Budget leak reveals $300m for Port Botany rail duplication

The Australian Logistics Council (ALC) has welcomed an announcement that next week’s Federal Budget will contain $300 million to duplicate the freight rail line from Port Botany to Enfield as a major step forward for enhanced supply chain efficiency.
The funding forms part of an intergovernmental agreement signed in Parkes, NSW, between Ministers representing the Federal and NSW Governments. The agreement is a seminal moment in the progress of the Inland Rail Project that will form the backbone of the nation’s supply chains in the years ahead.
“ALC has been calling for the duplication of the freight rail line at Port Botany, as part of the Inland Rail Project, for a significant period of time. It was again identified as an urgent priority in ALC’s 2018-19 Commonwealth Budget Submission, and it is very pleasing that the Federal Government has now come to the party,” said ALC managing director Michael Kilgariff.
“Improving freight rail links into Australia’s major ports and boosting the use of short-haul rail from ports to intermodal terminals is essential in the drive to enhanced supply chain efficiency and safety, as outlined in Freight Doesn’t Vote, ALC’s major submission to the Inquiry Into National Freight and Supply Chain Priorities.”
“Currently, around 444,000 TEU per year moves to and from Port Botany by rail, and this continues to grow. Duplicating the freight rail line at Port Botany will allow NSW Ports to realise its objective of moving 3 million TEU annually by rail over the long term.”
“Ensuring efficient freight rail linkages to our ports and intermodal terminals is another critical piece of the Inland Rail puzzle, if we are to reap the full economic and efficiency benefits from the substantial public investment being made in the project,” Mr Kilgariff said.
Is it worth doing?
Ardent critic of the project Greg Cameron is not convinced, believing neither the Port Botany duplication nor the whole of the Inland Rail Project are worth continuing.
“If Botany is a commercially viable container port, why does the NSW government charge a fee of $150 per container at the Port of Newcastle, which it pays to Port Botany lessee, NSW Ports?” Mr Cameron said.
“A competing container terminal at Newcastle also makes the Inland Rail Line commercially unviable, because it will win container business from northern NSW. This explains why state and federal governments decline to acknowledge that the Newcastle container fee is anti-competitive.”

Qube's Moorebank hub hits milestone

The development of Australia’s largest intermodal freight hub – Moorebank Logistics Park (MLP) in Sydney’s Southwest – is on track, according to Qube Managing Director, Maurice James.
As of this month, the developer has reached an “in-principle agreement” with a second tenant for warehouse space, with the client reserving 150,000m² of land at Moorebank for development up to seven years, according to Australian Financial Review. Last year, it secured commitments from Target Australia and Qube Logistics, representing a commitment of 80,000sqm, or just 10 per cent shy of its total warehouse capacity.
The developer is confident there will be continued traction with tenant interest in warehouse space at MLP, but they will be “selective” in their choice of tenants, focusing on securing tenants that drive “significant volumes” of containerised freight.
“We are delighted with this arrangement with what we expect will be a long-term client of the MLP”, said James. “This agreement highlights the substantial flexibility that Qube has to structure arrangements with prospective tenants that meet their particular requirements without adversely impacting the commercial returns from the project.”
Despite the complex nature of the MLP planning process – which involves Commonwealth entity Moorebank Intermodal Company (MIC), in addition to multiple NSW state agencies – Qube has stated that the precinct development is keeping to timeline.
The company has reported that the construction of the precinct infrastructure and stage 1 of the import-export (IMEX) rail terminal is underway and that operations are “on track” to “commence in the first quarter of calendar 2019”. They also gained planning approval in late January 2018 for Moorebank Precinct East – Stage 2, which was a key requirement to enable the timely construction of the initial warehouses.
Qube is expecting significant long-term earnings with the MLP development, however, has pointed out their focus is on “substantial value creation rather than short term earnings”. The developer reported a decline of 5.4 per cent to the interim net profit, with a total of $45.2 million after tax.
James said that Qube had performed a “solid first half,” having finalised major tenant agreements for Moorebank and secured an interim dividend of 2.7 cents per share.
While the developer is confident that they will deliver an increased underlying net profit after tax for the latter part of the 2018 financial year, the continued achievement of milestones required for the operation of MLP in the first quarter of 2019 is dependent on New South Wales planning approvals and the receipt of these required approvals from MIC.

