Port rail proposals move forward in Australia
The rejuvenation of on-dock rail and rail shuttles is moving ahead in several Australian ports, but is not without its challenges, as Dave MacIntyre discovers.
While rail modal share is being targeted for a resurgence in Melbourne, NSW Ports (Botany and Port Kembla), Brisbane and Fremantle, the debate brings with it the issues such as government subsidies, the potential for double-handling costs at intermodal terminals and, in Melbourne the unfair application of levies on import containers for all stevedores
where one – VICT – is not rail-served.
The Melbourne issues are discussed in detail in the article on p.23 with the wider freight community currently waiting to see whether the $15 per TEU wharfage increase goes ahead. Elsewhere in Australia, however, port rail expansion has big support.
In Brisbane, the potential for port rail expansion has been cast into the spotlight by the release of analysis by Deloitte Access Economics, which says a dedicated freight rail connection to the port would be “game-changing".
Brisbane has advocated for dedicated freight rail connectivity to the port, to overcome friction between freight and the passenger rail network. Currently, 98% of freight is trucked to the port through roads in regional communities and city suburbs.
In 2018, that equalled approximately four million truck movements, which will increase to 13 million by 2050. The port believes this is not sustainable long-term as South-East Queensland grows.
It commissioned the Deloitte study, which concludes that an urgent shift from the region’s reliance on road freight is needed to accommodate a freight task climbing from 1.35 million TEUs in 2018 to around 5 million in 2050.
The study also identified that a 30% rail modal share to the port by 2035 could deliver 2.4 million fewer truck movements and around A$820 million in economic, social and environmental benefits each year.
Port of Brisbane CEO Roy Cummins has welcomed the proposal to separate the existing shared passenger and freight rail networks, saying that as Queensland’s population grows there will be future issues.
“The way our supply chain is established at present, that means a truck tsunami is heading our way,” he confirmed.
Mr Cummins says a dedicated freight rail connection has already been acknowledged by all levels of government as a key priority through the SEQ City Deals proposition.
The SEQ is a joint production of the Queensland Government and the Council of Mayors which identifies transformational opportunities for future deal negotiations with the Australian Federal Government.
In NSW, rail is a fundamental part of the 30 year-plan for Port Botany and Kembla. The NSW Ports’ Masterplan has a goal to move three million TEU on rail by 2045 because every million reduces the number of trucks on roads around the port by 900 per day and lowers emissions.
An ongoing focus on port/rail efficiency has delivered a 52% increase in containers moved to and from Port Botany by rail since 2015. Port Botany now has the largest number of containers moved by rail of all Australian ports at 436,000 TEU. It is the only container port in Australia with on-dock rail at all three stevedore terminals.
To further increase capacity and efficiency, NSW Ports has committed $120 million in funds for Stage 1 works to double port-side rail capacity at Patrick Terminals – Sydney AutoStrad from 750,000 TEU to 1.5 million TEU, with $70 million coming from Patrick for new rail operating equipment and technology.
A start was made in August 2019 and the project will take place in staged development to allow existing rail operations at the terminal to continue throughout construction. It will be fully operational in 2023.
Investment is following at the DP World and Hutchison terminals. NSW Ports CEO Marika Calfas says rail is “fundamental to support the future growth and trade needs” of NSW and construction of additional on-dock rail infrastructure will further enhance efficiencies in the supply chain.
In addition to the container trades, since 2018 NSW Ports has moved 350 cement wagons on rail per month at Port Kembla to support the Sydney construction boom. At Port Kembla, rail handles the carriage of coal, grain, copper concentrate and steel for export.
The extensive rail yard within the port allows the movement and storage of multiple train sets in excess of 1.2 km. NSW Ports’ also has the capability to offer common-user intermodal rail access in the Outer Harbour.
While NSW Ports manages the rail network within the Inner Harbour and the Outer Harbour consisting of rail lines, sidings and loops, the rail connections to Port Kembla from markets in regional NSW are provided by the Illawarra Line and the Moss Vale-Unanderra Line, managed by the NSW Government and ARTC respectively.
NSW Ports believes solutions need to be found to accommodate further freight rail demands, such as upgrades to the Moss Vale-Unanderra Line and construction of the Maldon-Dombarton Line.
Upgrades of the Moss Vale-Unanderra Line to allow longer, heavier and faster trains would improve the line for dedicated freight use, while the Maldon-Dombarton Line could unlock the further potential of Port Kembla and maximise rail transport of bulk products.
By comparison, in Western Australia, the state government has a commitment to achieve a 20% share of freight on rail and is putting money where its mouth is by subsidising rail transfers.
A record high of 23.7% of freight taken to Fremantle Port Inner Harbour went by rail in April 2019, with the government's policy to raise the container rail subsidy credited with a 30% increase in rail’s modal share.
Prior to the increase in the subsidy, rail’s share had dropped to as low as 10.9% under the previous government. Fremantle Ports is currently undertaking a market process to determine who will manage and operate the North Quay Rail Terminal in future, which will help drive further efficiencies in rail operations at the port.
The WA state government now has a taskforce planning for a longer-term Outer Harbour freight solution and favours the development of more intermodal terminals in the greater metropolitan area, which will enhance the efficiency of the rail system and encourage more freight to move by rail.
From the viewpoint of users of Australia’s ports, Container Transport Alliance Australia Director Neil Chambers says there are several issues which arise about on-dock rail proposals.
“There are many challenges that will need to be overcome to build rail’s market share and it would most likely require the government to subsidise its use, as they do in Fremantle for instance, which has a $50 per TEU subsidy (i.e. $50 per 20’ and $100 per 40’ container),” he confirmed.
The executive added: “One of the tricks to successful port rail shuttle operations will be in attracting import containers to utilise the services. However, many import containers are time sensitive – many importers want their box first day of availability off the ship. This is unlikely to happen if rail is used to shuttle the import container to an urban terminal for subsequent delivery or unpack.”
Other issues exist too. “You also have the issue of avoiding shipping line container detention in being able to return the empty container within the detention-free time, before significant charges are incurred. The added time involved in using rail can be an issue in that regard,” he stated.
Mr Chambers says the other main challenge is purely price, given that rail always involves additional container lifts, which costs more in container handling. “Intermodal terminal operations come into their own when the container and its contents are dealt with on-site (i.e. value-add at the intermodal facility). That is the model for example at the Moorebank intermodal facility due to open in Sydney’s western suburbs very soon (to be operated by Qube)."
However, Mr Chambers provides a key question that needed to be answered. “Will that be the model at the urban intermodal facilities in Melbourne’s west, north and south-east? If the container is shuttled by rail to one of these urban intermodal facilities (one at least only 15km away from the port gate), only to be loaded onto a truck for ‘last mile’ delivery (or vice versa for exports), then what’s the point?”
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