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.”

The divergent future of intermodal in Australia

While increasing freight volumes are putting pressure on infrastructure in some locations, elsewhere limited growth is leading to projects being deferred.

Intermodal terminals were described as the “essential building blocks” for overall rail- based supply chains, in a 2017 report by PwC, prepared for the Department of Infrastructure and Regional Development.

In Australia, these foundational blocks are spread throughout the country. However, they are under varying amounts of stress. In the eastern states, capacity is becoming strained by increases in freight volume. In South Australia and Western Australia, there is considerable room to grow with the existing infrastructure.

These differences were highlighted in recent announcements by state governments, rail, and port operators.

In NSW, the Australian Rail Track Corporation (ARTC) is proceeding with works on the Botany Rail Duplication and Cabramatta Loop Projects to increase freight capacity at the congested Port Botany terminal.

In January, ARTC shortlisted three contractors for the two projects. For the Botany Rail Duplication project, CPB Contractors, Laing O’Rouke, and John Holland are shortlisted. For the Cabramatta Loop Project, ARTC has shortlisted Downer EDI, Fulton Hogan, and John Holland. The formal tender process will be undertaken in 2020 for both projects.

ARTC CEO and managing director, John Fullerton, noted that these projects will grow the potential of freight in Sydney.

“These major projects aim to improve rail capacity, flexibility and reliability for freight rail customers, encouraging more freight to shift from road to rail, and we are getting on with delivering these massive improvements.”

Both projects aim to increase rail capacity and service reliability to and from Port Botany, while increasing capacity across the Sydney freight network. According to NSW Ports’ 30-year Master Plan, 80 per cent of containers that arrive in Port Botany are delivered to sites closer than 40km away. Increasing freight rail frequency will allow for these containers to be moved to industrial and logistics sites in Western and South-Western Sydney.

“Improving freight performance at Port Botany is critical for the economic growth and prosperity of Sydney, NSW and Australia with the amount of container freight handled by the Port set to significantly increase by 77 per cent to 25.5 million tonnes by 2036,” said Fullerton.

“These two landmark projects will strike the balance between rail and road by duplicating the remaining single freight rail track section of the Botany Line between Mascot and Botany and constructing a new passing loop on the Southern Sydney Freight Line (SSFL) between Cabramatta Station and Warwick Farm Station to allow for freight trains up to 1300m in length.

“Once completed, the Cabramatta Loop Project will allow freight trains travelling in either direction along the Southern Sydney Freight Line to pass each other and provide additional rail freight capacity for the network.”

Work on the Sydney freight network will also increase rail’s share of freight, and alleviate congestion on the Sydney road network, highlighted Fullerton.

“Each freight train can take up to 54 trucks worth of freight off the road, tackling congestion and improving the everyday commute in Sydney.”

The Port of Melbourne is also looking at the potential to increase the volume of freight moved by rail from the Port to intermodal terminals in Melbourne’s north and west.

In late January, the Victorian government improved the Port operator’s plans to invest $125 million for the construction of a new on-dock rail.

The Port of Melbourne will introduce a $9.75 per 20-foot equivalent unit charge on imported containers and the funds raised from the charge will directly deliver new sidings and connections for the rail project. Improving rail access to the Port of Melbourne is a legislated condition of its lease, aiming towards a wider push to expand rail freight across Victoria.

The Victorian government said in a statement it is “also supporting the Port Rail Shuttle Network connecting freight hubs in Melbourne’s north and west to the port, new intermodal terminals planned at Truganina and Beveridge, new automated signalling for faster rail freight to GeelongPort and improvements in the regional rail freight network”.

“On-dock rail will make rail transport more competitive, cut the high cost of the ‘last mile’ and reduce truck congestion at the port gate – a big win for Victorian exporters delivering goods to the Port of Melbourne.”

Minister for Ports and Freight Melissa Horne said the project will increase the competitiveness of Victorian industry.

“The Port of Melbourne is a vital part of our multi-billion dollar export sector and agriculture supply chain and on-dock rail will make its operations more efficient for Victorian exporters – removing congestion at the port gate.”

The project is set to be completed by 2023.

