local residents their city back in the process.

In the same month, the NSW government fast tracked approvals for the Botany Rail Duplication and the Cabramatta Rail Loop, putting its support behind greater use of rail within its freight network.

The projects will not only deliver this critical new infrastructure to meet the state’s freight needs but will take 54 trucks off busy city roads with every additional freight train travelling on the Botany line.

That will make a crucial difference as the Port of Botany’s freight task increases by 77 per cent in the 20 years to 2036.

As Minister for Regional Transport and Roads Paul Toole observed when announcing the approvals, these new connections are so important because the more freight is moved on rail, the less congestion there is with fewer trucks on the roads.

These projects are great examples of the difference rail freight can make, and why continued investment is essential to the continued liveability of our cities and towns.

But while the benefits of projects like these are obvious, more needs to be done to ensure the rail sector can meet our increasing freight needs.

While Australia’s freight task is growing – and will continue to grow – the role rail freight plays in meeting this demand has actually declined.

Recent years have seen the rail industry’s share of the freight task eroded by policy settings that favour other modes of transport and frustrate investment in the sector.

As a result, less than one per cent of freight travelling between Sydney and Melbourne is moved by rail – a far cry from the 40 per cent share the rail network maintained in the 1970s.

While the vast expanses of the country have seen east- west connections hold up better, rail freight’s modal share has started to slip there too, with rail now carrying just 54 per cent of the freight task across the Nullarbor.

It is hard to reconcile the declining role of rail freight at a time where the sector needs more capacity than ever before.

Part of the problem is how we price rail freight when compared to road.

While getting trucks off the roads remains a focus in these busy and often congested urban areas, heavy vehicle road reform has simply not progressed.

So, while rail freight access charges are based on maintaining and operating the infrastructure it requires, the road freight industry is not expected to fully cover the cost of maintaining and operating the roads it uses.

As we hear more about the importance of easing congestion, the sustainability benefits of using more rail services and the value of creating city precincts that make it easier for residents to get around, favourable pricing models for road freight is increasingly difficult to reconcile.

We must have a level playing field for all to ensure rail freight can grow to support the increasing demand for freight across the country.

This, together with harmonisation of standards across the country, could enliven the rail freight sector again and ensure it is ready to support the growth of our economy over time.

After all, the industry has shown how much can be achieved under the right settings.

Australia was the first country to move to fully autonomous freight trains when the mining sector adopted the technology to service iron ore mines in the Pilbara.

This capability has become a hallmark of mining in the region and the significant benefits the industry delivers to the broader economy.

Use of rail for bulk commodities has increased, bucking the trend of the broader sector.

With a level playing field and certainty of standards across the country, there is no telling what additional benefits further innovation in the sector could deliver.

But first, we need to get the basics right so that rail freight can compete equally and fairly.

After all, we cannot allow new investment in rail infrastructure that busts road congestion in our cities to be eroded by a policy environment that only encourages business and industry back to the roads in the end.

Patrick and Port of Melbourne sign agreement for rail terminal at East Swanson Dock

Patrick Terminals and the Port of Melbourne have agreed to construct a new rail terminal to enable more freight to be delivered by rail to East Swanson Dock.

The new rail terminal, expected to be completed by mid 2023, will handle up to 200,000 TEUs annually, and provide a direct rail connection between the Port of Melbourne and suburban intermodal terminals, enabling more freight to be transported to and from the port via rail.

“The new facility will provide a direct interface with Patrick’s East Swanson Dock Container Terminal, reducing cost of last mile between the rail terminal and quayside for rail based container movements,” said Patrick CEO Michael Jovicic.

The announcement of the rail terminal is part of a wider push to get more freight onto rail at the Port of Melbourne. The Port of Melbourne is investing $125 million in on-dock rail as part of the Port Rail Transformation Project (PRTP) and this project is a significant part of that, said Brendan Bourke, CEO of the Port of Melbourne.

“The PRTP is a key project of our Port Development Strategy and Our Plan for Rail and is vital to successfully accommodating future growth at the port.”

In August, the Victorian and federal governments announced funding for a new freight rail connection in Melbourne’s South East.

The Victorian government is also providing funding for the Port Rail Shuttle network, which aims to reduce truck movements in metropolitan Melbourne by linking the port with intermodal facilities on the urban fringe.

“This new on dock rail terminal supports the introduction of the government’s Port Rail Shuttle Network, which will reduce truck trips on the Melbourne road network,” said Bourke.

The Patrick rail terminal will be constructed at the Coode Road site and is co-funded with the Port of Melbourne. Patrick is contributing $15m to the project.