Linx Cargo Care to operate Enfield Intermodal Terminal

Logistics infrastructure company Linx Cargo Care Group has successfully bid to operate the Enfield Intermodal Terminal in Western Sydney, which is currently operated by Aurizon.
Linx will lease and operate the NSW Ports–owned, 15.1-hectare intermodal terminal located 18km from Port Botany, west of Sydney.
Linx will operate a port shuttle service between Enfield and Port Botany to reduce traffic congestion in Sydney, ahead of a forecasted increase of 400 per cent in truck traffic in the Port Botany area by 2030.
“Given the forecast for such a significant increase in road and rail congestion across Sydney over the next decade or so, Linx is committed to working closely with the New South Wales state government to develop an effective and achievable solution that will reduce the impact of increased freight movements across the city,” said Anthony Jones, CEO, Linx Cargo Care Group. “Linx has been building its rail capabilities for the past year in readiness for an opportunity like this.”
He added that part of the solution could include the duplication of the freight rail line between Port Botany and the interstate corridor mainline.
The Enfield Intermodal Logistics Centre includes the intermodal terminal, warehousing, and buildings with vacant land for the development of rail-related warehousing, freight forwarding, IMEX (Import and Export), transport and distribution facilities.
“Linx is currently working closely with NSW Ports to support the development of a freight hub on the land surrounding the Enfield Intermodal Terminal,” added Jones.
Marika Calfas, CEO, NSW Ports, said one of NSW Ports’ key objectives is increasing the number of containers moved by rail to and from Port Botany.
“Linx are well placed to expand the intermodal and rail services at the Enfield ILC and grow the rail mode share to and from Australia’s premier port,” she said.

Fremantle Port rail subsidy increased

Western Australia’s McGowan Government has implemented financial incentives to reduce truck congestion and get more freight on rail to Fremantle Port.
As committed prior to the last election, the container rail subsidy increased from $30 to $50 per Twenty-foot Equivalent Unit (TEU) from 1 January 2018.
The plan aims to reduce truck traffic on roads around Fremantle Port by encouraging more freight on rail.
The Western Australian Government’s integrated plan for freight and trade includes a target to boost rail mode share to 20 per cent – an increase of approximately five per cent.
The subsidy will be paid for all loaded containers that move between North Quay Rail Terminal (NQRT), Forrestfield and Kwinana, as well as for containers filled with hay received by rail at NQRT for export.
“Increasing the rail share for container haulage is one of several initiatives to improve efficiencies at the Inner Harbour to facilitate trade growth until additional port facilities are viable,” the Government said in a statement, adding that others include supporting the development of the Westport: Port and Environs Strategy; development of the broader rail supply chain, including intermodal facilities; and upgrading road infrastructure linkages around the inner harbour.
“The rail service plays a significant role in achieving greater efficiency in the container supply chain as well as improving community amenity and environmental benefits along metropolitan roads that link to Fremantle Port,” said Western Australian Transport Minister Rita Saffioti.
“That is why the McGowan Government has delivered on its election commitment to increase the container rail subsidy to encourage more container movements on the port rail service.”

Container expert SCF signs on for MEGATRANS2018

SCF, one of Australia’s largest container providers, will exhibit at multi-modal supply chain event MEGATRANS2018, which takes over the Melbourne Convention and Exhibition Centre 10-12 May 2018.

SCF specialises in new and used container hire, sales and design.

The company supplies the Australian transport, resources, construction, defence and chemical storage industries, and manages more than 13,000 containers throughout Australia as well as a depot network spanning Australia’s major cities including Adelaide, Brisbane, Darwin, Melbourne, Karratha, Perth and Sydney.

SCF’s product range spans tanks, containers for site storage, accommodation and intermodal equipment, including refrigeration, side doors, pallet wide and high cube containers.

SCF joins the diverse list of exhibitors signed up for the show who cover everything from transport, logistics, warehousing solutions, materials handling, infrastructure and more.

