As the old adage goes, ‘if at first you don’t succeed, try, try again’. This mantra arguably applies to the thorny issue of land transport access to the port of Melbourne, the busiest container port in Australia.

Unlike the country’s other large ports, such as Port Botany near Sydney, Melbourne’s key shipping terminals are located close to the expanding city centre, and the constant flow of heavy lorries through residential neighbourhoods is an ongoing problem. This has been exacerbated by the development of residential zones in former industrial areas close to the port.

Repeated attempts have been made over the years to try and boost rail’s share of the Melbourne port traffic, but these have rarely borne fruit, and the figure currently hovers at around 10%. Indeed, rail’s market share has declined over the past two decades, while the number of truck movements in the city has increased dramatically.

The catalyst for the latest initiative was the awarding in September 2016 of a 50-year lease for the Lonsdale Consortium of Australian, Chinese and Canadian institutional investors to manage the port on behalf of the state through Port of Melbourne Operations Pty Ltd. As part of the transaction, the Victoria government mandated the new operator to deliver a Rail Access Strategy to enhance the proportion of freight moving by rail. Responding to that remit, the port operator has drawn up a vision entitled Our Plan for Rail, which was launched earlier this year.

PoM CEO Brendan Bourke said ‘industry has called for a rail solution for more than a decade’. He believed that ‘the port’s rail solution is a critical and missing link in Melbourne’s transport and supply chain network. It expands the rail offering for freight and delivers environmental benefits by reducing truck movements, congestion and pollution.’ However, the complex challenge required ‘a strategic approach to addressing capacity, access, reliability and cost-effectiveness concerns’.

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Delivering modal shift

The plan sets out how PoM seeks to deliver modal shift from road to rail for containers both arriving at and departing from the port, while maintaining or enhancing capacity to handle grain exports typically averaging four 2 500 tonne trains a week during the agricultural season. Bourke emphasised that the many players involved in the freight sector would need to work together in order to deliver a mix of short, medium and long-term actions.

PoM has identified three elements that it believes will be needed to deliver modal shift. These include the construction of additional rail infrastructure within the port complex to simplify the transfer of containers between rail and ships, the development of new freight terminals in the outer suburbs and connecting shuttle services to divert lorry movements away from the city centre, and the establishment of additional or expanded intermodal rail-served terminals in Melbourne’s hinterland.

The aim is laudable, but there is a problem: steps two and three have been tried before. In part this can probably be attributed to the inadequacies of the on-dock rail facilities, which the new operator appears to have recognised. Nevertheless, PoM and the state government will need to ensure that the lessons of the past have been learned this time around.

Blessing and curse

The rapidly rising volume of freight passing through the port has been driving expansion of the site itself. The port handled 3∙0 million TEU in the 2019-20 financial year, a massive jump from 2∙1 million the year before, putting Melbourne comfortably ahead of its domestic rivals in terms of throughput; by comparison Port Botany handled just 1∙6 million TEU in 2018-19. Yet being located adjacent to the city centre has always brought both advantages and disadvantages, and today the negatives are rapidly beginning to outweigh the positives.

The port generates around 11 000 truck movements per weekday according to a survey undertaken in 2016, while over the past decade it has typically handled around 40 trains in an average week. Although some of these trains can be up to 1 800m in length and carry more than 275 TEU, rail is currently averaging around 4 500 TEU per week. The annual total of just 250 000 TEU is less than 10% of the total containers handled through the port last year.

Rail access to the port is limited. Table I shows six terminals at or in close proximity to the port; but most of those described as ‘on port’ or ‘near port’ still require a road transfer between train and ship. At present, there is only one dockside rail terminal, at Swanson Dock West.

Complex rail hub

Outside the port boundaries, Melbourne’s local rail network is a complex mix of broad and standard gauge corridors which carry intensive suburban services as well as freight and passenger trains serving Victoria and neighbouring states. There is little separation of freight and passenger traffic in the metropolitan area, and the Victorian government is also facing an urgent need to boost capacity for regional and commuter trains in the face of rapid population growth.