DIFFERENT ROUTES IN SA

In contrast to these announcements, the South Australian government has decided to pull back from a plan to move greater volumes of freight via a new network named GlobeLink. An election promise from the Marshall government, in late January, the government announced that the project would be terminated, as the business case did not stack up.

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 South Australian Freight Council (SAFC) welcomed the decision, with SAFC executive officer, Evan Knapp, highlighting that alternative projects would be a better fit for the state.

“The Freight Industry is both pleased and relieved GlobeLink will no longer go ahead, and that instead other options will be explored – we look forward to consultation on the new approach in due course.”

The report also suggested the potential of a new intermodal terminal south east of Adelaide, however Knapp pointed out that the terminal could go ahead without government investment.

“We understand that there is a proponent looking at it now and there’s no reason why that cannot go ahead,” he said. “Cancelling GlobeLink in no way impacts on that element at all.”

Of more benefit to the freight rail sector and the wider community in South Australia, would be the removal of level crossings in the Adelaide metro area, said Knapp.

“Currently we’re happy with the freight rail line, we do believe there is room for some work on level crossing removals towards Adelaide, particularly the level crossing on Cross Road, as you can imagine a freight train going through that crossing at a very slow speed and given their lengths of well over a kilometre does take some time and causes dislocation of a major road in South Australia.”

$125 million in new rail infrastructure for the Port of Melbourne

The Victorian government has approved a new on-dock rail to be built at the Port of Melbourne.

Port of Melbourne Operations will invest $125 million in new rail infrastructure.

The Port of Melbourne will introduce a $9.75 per twenty-foot equivalent unit charge on imported containers and the funds raised from the charge will directly deliver new sidings and connections for the rail project.

Improving rail access to the Port of Melbourne is a legislated condition of its lease, aiming towards a wider push to expand rail freight across Victoria.

The Labor Government said in a statement they are “also supporting the Port Rail Shuttle Network connecting freight hubs in Melbourne’s north and west to the port, new intermodal terminals planned at Truganina and Beveridge, new automated signalling for faster rail freight to GeelongPort and improvements in the regional rail freight network”.

“On-dock rail will make rail transport more competitive, cut the high cost of the ‘last mile’ and reduce truck congestion at the port gate – a big win for Victorian exporters delivering goods to the Port of Melbourne.”

Minister for Ports and Freight Melissa Horne said the project will increase the competitiveness of Victorian industry.

“The Port of Melbourne is a vital part of our multi-billion dollar export sector and agriculture supply chain and on-dock rail will make its operations more efficient for Victorian exporters – removing congestion at the port gate.”

Chairman of the Freight on Rail Group, Dean Dalla Valle, highlighted the industry’s support of the measure.

“Port of Melbourne must also be congratulated for working closely with government and freight companies to deliver this game changing initiative.”

The project is set to be completed by 2023.

Qube train. Photo: Qube

Victoria’s Ultima Terminal will generate millions in new exports

Victoria’s minister for ports and freight Melissa Horne officially opened a rail freight terminal in Ultima, northern Victorian, for exporting to the Asian market.

The QUBE Ultima Intermodal Terminal officially opened yesterday, however trains have been running on the line since at least June according to Fully Loaded.

Recently, the state government spent $23 million on an upgrade of the Manangatang freight line. It went towards the replacement of sleepers over a 90km section of the line in the Ultima region by V/Line. Track formation was also improved with new ballast which will improve the ride quality for trains.

Two trains a week currently service the Ultima facility, but it’s expected that will expand to three or four trains a week.

“This new facility is creating jobs for the local community and is helping to get more freight onto rail – removing around 4,000 truck trips every year from Victorian roads,” Horne said.

QUBE, Pentarch Agricultural and Pickering Transport, through a joint venture, invested $3.65 million in the facility

“Already two trains a week are using this terminal to provide integrated rail solutions to the intermodal and bulk markets, and we hope to expand this when more local products become available later this summer,” QUBE Managing Director Maurice James said.

Hay from local farms is compressed and loaded into containers at the facility. The containers are then put on a train and taken to the Port of Melbourne for export to Asia.

Pentarch markets Australian oaten hay, cottonseed and other grain internationally and the new facility will generate millions of dollars in new exports to Japan, South Korea, Taiwan and China.