Construction is expected to begin in early 2021 and the Port of Melbourne is currently undertaking a request for tender profess for the infrastructure works associated with the Port Rail Transformation Project.

Once complete, the terminal will include two dual gauge 23 tonne axle load sidings of 600 metres and interface with the Patrick international container terminal options.

The agreement is part of the extension of Patrick’s tenure at the Port of Melbourne to 2066. Maurice James, managing director of Qube which owns 50 per cent of Patrick, said in a statement to the ASX the project will enable more freight to be moved via rail.

“The development supports Patrick’s landside efficiency focus and is expected to facilitate the development of metro-based rail shuttle services over the medium term.”

Once complete, the Swanson Dock Rail Terminal will be an open access facility, in line with the Port of Melbourne rail access protocol, allowing Qube and other rail operators to use the facility.

Jovicic said that the terminal will be a key node in the Melbourne freight rail network once new intermodal facilities are completed.

“Over time, it is expected that rail modal share for will increase, with metro rail being a major driver of growth alongside the development of metropolitan inland terminals. Rail modal share and volumes on rail will be dependent on the take up of rail, particularly for metro container movements – which today are dominated by trucks.”

Victoria, Commonwealth fund freight connection between Dandenong and Port of Melbourne

A new freight rail connection in Dandenong South will remove 100,000 trucks of Melbourne’s roads a year.

The new rail line will connect the Salta Properties freight hub in Dandenong South with the Melbourne suburban rail network, allowing shuttle trains to run between the Port of Melbourne and Melbourne’s southeast.

The $28 million project is funded by the federal and state governments, with each contributing $18.3m and $9.7m respectively.

The project will be completed by the Level Crossing Removal Authority as part of the Cranbourne Line upgrade.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the connection would form part of a wider network of freight rail connecting the Port of Melbourne with intermodal facilities.

“The new spur line will connect the intermodal freight terminal at Dandenong South to the Cranbourne Line. As part of the Port Rail Shuttle Network it will help cut the number of trucks on inner Melbourne roads by up to 100,000 each year and support hundreds of jobs during construction and as part of the terminals ongoing operations.”

Victorian Minister for Ports and Freight Melissa Horne said the project would make freight more competitive.

“We’re making rail freight a more attractive option for businesses, and this investment means containers can be transported by rail the entire way from the Port of Melbourne to Dandenong South,” she said.

“It will reduce congestion at the port gate and cut the high cost of the last mile that so often disadvantages containers moved by rail.”

The Port of Melbourne has recently made major investments to improve the capacity of rail to handle cargo. The port authority is investing $125m in on-dock rail, to enable freight to be taken directly from ship to rail and to intermodal terminals such as these.

The Victorian government has also invested in two other port rail shuttles, one to Altona and another to Somerton, with further funding to be announced.

New study to guide investment in Victorian containerised freight rail flows

A new study will look at ways to move freight more efficiently and reduce the number of trucks going into the Port of Melbourne.

Funded by the Victorian government, the Port of Melbourne Container Logistics Chain Study will be the first in a decade and carried out by the Port of Melbourne operator.

The study will look into the flow of containers into the port, trends, and changes since 2009.

With forecast growth of 900 million tonnes in freight in Victoria by 2051, the study will examine the impact and nature of growth in container volumes.

“With Victoria growing rapidly so it’s more vital than ever that we have the detailed information we need to plan for the future,” said Minister for Ports and Freight Melissa Horne.

The study’s findings will inform investment and policy decisions that will enable efficient freight movements via rail.

“The knowledge gained from this study will help us get more freight onto trains and off local roads,” said Horne.

After the previous study was conducted, investments were made in the intermodal freight precinct at Truganina, as well as the West Gate Tunnel.

The announcement of the study follows the extension of the Mode Shift Incentive Scheme (MSIS) and a $125 million commitment to on dock rail at the Port of Melbourne.

CEO of the Port of Melbourne Brendan Bourke said that the research would improve freight supply chains.

“We all need reliable information to support our organisations’ future directions, as well as our collective efforts to ensure our industry continues to underpin the state’s economy and competitive edge.

“We know from stakeholder feedback that the 2009 study has greatly assisted government and industry during the past decade in its business planning and investment decisions,” Bourke said.

Port of Melbourne scheme

Rail freight competitiveness scheme gets a $4m extension

The Victorian government has boosted a scheme that helps to shift freight from road to rail with a $4 million injection.

The funding will extend the Mode Shift Incentive Scheme (MSIS) to 30 June 2021, and takes the total investment in the scheme to $24m over six years.