The city has an array of rail-served freight terminals. Many of these handle intermodal traffic heading to and from the port, but some also handle domestic flows, with inward goods being transhipped to road for final delivery. The principal rail freight hub is the Dynon Precinct. This is located just north of the port, but also handles significant volumes of non-port freight. Pacific National’s Dynon South terminal is served by more than 30 interstate container trains per week, while Qube also manages a terminal in the same area.

Where shipments are destined for delivery in and around Melbourne, there is currently no alternative to road haulage. ‘Last mile’ road movements to and from Dynon are compounding the traffic problems, and the state government has made the development of alternative freight hubs a priority.

A Pacific National container train waits to leave Dynon. Most intermodal terminals still require a road haul to and from the dock area.

A brief flourish

Reflecting the enduring nature of the port access challenge, as long ago as October 2002 the state government sought to address the issue as part of a long-term infrastructure plan entitled Melbourne 2030: planning for sustainable growth.

This noted that ‘one of metropolitan Melbourne’s strengths is comparatively good freight infrastructure in terms of its ports and associated facilities, airports, good road and rail systems’. Investment in freight and logistics networks were identified as a priority, with the plan envisaging a series of interventions to ensure that ‘by 2010, rail will carry 30% of all freight to and from Victoria’s ports’. This target represented a doubling of rail’s then modal share, but it was never met.

That plan did trigger some significant initiatives, notably the launch by CRT Group in 2003-04 of intermodal shuttles to the port from its terminal at Altona North in the western suburbs; initially these were operated with an imported CargoSprinter freight multiple-unit. By mid-2005, when CRT was the sole operator running trains to and from the port, rail had a 17% share of the container traffic. But this was to prove a high point. The shuttle service ceased in February 2007 after the state government refused several requests to help cover its operating costs.

CRT ran into two major problems which combined to kill off the initiative: high access charges for running into the port, and sub-optimal pathing which meant the shuttles could not be timetabled to integrate with the loading and unloading times for long-distance freight trains at Altona North.

Around the same time, a new intermodal hub was in the early stages of development at Somerton, 25 km north of the city centre, as part of the 106 ha Austrak Business Park. This was also designed with a port shuttle in mind, but citing problems with the track layout Qube has primarily used the terminal as a railhead for road transfers to and from the port since it began leasing the facility in 2005. In 2016, Dubai Ports World announced its intention to take over the Somerton terminal and run more trains to and from the port.

The prospects for a revival of the shuttle concept are now brightening. The state and federal governments have allocated a total of A$62m of grant funding to deliver the necessary infrastructure enhancements. Of this, A$16∙2m will be invested by Austrak at Somerton and A$9∙5m by SCT Logistics at Altona North. More support was promised in Victoria’s 2019-20 budget.

Between 2003 and 2007, CRT Group shuttled containers between the port and Altona North using a Cargo Sprinter freight multiple-unit.

Developing WIFT and BIFT

Studies looking at the constraints on the city’s rail freight network have pointed out that none of the terminals in and around Melbourne can easily handle trains of 1 500 m or longer. Nor is double-stack operation currently possible around the city, which will need to be addressed if the potential of the Inland Rail corridor to Brisbane is to be fully realised.

As a result, the state is looking to deliver at least two more major rail freight hubs over the next decade or so. The cornerstone is the planned Western Interstate Freight Terminal to be built at Truganina in the west of the city, which is due for completion by 2024. This is envisaged as the default handling point for domestic freight currently routed into the Dynon Precinct.

PoM’s plan recommends that WIFT should be designated as the primary terminus for Inland Rail, which could thus be diverted away from the city centre. It should also have a direct rail link to the port, optimised for the operation of a frequent service of 600 m long shuttle trains carrying up to 84TEU each.

Complementing WIFT in the longer term, the Beveridge Interstate Freight Terminal would be developed on the northern edge of the conurbation around 50km from the city centre. BIFT is intended to support an area where expansion of the logistics sector is expected in the years ahead.

Four challenges

In its vision, PoM identified four key challenges and proposed a number of actions to address them.

The first is to ensure that on-dock, on-port and near-port rail connections, facilities and operations are fit for purpose. Actions required include the provision of new and upgraded quayside and near-quay infrastructure at the Swanson Precinct, including more on-dock rail terminal capacity to eliminate the need for road transfer of containers. This would dictate the shape of future rail capacity expansion, together with the ‘urgent’ planning and delivery of a new rail access to Webb Dock which is currently only at the proposal stage (below).