DP World opens Botany Intermodal

DP World Logistics Australia has opened its Botany Intermodal site, with the official launch ceremony led by the Hon. Melinda Pavey, Minister for Roads, Maritime and Freight – New South Wales.
Paul Scurrah, Managing Director and CEO; and Mark Hulme, Chief Operating Officer – Logistics, customers, industry stakeholders and employees joined Minister Pavey in opening the site in Port Botany.
Scurrah dedicated the opening of the event to Anil Wats, DP World Executive Vice President and Chief Operating Officer, who recently passed away.
Minister Pavey spoke about the important role of New South Wales’ intermodal facilities and rail networks facilitating the movement of export goods through our ports from regional areas.
Hulme thanked the DP World Logistics Australia team for their work in launching the new site.

Boost for Adelaide–Melbourne rail freight productivity

Longer freight trains will soon be able to run between Adelaide and Melbourne thanks to a multimillion-dollar Australian Government rail network upgrade set to increase capacity by up to 20 per cent.
Federal Minister for Infrastructure and Transport Darren Chester said the Melbourne–Adelaide Loops project would allow the accommodation of 1,800-metre trains, improving productivity on the busy line and supporting associated jobs.
“The upgrade will create a 20 per cent increase in productivity for rail operators and remove the need to send additional train services back to Melbourne with empty wagons,” Chester said.
“By investing $15 million in the project, we have created a situation where the maximum length of trains operating from Adelaide to Melbourne can be increased by up to 300 metres The longer, more efficient trains means less congestion for motorists and improved road safety, as well as cutting transport costs.
Chester said Victorian crossing loops at Pyrenees, Murtoa, Pimpinio, Diapur and Dimboola, and South Australia’s Mile End loop, had all been extended to 1,800 metres.
“A 1,800-metre train carries the equivalent of more than 85 B-doubles’ worth of freight that would typically travel by road through South Australia,” he said.
“Moving more freight by rail is crucial to meet the expected doubling of freight demand over the 20 years to 2030 while reducing urban congestion.”
The Australian Rail Track Corporation (ARTC) delivered the Melbourne–Adelaide Loops project.
Additional track upgrades currently underway in Adelaide as part of the Torrens Junction Rail Project will provide a clear path for 1,800-metre trains all the way from Perth to Melbourne by late 2017.

Infrastructure minister commends rail progress

Speaking at the recent Rail Futures Conference held in Melbourne in mid-September by the Rail Freight Alliance, Darren Chester, Minister for Infrastructure and Transport, commended the efforts being made to bolster Australia’s rail capability.
“If we look back at the past 50 years of rail freight here in Victoria, it has been a story of decline – at least, up until recently,” Chester said, adding that as a result of the closure of regional lines and the abolishment of freight gates, goods were increasingly being transported by road rather than rail.
“There is now record investment going into rail freight,” he added, citing government support secured for the $440 million Murray Basin Rail Project, $8.4 billion earmarked for the Inland Rail project, the $58 million Victorian Port Rail Shuttle and the National Freight and Supply Chain Strategy.
“Since becoming Minister, I have been pleased to oversee a $20 billion investment in rail,” he said. “These projects will ease urban congestion, grow the regions and create thousands of new jobs.
“The freight and logistics industry identified rail’s potential to reduce transport costs by about 10 per cent…Our government has secured three Free Trade Agreements, and we are building the infrastructure to capitalise on that.”
Chester added that work is continuing on the Inquiry into National freight and Supply Chain Priorities, designed to inform the National Freight and Supply Chain Strategy.
“The inquiry will set our understanding of what challenges and opportunities lie ahead, and how we can take advantage of them,” he said.
“It is these investments that are going to set up our nation for the next 100 years. I am proud to be playing a part in delivering these game-changing projects, in partnership with the community.
“These are the projects our kids and our grandkids will thank us for – in the cities and in the regions.”

Back on track

This article appeared in the August/September issue of Logistics & Materials Handling.
Over the next decade, Australia’s new Inland Rail is going to reinstate rail as a viable option for the east coast’s rural producers. The new InterLinkSQ Intermodal Terminal and Industrial Precinct in Toowoomba, Queensland, is strategically positioned to connect the country’s exports by road, rail, air and sea.
InterLinkSQ is a new intermodal and industrial precinct currently under construction in Toowoomba, 170km to the west of Brisbane, that will offer a Toowoomba-to-Port shuttle via rail by June 2018, and link with the Inland Rail in 2024. InterLinkSQ is strategically located at the junction of three major highways – Gore, Warrego and New England, by the Toowoomba Second Range Crossing, and eight kilometres from Toowoomba’s new domestic and international airport.
ISQ_State-Map
 