According to the Victorian government, the MSIS has already taken the equivalent of 28,000 truck trips off Victorian roads and onto rail.

“We’re moving more freight more efficiently and keeping our state connected by reducing rail costs and making it easier to get Victorian products to our ports,” said Minister for Ports and Freight Melissa Horne.

The MSIS provides incentives to freight operators to move more freight via rail. Current recipients of the scheme are Linx Portlink on the Shepparton corridor, Wimmera Container Line on the Horsham corridor, Westvic Container Export on the Warrnambool corridor, and Seaway Intermodal on the Mildura corridor.

Horne said the scheme improves the cost competitiveness of freight.

“This scheme benefits the community by getting trucks off roads which locals use every day and supporting industry through cost-effective movement of freight.”

Chair of the Freight on Rail Group, Dean Dalla Valle welcomed the Victorian government’s decision.

“A big thank you to Minister Horne for listening to industry and giving the scheme a critical lifeline during these unprecedented and uncertain times,” Dalla Valle said.

“The benefits of the scheme stretch well beyond regional freight businesses; the scheme helps to take trucks off local and regional roads, driving better road safety outcomes for the community, and is an investment in the future of regional rail freight jobs.”

Dalla Valle said the extension of the MSIS would benefit regional Victorian businesses.

“Australian regional exporters operate in highly competitive international markets and ending this scheme would have driven up freight costs and severely impacted many regional businesses,” he said.

“By continuing the scheme, the Andrews Government is helping to protect many regional jobs across the freight supply chain and putting the state’s economy on the right track towards recovery.”

The MSIS is one of a number of initiatives to ensure that Victoria’s growing freight task is handled by rail. By 2051, freight volumes in the state are expected to triple, and the government is also investing in improving access to the Port of Melbourne, building new intermodal terminals as Truganina and Beveridge, and funding the Port Rail Shuttle.

Port of Melbourne scheme

On-dock rail upgrades for Port of Melbourne pass final hurdle

The Port of Melbourne will take the next step forward in its Port Rail Transformation Project (PRTP), with the project having met all its preconditions.

The project will begin on June 1, with construction expected to commence before the end of 2020.

The $125 million project will increase the rail infrastructure at the port and provide a new rail operating framework inside the port.

Overall, the project hopes to increase the amount of containers moved by rail, improving operations at the port, said Brendan Bourke, CEO of Port of Melbourne.

“The Port of Melbourne has listened to industry feedback and is responding with a solution that meets the need for increased transparency in rail access arrangements, improved port access and greater capacity,” said Bourke.

“The project embraces these principles and supports the government’s Port Rail Shuttle Network.”

Port of Melbourne has conducted an Expressions of Interest process, and will next begin a Request for Proposal for the infrastructure works required.

CEO of the Australian Logistics Council (ALC) Kirk Coningham, said that the announcement that the project will proceed is welcome for the industry.

“Moving more freight by rail can deliver a range of potential benefits for industry participants, for exporters and for local communities. The construction of new on-dock rail infrastructure at Swanson Dock East will help to realise those benefits.”

By delivering on-dock rail, congestion around the port can be reduced, benefiting both industry and local communities, said Caroline Wilkie, CEO of the Australasian Railway Association (ARA).

“Improving rail access is not just good for the economy, allowing a more efficient transport of containers, but it will reduce road congestion and pollution around the port.”

Coningham also noted that the work will improve movement in the surrounding areas.

“The PRTP will improve congestion around the Port of Melbourne, which is critical for logistics companies moving freight into and out of the port, and also for improving the liveability of nearby residential communities,” said Coningham.

“The PRTP will also help agricultural exporters moving their goods through the Port of Melbourne by reducing their ‘last mile’ costs.”

Both Coningham and Bourke noted that progressing these infrastructure works while the state and country is recovering from coronavirus (COVID-19) will help increase growth.

“The development of significant new freight infrastructure such as that now being progressed by the Port of Melbourne will also help stimulate economic and employment growth, which will be vital in helping Australia to emerge from the COVID-19 pandemic,” said Coningham.

“A rail solution for the port will play a vital role in Victoria’s post-COVID economic recovery with a large construction project supporting jobs as well as supporting the more efficient movement of freight and contributing to a more productive supply chain for decades to come,” said Bourke.

Once the PRTP is complete, the Port of Melbourne hopes to connect Webb Dock to the rail network, which is expected to handle half of Victoria’s export container trade by 2050. Coningham highlighted that governments must preserve the rail corridor for this development.

“It will also be crucial for the federal and Victorian governments to work cooperatively to preserve corridors and make investments that will also permit Webb Dock to be connected to Victoria’s rail freight network.”