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HELP US DELIVER

A SNAPSHOT OF FREIGHT INFRASTRUCTURE OPPORTUNITIES

Australian Logistics Council

October 2019

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Every Australian, everywhere, every day relies on freight.

The dedicated professionals who make up our freight logistics industry work tirelessly to deliver about four billion tonnes of goods around Australia each year.

That’s 163 tonnes of freight for every Australian.

But our growing population, rising levels of congestion and years of inadequate planning for freight movement are making the task harder.

These factors have created bottlenecks a in our freight networks. The delays and costs associated with these flow through to higher prices for consumers, households and businesses.

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THE CHALLENGE WE FACE

TAKING AUSTRALIAN GOODS TO THE WORLDOf course, freight infrastructure that operates efficiently and safely isn’t only important for domestic consumers and businesses.

Efficient supply chains are critical to getting Australian exports to growing international markets. New free trade agreements and a rapidly-growing middle class in Asia offer Australian producers enormous opportunities to take their goods to new markets.

But time is of the essence – especially when it comes to agricultural produce, where freshness and quality are highly prized by international consumers.

Delays in the movement of export freight from point of origin to ports and airports for export make it harder for exporters to satisfy the expectations of overseas consumers – and harm Australia’s international competitiveness.

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ACTION NEEDED NOWAustralia’s overall freight volumes are expected to increase by 35% by 2040 – and the urban freight task is projected to grow by 60% by the same year.

The rail freight task has tripled since the year 2000, while road freight volumes increased by 75% between 2000/01 and 20015/16.

At the same time, our urban infrastructure is already groaning under the weight of capacity constraints.

Modelling from Infrastructure Australia suggests that by 2031, road congestion and public transport crowding alone could cost our economy $39.8 billion, unless we make the right investments.

SUPPORTING FREIGHT-FRIENDLY INFRASTRUCTUREIn the pages that follow, ALC spotlights several opportunities around Australia to deal with bottlenecks in our freight networks through targetted infrastructure investments.

In some instances, we suggest enhancements to existing projects to make them more freight-friendly. In others, we recommend investments in new projects to help boost key trade gateways, stimulating export and employment growth.

Investment in freight infrastructure projects such as those highlighted here will help deliver on the objectives of the recently-released National Freight and Supply Chain Strategy and deliver lasting benefits to Australian consumers, businesses and producers.

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MAKING SYDNEY GATEWAY MORE FREIGHT FRIENDLY

THE CHALLENGE:Sydney Gateway is intended to complete a ‘missing link’ in the Sydney motorway network, enhancing the way people and freight travel to Port Botany and Sydney Airport, via a new motorway connection between the New M5 Interchange at St Peters and the Airport and Port precinct.

However, a decision by the NSW Government to abandon dedicated heavy vehicles access ramps at Canal Road for trucks travelling between Port Botany and the Cooks River Intermodal Terminal (CRIT) in the project design places the congestion reduction objectives in jeopardy.

Unless the ramps are reinstated to the design, trucks will be forced to continue travelling through increasingly residential streets in Mascot and Botany, creating further congestion on local roads, posing safety issues and lessening amenity for local residents.

THE OPPORTUNITY:Incorporating dedicated heavy vehicle access ramps for Sydney Gateway at Canal Road will greatly enhance the efficiency of road freight movement between Port Botany and CRIT, which is Australia’s largest empty container facility.

NSW Ports estimates that container volumes at Port Botany could more than triple from 2.3 million to 8.4 million TEU a year in the next 30 years. At present, around 80 % of the containers travelling to Port Botany are carried by road – and thus the anticipated increase in volumes will place significant pressure on the road network, even with ongoing efforts to achieve modal shift from road to rail.

Constructing dedicated heavy vehicle access ramps at Canal Road would also remove at least 1,600 truck movements a day from local residential streets.

This will improve road safety, reduce congestion and enhance community amenity in suburban Mascot and Botany, where the residential population has grown exponentially over recent years due to high-density apartment developments.

THE ACTION NEEDED: If Sydney Gateway is to fully deliver its intended benefits of reducing road congestion in and around Port Botany and Sydney Airport, it is essential that dedicated heavy vehicle access ramps at Canal Road be reinstated to the design prior to the commencement of construction.