Crucially, the 200-hectare development sits along both the new Inland Rail route and the established Queensland regional rail network, including the West Moreton line, which connects directly to the Port of Brisbane. Prior to the Inland Rail connecting to InterLinkSQ, the development will utilise the existing rail infrastructure by creating a shuttle from Toowoomba to the port of Brisbane, creating efficiencies in logistics by allowing for more goods to be exported.
Transport inefficiencies are prevalent in the region – for example, approximately 200,000 tonnes of chickpeas were left in the ground in the Darling Downs region in 2015–2016 due to an inability to move the goods to port as a result of a lack of road transport.
By creating a rail shuttle from Toowoomba to the Port of Brisbane, InterLinkSQ will allow road transport to move more efficiently in regional areas. By moving freight via rail from InterLinkSQ, trucks can be removed from Brisbane’s already congested roads, explains Michelle Reynolds, CEO, InterLinkSQ.
“For every train from InterLinkSQ to the Port of Brisbane, around 54 trucks will be removed from the urban and passenger road networks,” she says, noting that a 2015 Deloitte Demand study reported that the Port of Brisbane was keen to promote freight on rail and the need for development of inland terminals, citing a need to avoid the road-based congestion expected to confront the port in the coming ten years, should no modal shift to rail occur.
“Along with increased productivity for road operators and improved safety standards on urban roads, for every container (Twenty-Foot Equivalent Unit, or TEU) that is transferred from InterLinkSQ to the port of Brisbane by rail, rather than road, there will be a reduction of 125kg of C02 emissions,” she adds. “These same trucks can then operate in higher productivity configurations in regional and rural areas to consolidate the increased freight volumes expected as our producers increase production volumes to meet the growing requirements of our export markets.”
InterLinkSQ features a Global Logistics Centre with an open-access rail terminal, plus a 140-hectare industrial park. Its $235 million rail transfer centre is currently under construction, with rail services set to commence in June 2018. While the precinct is set to become a major freight hub for goods moving between major metropolitan centres such as Melbourne, Brisbane, Sydney, Perth and Darwin, a key goal of its establishment has been reaching rural producers. “South East and South West Queensland, and areas of northern New South Wales have long faced freight transportation inefficiencies,” says Michelle. Unable to access rail freight services, these regions have been forced to rely on road transportation. “Inland Rail is not only about connecting Brisbane and Melbourne, it’s about connecting region to region, and regions to ports.
“In talking to some producers, they have told me that freight costs can be up to 50 per cent of the cost of the product by the time it gets to port. InterLinkSQ will be a linchpin in helping those rural producers maximise supply chain efficiencies.”
InterLinkSQ will provide access to the key agricultural and mining regions to the west, as well as access to growing international markets via road, rail, air and sea, Michelle adds. “Reduced transport costs will allow producers to lower the cost of exported goods, making Australian produce more competitive.
“Toowoomba acts as a funnel for the major export regions of the Darling Downs and Surat Basin, over the Great Dividing Range and to the Port of Brisbane,” she says. “This region mainly produces coal, grains, cotton, meat and pulses.” The terminal has been planned to meet both current and forecasted future demands – initially it will have a capacity of 96,000TEU, this is expected to rise to 750,000TEU. Over the next ten years, the precinct will be positioned to become a “port of destination” for shipping, Michelle explains. “InterLinkSQ is a game-changing project, primarily funded by 86 local families,” she says.
“The InterLinkSQ project has been developed to boost the Toowoomba economy and create much needed efficiencies in the rail freight industry. It is a community project, developed as a result of direct need from businesses in the region.”
InterLinkSQ will initially move freight from the Darling Downs in Southern Queensland to the Port of Brisbane, Michelle adds. “The project’s initial rail freight offering from June 2018 will save farmers around $50 per TEU, according to a report done by property and infrastructure specialist APP,” she says. “The ability to locate businesses on the InterLinkSQ site with direct access to rail will bring additional savings to local businesses, allowing the region to grow exponentially.
“The implementation of rail, both nationally and locally in Southern Queensland, creates efficiencies in the logistics chain allowing farmers to produce more goods at a lower cost, thereby enabling produce to be more competitive in the global market.”

Will Melbourne’s port shuttle work?

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.”
 

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