Container rail traffic to the Port of Melbourne again declines

In its latest report, the ACCC found the number of containers transported by rail had dropped to 5.8 per cent, last financial year, a small decline from 5.9pc in 2020-21.

Read more: Rail-to-road mode shift reversal

Rail Futures Institute president John Hearsch said he didn't think the slide in rail share of containers transported to the port had been arrested.

"Since then, the Deniliquin rice train has been lost to road and, from industry sources, some of the other remaining regional intermodal trains within Victoria are looking somewhat shaky," Mr Hearsch said.

"This is largely due to the easing of restrictions on the operation of very large trucks."

The state government has cut funding for the Mode Shift Incentive Scheme, which aims to encourage moving containers from road to rail, from $117 per container in 2013-14 to just $94 per container last year.

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MSIS is provided to four operators, WestVic Containers, Dennington, Linx Cargo Care, which operates a service out of Griffith, NSW to the port, SCT, Dooen, and Seaway, Merbein.

The value of the MSIS had obviously been eroded by inflation, Mr Hearsch said.

"In our submission for the 2023/24 State Budget, we have recommended the MSIS be extended for five years to at least provide some certainty to its recipients," he said.

"We have also proposed creation of a separate fund that is available to assist proponents of new or upgraded private sidings or intermodal terminals which are shown to be potentially viable."

Seaway Intermodal head Ros Milverton said as agricultural products were among the highest volume of products carried by train, it would be good to see a boost in the MSIS.

"Over the years the MSIS has gone down considerably," she said.

"They [the government] didn't drop the MSIS this last year, although it has been reduced - with the cost of business it should be going the other way," Ms Milverton said.

"I am probably just happy we retained it."

She said greater education may be required to shift more freight from road to rail and the Big Build had meant rail lines were sometimes were unavailable for freight

While the authorities were listening to when demand was greatest, there were limitations on how "occupations" - or lines out of service to do works - could be resolved, she said.

"I think some of it is around educating potential exporters on how it works - the people we deal with are used to the system and they match the trains in with their vessels," Ms Milverton said.

"Since we have seen upgrades in the track, a number of years ago, rail has been more reliable so we have been able to go back into the market and sell with confidence."

The concerns over the continued decline in road-rail mode shift come as doubts have been expressed about the proposed $400 million Somerton Intermodal Terminal, due for completion by 2025 and part of the government's ambitious Port Rail Shuttle proposal.

Proponents Intermodal Terminal Company (ITC), claimed the hub would be the closest terminal in Melbourne for Inland Rail able to take double-stacked, 1800metre trains.

But industry insiders said it was unlikely double-stacked wagons, which carry two layers of containers, would be able to get into Somerton, due to a low road bridge at Craigieburn.

An Australian Rail Track Corporation spokesman said there were no projects on the Inland Rail, currently planned for the south of Wallan.

That's 26 kilometres south of Somerton.

The spokesman said double-stacked rains could not currently reach the SIT.

A high-placed rail industry source said constraints at Somerton would also mean 1800 metre trains would have to be broken up into smaller sections and shunted.

That would lead to significant inefficiencies in loading and unloading.

The current holding loop, off the mainline outside the terminal, was only 1550 metres, which meant an 1800m train couldn't enter the site.

WestVic Container Export manging director Warwick Loft, Dennington, said original plans for an intermodal at Somerton had turned out to be a "white elephant".

Industry insiders claim the last train left the Somerton facility for the Port 15 years ago.

"It seems what has happened is that the elephant has had a family," Mr Loft said.

"Several companies had a crack at it, and it's just failed.

"It's a shame it can't work, but we are dealing with road transport and they are fighters, they will survive."

He said Westvic would not use Somerton, as it already had a depot, Australian Container Freight Services, on the outskirts of the port.

Ms Milverton said Seaway was also unlikely to benefit from Somerton, which appeared to be focussed on imports, rather than exports.

Linx Cargo Care Group Customer, Business Development and Property executive general manager Carlo Cutinelli said the company was willing to explore the use of Somerton.

Linx provides a daily rail service from Griffith, NSW, to the Port of Melbourne.

"Should the Somerton Intermodal Terminal provide a safer, more commercially beneficial and environmentally friendly solution, versus what is being done today, then Linx looks forward to exploring the potential use of it with the relevant parties associated with it," Mr Cutinelli said.

Aware Super, ITC and the state government have all been contacted for comment.