The Federal Government should support industry’s efforts to have NSW reinstate the ramps. To ensure Sydney Gateway fully delivers on its promise of reduced congestion, better road safety and enhanced productivity, for freight operators and for all those who rely on the vital economic precinct around Port Botany and Sydney Airport.

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EFFICIENT ACCESS TO THE PORT OF MELBOURNE

THE CHALLENGE:Port of Melbourne handles more than one third of the national container trade, and contributes more than $7.5 billion to the national economy, directly supporting more than 30,000 full-time jobs. The port’s location in the centre of Melbourne is a great strength, placing it close to consumers who are driving greater freight demand.

As Melbourne’s population is growing, larger ships are visiting Melbourne to supply everyday household goods to Victorian families.

Port of Melbourne’s planning for the growth of Melbourne shows that by 2040, trade will be at 6 million TEU and 8.9 million TEU by 2050, with 3.5% annual trade growth driven by Victoria’s increasing population.

The new port infrastructure to handle this trade growth will be focussed at Webb Dock, adjacent to Fishermans Bend.

The Victorian Government has plans to transform the suburb of Fishermans Bend – historically an industrial precinct – into an inner-urban community that will be home to some 80,000 residents and the base for 60,000 office workers by 2050.

The establishment of such a sizable residential and commercial office precinct adjacent to Webb Dock will have a major impact on Port of Melbourne’s contribution to the Victorian and national economy. It needs to be planned carefully and in a way that protects operational flexibility for the port and its users.

THE OPPORTUNITY:Moving freight by rail has the potential to significantly improve freight efficiency while at the same time improving urban amenity, reducing road congestion and decreasing queuing times at ports.

To fully realise the congestion-reduction and efficiency benefits of rail solutions at the Port of Melbourne, Webb Dock must be connected to the Victorian rail freight network. Webb Dock is well placed to drive future growth at the Port of Melbourne, as it is better suited to accommodating larger, modern vessels.

Webb Dock is also home to the Victoria International Container Terminal (VICT) - one of the world’s most automated container terminals. VICT currently has a capacity of 1 million twenty-foot equivalent (TEU) containers per annum with the potential for future expansion to significantly increase this capacity.

THE ACTION NEEDED:The Fishermans Bend redevelopment must ensure freight transport is appropriately prioritised by preserving rail corridors that will enable Webb Dock to be connected to the Victorian rail freight network. The Federal and Victorian Governments should continue making investments that will support further expansion of the state’s rail freight network – including to Webb Dock.

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DELIVERING INLAND RAIL’S MISSING LINK

THE CHALLENGE:The Commonwealth Government has committed to building Inland Rail – a once-in-a-generation freight rail project running from Melbourne to Brisbane, with construction work on the project now underway.

Once completed, this 1,700km freight rail link will provide a transit time for freight rail of less than 24 hours between Melbourne and Brisbane, travelling on double-stacked trains up to 1,800 metres long. The route will also connect with intermodal terminals at strategic locations along the alignment, providing efficient connections with other parts of the national freight network, including freight rail lines to Adelaide and Perth (via Parkes NSW).

However, the current design for Inland Rail sees the route terminate at Acacia Ridge, approximately 30km south-west of the Port of Brisbane. To fully realise the national supply chain benefits of Inland Rail, it is crucial that a dedicated freight rail link be constructed that connects to the Port of Brisbane.

THE OPPORTUNITY:Infrastructure Australia has identified a dedicated rail freight line servicing the Port of Brisbane as a high priority initiative. In 2018, the Commonwealth and Queensland governments jointly funded a $1.5 million study to examine options for improved freight rail connections to the port.

At present, only around 2% of containerised freight moves to the Port of Brisbane via rail, with the remainder relying on road transport. In a growing city such as Brisbane, this adds significantly to road congestion, delays and increased costs for businesses and consumers.

A September 2019 Deloitte Access Economics report found that achieving a 30 % modal rail share to the Port of Brisbane by 2035 could deliver around $820 million in economic, social and environmental benefits each year.

Specific benefits identified include $195 million in reduced congestion costs, $155 million in reduced road maintenance costs and $210 million in increased international export value.

