The case for inland rail: CBRE

The case for inland rail: CBRE

27 September 2019

Home to a booming population and Australia’s busiest port, Victoria’s growing freight task could soon put the system under stress, according to a recent Viewpoint research report by CBRE.

Handling over three million TEU containers a year, the Port of Melbourne utilises a traditional import and export process to facilitate distribution of freight across Victoria, domestically and across the world.

Truck transport is at the core of the network, with hundreds of trucks flooding local roads and major arterials daily, providing the crucial link between distributors and freight destinations.

The successful development of freight intermodals and record levels of investment in rail infrastructure could be the answer to this search for efficiency, and early collaborators across the supply chain could be the first to experience the benefits.

What is an intermodal terminal?

An intermodal terminal is a location for the transfer of freight from one transport mode to another: for example, between road and rail.

Such terminals facilitate landside transport-logistics efficiencies and play an important role in easing the transport burden on ports, roads and neighbouring areas.

They are also essential in increasing rail freight’s role in the freight transport and distribution system.

As intermodal terminals with links to rail allow for imports to bypass the traditional import-export process, their implementation can substantially reduce road freight requirements, improve port efficiencies and decentralise the freight and logistics system away from congested ports, local roads and regions.

Current state of play

Victoria’s freight network utilises a largely traditional import and export model, heavily reliant on truck transport across various sections of the freight journey.

Within the current and future Victorian rail system, there are three major existing rail networks through which to link intermodals and streamline freight transport:

1. Metropolitan Port-Rail shuttles – Majority handled by trucks via the arterial road network, increased reliance on port-rail shuttles would reduce the reliance on trucks around the Ports.

2. Regional – Largely export trade from regional Victoria and regional NSW, utilising regional rail networks and V/Line controlled rail through to the Port of Melbourne.

3. Interstate – Inter-capital city freight which operates long distances over the Australian Rail Track Corporation (ARTC) network, including the soon to be developed Inland Rail Link.

Inland rail link

The Inland Rail Project is a 1,700km rail infrastructure project that will provide a direct rail link along the eastern seaboard between Brisbane and Melbourne.

To be completed in 2025, the link aims to reduce costs, take trucks off roads and improve supply chain efficiencies, allowing domestic business to be more competitive.

Over $9 billion has been committed by the Australian Government to develop the project, with 70% of the rail line utilising existing rail infrastructure.

Supply chain efficiencies will be improved through the ability to easily facilitate double-stacked trains up to 1,800m long, and as a result, intermodal facilities will need to facilitate these sizes in some form.

For the Inland Rail Project to achieve its ambitions, rail operators, distributors, producers, manufacturers and those that rely on Australia’s freight system are in agreement on the three core deliverables the link should provide, all of which intermodal terminals are a key facilitator:

1. Speed – Deliver freight travel times of under 24 hours from Melbourne to Brisbane, relatively comparable to truck transport currently delivering approximately 21-22 hours

2. Reliability – ARTC has ambitions for 98% reliability, in line with the reliability of truck transport

3. Cost – Deliver a cost benefit over the use of truck and road transport across various legs of the freight journey

Are intermodal terminals viable?

Intermodal terminals are at the core of maximising efficiencies within Australia’s freight network and must be implemented successfully to benefit users along the entirety of the supply chain.

The successful development and uptake of intermodal terminals will be tightly entwined with the development of rail freight transport across Australia, with the cost comparisons between truck and rail transport a driving force behind the attractiveness of such terminals for freight transport facilitators.

Whilst a ‘magic bullet’ may not exist for the immediate economic viability of intermodal terminals, cost is the most crucial consideration, both in cost of the development of the terminal and the cost comparison to road transport.

Secondary to the cost comparison, terminal viability will also be strongly linked to the Inland Rail’s other core objectives: reliability and speed.

Intermodal facilities that can provide reliable and efficient interactions between road and rail will enable Inland Rail (through the ARTC) to meet its ambitions of under 24-hour transit times and 98% reliability, further ensuring interest and investment in their viability from both the Government and Private sector.

Conclusion

The scale of freight volumes trains can facilitate provides a clear picture of the attractiveness of moving from road to rail within the supply chain.

For example, a single 1,800-metre train, double-stacked, operating between Melbourne and Brisbane is equivalent to over 100 B-double trucks.

A fully operational inland freight rail network operating across the Eastern seaboard, with linkages to the existing East-West freight rail of Parkes to Perth, will maximise the efficiency of freight movement across Australia, revolutionising freight supply chains both domestically and globally.