Meanwhile, PoM has identified the site of the former Melbourne Wholesale Market between Dynon and the port complex as a potential area for expansion. The land is currently being used as a worksite for construction of the cross-city Metro Rail Tunnel, but PoM says its integration into the port in the longer term would ‘support the robust operation and efficiency of the system’.

The second challenge relates to ‘planning and delivering rail capacity that will support Victoria’s future economic growth’. This will require the delivery of WIFT, and ideally BIFT, along with related rail and road infrastructure in the Outer Metropolitan Ring Corridor to support improved freight movements through the western and northern suburbs.

A number of network-wide actions are identified, the most important being the separation of passenger and freight rail wherever possible in the metropolitan area to maximise capacity and minimise delays for both passengers and freight. The port and its partners have pinpointed a number of interventions to support this aim, focusing on key junctions such as that at Sunshine.

Thirdly, PoM says modal shift must be underpinned by a clear government policy position. This will require a co-ordinated approach to delivering sufficient access to the state-wide rail network for freight, as well as improving operational reliability. The port operator notes that the continued strong growth in passenger demand, combined with a government policy focus on commuter services, has ‘the very real potential to undermine the aspiration of moving more freight by rail’.

The final challenge derives from the complexity of the local rail network and its interaction with the port’s supply chain. Over-arching co-ordination is needed to ensure that all parties are committed to making rail more efficient.

From a financial perspective, PoM is also calling for the state to continue its Mode Shift Incentive Scheme, at least until the necessary infrastructure works have been completed. Since the report was issued, the Victorian government has agreed to allow the scheme to continue until the end of July 2021.

Rails to Webb Dock 

The Webb Dock development is crucial to the future expansion of the Port of Melbourne, being located further towards the mouth of the Yarra River than the two Swanson docks. It is the only container terminal able to accept the higher capacity ‘post-Panamax’ vessels now being introduced around the world.

Located within the Webb Dock complex is the Victoria International Container Terminal, which the port operator says is the first in the world to offer fully automated operation from gate to quayside. This facility alone provides capacity to handle approximately 1 million TEU per annum.

However, the under-utilised rail link to Webb Dock was severed in the early 1990s to make way for the Docklands redevelopment, and a new suburb is under development at Fishermans Bend between Docklands and Webb Dock.

The port operator sees a new Webb Dock Freight Link as a key outcome to be delivered before 2035, but it is clear that a complex planning process will be required, in partnership with the Victoria state government. A proposal for a rail link with a lifting bascule bridge over the Yarra has already been strongly opposed by local residents.

Reconfiguring the railway

The infrastructure works to be delivered within the port area in 2020-24 are set out in the Port Rail Transformation Project, which has a budget of A$125m. Following a detailed review, PoM confirmed in April that PRTP would go ahead at no cost to local taxpayers; it is to be funded by an increase in the tariff on full import containers of A$9∙75 per TEU that came into effect from June 1. PoM estimates that when operating at full capacity, the enhancements could take 6 435 lorries off the local road network.

An early priority will be to reconfigure land use at the Swanson Precinct terminals, so that rail facilities can be leased under the same terms as road transhipment land and wharf access. The port operator also wants to establish clear operational and performance protocols between it and the inland terminal operators. These would enshrine open access to terminals, maximising the level of competition between terminal operators and providing reporting transparency.

The next stage of PRTP would see the development of new sidings at Swanson Dock East, serving the adjacent container terminal. Two tracks are envisaged, each able to handle a 600 m train. Although Swanson Dock West is already rail-connected, a second track would double its capacity. In addition, the approach routes to the port will need to be upgraded to handle trains up to 1 500 m long, together with the related yards, loops and stabling points.

Meanwhile, the port road network will have to be remodelled in order to improve transhipment of those flows which cannot be transferred directly from ship to train.

Welcoming PoM’s confirmation that PRTP would go ahead, Victoria’s Minister for Ports & Freight Melissa Horne said the port of Melbourne was ‘a vital part of our multi-billion dollar export sector and agriculture supply chain. On-dock rail will make its operations more efficient for Victorian exporters, removing congestion at the port gate.’