The construction of a dedicated freight rail link from Acacia Ridge to the Port of Brisbane will also benefit passenger rail users, by separating existing shared passenger and freight rail networks and thus freeing up capacity for additional passenger rail services on the Brisbane network.

THE ACTION NEEDED:The Federal and Queensland Governments must release their joint study, and work cooperatively to commence corridor preservation work that will facilitate the construction of a dedicated freight rail link to the Port of Brisbane. This includes working with industry to proactively engage with local communities to highlight the environmental and congestion-reduction benefits of the project.

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IMPROVING ACCESS TO FREMANTLE PORT

THE CHALLENGE:The Port of Fremantle is Western Australia’s principal general cargo port. Most of Western Australia’s exports of manufactured goods and value-added food products pass through Fremantle, as do most of the consumer goods and motor vehicles that are imported by sea.

The Port of Fremantle operates from two locations: the Inner Harbour at Fremantle and the Outer Harbour, south at Kwinana. The Fremantle Inner Harbour provides modern deep water facilities for handling container trade, break-bulk vessels, livestock exports and motor vehicle imports.

Population growth in Perth over recent years and free trade agreements signed by the Australian Government are generating increasing freight activity. Accordingly, key road access routes to and from the Fremantle Inner Harbour are facing increasing congestion challenges.

THE OPPORTUNITY:Main Roads Western Australia has identified a series of road projects that could be undertaken to facilitate enhanced access to the Fremantle Inner Harbour for freight vehicles and alleviate general road congestion in the precinct. These include: • Widening Stirling Highway to a six-lane

divided standard between High Street and Queen Victoria Street, as well as duplication of the Stirling Bridge; 

• Grade separation of the Stock Road and South Street intersection;

• Upgrading Roe Highway to a six-lane divided standard between Kwinana Freeway and Orrong Road;

• Construction of the Curtin Avenue Link over the Fremantle passenger rail line and duplication of Curtin Avenue to a four-lane divided standard to West Coast Highway;  

• Duplication of West Coast Highway to a four-lane divided standard between Rochdale and Alfred Roads; and  

• Enhancing Stock Road to a six-lane freeway standard between Leach Highway and Rowley Road, including grade separations.

THE ACTION NEEDED:Although the Western Australian Government is currently examining options to expand the state’s freight capacity in the future through new port options, the congestive pressures being experienced by port users, exporters and local residents today will require immediate action.

This is particularly the case if Western Australia wishes to capitalise on opportunities offered by free trade agreements being signed with nations that offer considerable opportunities for livestock and agricultural exports in the near term. Accordingly, the Federal and Western Australian Governments should work collaboratively with industry to prioritise investment in the projects identified above and boost supply chain performance.

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BUILDING TASMANIA’S MINERAL EXPORT POTENTIAL

THE CHALLENGE:The minerals sector is a key driver of economic activity in Tasmania, accounting for more than 55 % of the state’s commercial exports. The Tasmanian Government has a target of growing new mining ventures in the state by 50 % over the next five years.

The sector is undergoing significant growth, with a new iron ore mine in Tasmania’s north-west set to commence production shortly, and the state recording an 8.5 % increase in mining exploration activity in the June quarter – higher than that experienced in any other state.

This upswing in activity and interest in Tasmania’s mineral resources sector makes it more vital than ever that the state has the right freight infrastructure in place to support export activity, so that the demands of international consumers can be met, and the state’s recent periods of employment growth can be sustained.

THE OPPORTUNITY:The Port of Burnie in Tasmania’s north is the state’s largest, handing more than 4 million tonnes of freight each year and accounting for 55 % of the state’s containerised freight.

In response to increasing demands from existing customers and in order to continue to drive export opportunities for Tasmania, the Port of Burnie is seeking to develop a new Bulk Minerals Export Terminal.

Such a facility would also incorporate a state-of-the-art high speed ship loader and storage facility, and widening of the berth pocket. This would permit the Port of Burnie to cater for Panamax class vessels, enhancing its ability to grow international trade and resulting in freight cost savings and efficiency improvements.

THE ACTION NEEDED: As a first step, the Federal and Tasmanian Governments should collaborate to support a feasibility study into the construction of a new Bulk Minerals Export Terminal at the Port of Burnie, with its findings to be used in the development of a business case highlighting the benefits of such a facility to governments, investors and the local community.

