Private investment delivers a new intermodal terminal in Melbourne, boosting freight efficiency, sustainability, and jobs.
The pandemic and associated constraints in global and domestic supply chains, and now the cost-of-living crisis, have placed a focus on the need for Australia to enhance the productivity and cost efficiency of its freight and logistics networks, operations and facilities.
In a boost to both the Victorian and national supply chains, the Intermodal Terminal Company (ITC), backed by Aware Super, is investing $400 million to deliver an intermodal terminal and IMEX facility in the heart of Melbourne’s northern industrial zone.
Aware Real Estate in partnership with Barings is also developing a major integrated industrial and logistics precinct – called the Melbourne Intermodal & Industrial Exchange (MIIX) – which neighbours the ITC terminal. For the first time in Victoria, future tenants of the ITC facility – called the Melbourne Intermodal Terminal (MIT) – will enjoy the benefits of co-located warehousing. In total, this integrated development will represent a privately funded investment of $1.6 billion in the Victorian freight and logistics sector – the largest in a generation.
MIT will achieve industry and government goals
ITC Chair and industry leader John Fullerton says the intermodal terminal being constructed in Melbourne’s north is progressing well with interstate intermodal and IMEX (port shuttle) operations due to commence in late 2025. He says intermodal terminals play a critical role in the efficient consolidation, storage and transfer of freight between rail, road and shipping, resulting in improved productivity and cost-efficiency for customers in the supply chain.
“Intermodal terminal capacity that’s located where the freight is, can also reduce traffic congestion and accidents, road pavement ‘wear and tear’ and help customers reduce emissions in supply chain operations and related services,” he says.
The terminal will be open to all third-party customers – including above-rail freight operators, freight forwarders, cargo owners and regional shippers – in accordance with a best practice open access regime.
MIT is key to future success of Inland Rail
John adds that the MIT is located to bring the future Inland Rail into the heart of an existing large industrial and logistics precinct in Melbourne.
“As someone who has been deeply involved in rail freight networks and operations for decades, I’m a firm believer that a large part of the success of the future Melbourne–Brisbane Inland Rail will depend on utilising ITC’s intermodal terminal at Somerton. A key premise of the future Inland Rail is to connect freight demand and volumes where they are concentrated,” he says.
Major milestones reached
ITC CEO Mishkel Maharaj says the company has achieved major construction and commercial milestones, including completion of 75 per cent of the project, of which 95 per cent of the Inner Terminal is now built.
“The Inner Terminal features approximately 15 hectares of terminal hardstand and six rail sidings – two standard and four dual gauges (i.e. standard and broad) – to seamlessly provide ITC customers with the flexibility to transfer freight volumes between the Victorian and ARTC rail networks,” he says. “In the future, the Inner Terminal will have the capacity to process 600,000 TEUs each year.”
Once construction of the 45-hectare intermodal is complete, there will be more than 30 hectares of concrete terminal hardstands (equivalent to 14 MCG AFL fields), including 15 hectares at the Outer Terminal, providing an overall capacity to process approximately one million TEUs each year.
Installation of Konecrane rail-mounted gantry cranes – which are electric and can regenerate energy while lifting and loading containers – at the Inner Terminal is due to commence in May.
Mishkel says on the commercial front, ITC has received interest from Tier One organisations and recently entered into an agreement with rail freight operator Southern Shorthaul Railroad (SSR) for the provision of interstate, regional and port shuttle haulage services at the future MIT.
“Over the past two decades, SSR has developed a track record with customers in the intermodal and bulk freight sectors for safe, cost-efficient and reliable above-rail haulage operations,” he says.
MIT in a perfect position for freight customers
Mishkel adds the future MIT is well positioned in the Victorian and national supply chains, including providing future customers like freight forwarders and regional shippers with direct access to major rail and road freight transport connections.
“The terminal’s ability to bring containers via rail directly from Port of Melbourne, Australia’s capital cities, and regional Victoria into the heart of an existing large industrial and logistics zone allows customers to save costs, avoid traffic congestion and lower their supply chain emissions,” he says.
Mishkel says the intermodal terminal provides future ITC customers with the “best of both worlds” – direct access to ARTC’s 7,500-kilometre standard-gauge interstate network and Victoria’s standard- and broad-gauge metropolitan (including the Port Rail Shuttle Network) and regional branch lines.
SSR Owner Jason Ferguson.
Image: Prime Creative Media
“Customers can ‘pull’ imports from the port on rail then repack and ‘push’ them back out across the country also on rail. Additionally, primary producers can use the terminal as a cargo assembly area in preparation for exporting their goods and commodities to global markets via the Port of Melbourne,” he says.
ITC Chief Commercial Officer Julian Zeltinger says approximately 20 per cent of Melbourne’s containerised freight volumes are currently delivered to the northern freight catchment.
“Customers of the MIT will benefit from co-located warehousing at the neighbouring MIIX, customs-bonded storage, an empty container park, and on-site facilities to wash, fumigate and repair shipping containers,” he says.
Julian says the terminal development is the first of its kind in Victoria, unlocking the future of rail freight for all, including for importers and exporters.
“Within the MIT there are a total of nine rail sidings under construction to facilitate the future decoupling and loading/unloading of 600-metre port shuttle services and 1,500- and 1,800-metre interstate freight trains,” he says.
Beyond the immediate terminal precinct, it is estimated there is approximately three million square metres of warehousing capacity already located within a seven-kilometre radius of the MIT.
MIT delivers ESG benefits
ITC Chief Operating Officer, Brendan Gibson, says future ITC freight customers will also benefit from the environmental and social credentials of the MIT, including helping to reduce Scope 3 emissions for end customers in the supply chain like supermarket chains and retail businesses.
“ITC estimates the future MIT will help remove the equivalent of 500,000 truck trips each year off already heavily congested Melbourne streets, roads, and motorways, notably in inner city suburbs surrounding the Dynon and Docklands precincts,” he says.
ITC estimates removing this number of truck trips will help reduce emissions in the traditionally hard-to-abate national supply chain to the tune of 189,000 tonnes each year – equivalent to CO2 emissions from consuming approximately 64 million litres of diesel.
ITC Chief Development Officer Leigh Cook says 200 construction workers are on site in any given week, many of them living in Melbourne’s north close to Somerton.
“Completion of the Inner Terminal in late 2025 will directly employ approximately 20 skilled workers, notably gantry crane and reach stacker operators to load and unload cargo containers.
“With completion of the Outer Terminal, the entire intermodal terminal will employ approximately 60 staff. Other jobs generated by the MIT include freight train crews, truck drivers, forklift operators, freight controllers and dispatchers, and warehouse technicians,” he says.