The Australian and Victorian Governments are committing significant funds to connect the Port of Melbourne to major freight hubs using the existing rail network, but container operators are warning that the success or otherwise of the concept is in the detail.

Governments come up with the money

Expressions of interest will soon to be sought to deliver a series of rail freight ‘shuttle’ initiatives on the existing rail network by connecting the port to major freight hubs and businesses.

Federal Minister for Infrastructure and Transport Darren Chester said the proposal would take advantage of rail’s ability to shift larger volumes of freight than trucks.

“[We] are seeing a boom in exports, which has led to trucks taking more produce and freight to the ports. This project will provide the ability to shift larger volumes of freight via rail compared to trucks, and reduce congestion on our roads,” Mr Chester said.

“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.”

Victorian Minister for Roads, Road Safety and Ports Luke Donnellan said the initiative will take trucks off local roads in Melbourne’s inner west.

“The Port of Melbourne will remain our primary freight hub for a generation. With container numbers expected to double over the next two decades we need to act now to share the load 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.”

The Australian Government has committed $38 million and the Victorian Government will provide $20 million to the initiative. Funding will be available to upgrade rail connections and improve terminal access.

The devil’s in the detail

The largest conglomeration of container transporters in Victoria the Container Transport Alliance Australia (CTAA) has welcomed the recommitment of $58 million in funding by the State and Federal Governments towards port rail shuttle services in the Port of Melbourne, but has warned that there is ‘much to do’ to make metropolitan rail freight services commercially viable.

“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,” CTAA director Neil Chambers said.

“To date, however, next to no containers move to and from metropolitan areas and the port due to the lack of adequate rail infrastructure and the added costs of using rail for intermodal movements.

“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.”

“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.

“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.

“It’s important, therefore, that the Port of Melbourne complete its rail strategy development in a timely manner, that the state’s overall freight strategy is refreshed, and the national freight strategy finalised, to ensure that intermodal rail operations are considered as a complete system, not just a series of disjointed nodes with no adequate integrated port connections and infrastructure

“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,” Mr Chambers said.

“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.”