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ENHANCING SOUTH AUSTRALIA’S INTERSTATE FREIGHT NETWORK

THE CHALLENGE:The interstate freight rail network that runs through South Australia is one of the most critical pieces of infrastructure in the national supply chain, connecting Perth with Adelaide, Darwin, Sydney and Melbourne.

Rail is the dominant transport mode for freight moving between Perth and Australia’s eastern states, accounting for around 80% of the land-based freight market, with volumes forecast to continue growing over the next decade.

To ensure the reliability of freight rail services along this corridor and optimise network efficiency in order to meet a growing national freight task, a number of upgrade works are essential.

The first phase of upgrades – between Adelaide and Tarcoola – is already underway and is due to be completed later this year.

However, in order to deliver maximum benefits to freight customers and to national productivity, it is necessary to complete all stages of the project as expeditiously as possible.

THE OPPORTUNITY:Phase two of the program involves upgrading a further 1,190 kilometres of the line running from Tarcoola (SA) to Kalgoorlie (WA).

The works would improve the productivity of existing infrastructure by enabling an increase in the maximum axle loading from 23 tonnes to 25 tonnes, improving operating performance. This would further build on investments made by ARTC in upgrading the network to support 25 tonne axle loads, which is consistent with the Australian Government’s long-term goal for the national rail freight network.

Importantly, the works will also help to sustain employment opportunities in regional South Australia, including the production of steel required for the project at Whyalla, which has already produced some 70,000 tonnes of steel for the first phase of the project.

THE ACTION NEEDED:Working with the Australian Rail Track Corporation (ARTC), the Federal Government should bring forward phase two of the project and deliver funding to support upgrades for the Tarcoola to Kalgoorlie sections in the 2020 Commonwealth Budget.

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BOOSTING DARWIN’S FREIGHT CAPACITY

THE CHALLENGE:Darwin Port’s geographic position as the nearest Australian port to growing markets throughout Asia makes it an ideal trade gateway to the region for Northern Australia.

The port is also well connected to road and rail infrastructure, making it a viable option for users looking to export or import directly to and from Asia both regionally and nationally. The continued growth of Darwin Port will also play an important role in securing the wider economic development of Northern Australia – a long-term objective of successive Federal Governments.

To facilitate this outcome, there is a need to invest in infrastructure that ensures that vessels calling at Darwin Port have ready access to appropriate marine support facilities and services. There is also opportunity to enhance landside storage infrastructure and services that will allow a greater number of freight operators and users to capitalise on the port’s strategic location.

THE OPPORTUNITY:The Darwin Ship Lift Facility is a $400 million project that is supported by the NT Government, as well as key industry and business groups based in Darwin. Designed to operate under an open access regime, the proposed ship lift would be capable of lifting vessels of up to 5,000 tonnes out of the water for maintenance and servicing.

This would include commercial vessels engaged in freight transport activity, as well as vessels used by the Australian Defence Force for border patrols. The facility would also incorporate infrastructure to support ship repair and maintenance works.

To further optimise the investment, an opportunity exists to support necessary upgrades to key water, sewerage, electrical and communications infrastructure to address current service capacity issues. This would facilitate the future development of surrounding landholdings for use by freight operators, including warehousing and logistics support facilities that would be consistent with the objective of developing this area of Darwin into a key maritime and logistics precinct.

THE ACTION NEEDED:The Northern Territory Government is currently seeking funding support for the Darwin Ship Lift Facility from the Federal Government, either through the Northern Australia Infrastructure Facility (NAIF), or via a direct contribution.

The Federal Government should work with Darwin Port, the NT Government, local industry and other key stakeholders to ensure that any Federal contribution to the project also supports concurrent adjacent works that enhance freight infrastructure and logistics facilities, to further stimulate the economic development of Northern Australia.

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INVESTMENT IN THESE FREIGHT INFRASTRUCTURE PROJECTS WILL HELP DELIVER ON THE OBJECTIVES OF THE RECENTLY-RELEASED NATIONAL FREIGHT AND SUPPLY CHAIN STRATEGY AND DELIVER LASTING BENEFITS TO AUSTRALIAN CONSUMERS, BUSINESSES AND PRODUCERS.

Last updated October 2019

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