A delegation of rail operators, receiving funding to encourage shifting containers from road to rail, has urged the state government to extend the incentive scheme.
In last year's budget, the government announced the annual $3 million Mode Shift Incentive Scheme (MSIS) would end on June 30.
But representatives of Seaway Intermodal (Merbein), Linx Logistics (Tocumwal) and SCT Logistics (Dooen) have urged a staged, two year phase out, as recommended by the Department of Transport and Planning.
Westvic Container Export (Dennington) is the fourth carrier to receive the incentive.
A delegation of representatives from three of the companies - Seaway, Linx and SCT - told Ports and Freight Minister, Melissa Horne the primary focus of intermodal rail terminals was agricultural exports.
Rail was best placed to handle varying volumes and seasonal fluctuations.
"Victoria, and particularly the areas surrounding the intermodal terminals in question, contribute the highest dollar value of export agriculture to the balance of trade," the delegation said.
An audit of Rail Freight Support Programs, last year, found the MSIS had kept container freight on rail but its share had not increased.
The delegation advised the minister the timeframe of two years would give the terminals the opportunity to work with industry on a transition program.
"The commercial imbalance between road and rail continues to be a challenge with not only first and last mile costs, but also the increase in High Productivity Vehicles (HPV's)," delegation members told the minister.
The number of HPV's on Victoria's roads had jumped from 350 in 2018 to 3100 last year.
"Aside from this, several of the intermodal terminals have been hit with continued track occupations for passenger rail upgrades and other improvements, costing the terminals up to five to six times the container subsidy to divert to road," they said.
"The concern for intermodal operators during this period is not only the financial loss but also impact to the reputation and reliability of rail."
Seaway Intermodal's Ros Milverton said she was "extremely concerned" it was not the time to work away from regional rail freight support.
"The benefits that rail freight offers in the transition to a net-zero economy are critical," Ms Milverton said.
"Government should be supporting at the minimum a phase out approach to the current scheme while working on an alternative emissions reduction incentive scheme to promote exports and imports through the regional network and the port rail shuttles."
She said environmental, social and governance (ESG) reductions were well behind meeting the required targets, mandated by government.
"The Victorian government is in the process of reviewing and renewing the Victorian Freight Plan, and it would be assumed rail will play an important part in the future of international freight.
"Walking away from the rail freight support program is placing the intermodal terminals under further pressure and risk and I don't understand the logic between the actions by Government and the narrative," she said.
Ms Milverton said as part of its state budget submission, Victorian Chamber of Commerce and Industry (VCCI) had called on the government to back the MSIS to provide more certainty in the transition from road to rail.
"The contribution by government to fund this scheme of $3 million annually is a small number compared to other spend on climate change initiatives," Ms Milverton said.
"From a Treasury perspective, the business case modelling shows that there is a net benefit to the state of the costs of the subsidy versus the costs of road maintenance, ESG benefits and social impact."
SCT Logistics Ports and Government Relations general manager Matt Eryurek said the Victorian Farmers Federation (VFF) said $2 billion was needed for road maintenance in the state.
"When roads were originally built, they were never intended for HPV's and since 2014 we have seen thousands of them hit our roads," he said.
"This year SCT will be moving 15,000 heavy containers from Wimmera to Port of Melbourne.
"Keeping heavy containers on rail will only help our state maintain our roads safer."
Mr Eryurek said keeping freight on rail would help the government achieve carbon reduction targets.
"This scheme assists with the costs associated to transfer from rail head to ocean terminal," he said.
A Department of Transport and Planning spokesperson said the government was continuing to work with the rail freight industry, to make better use of rail assets and support them with their investments, to shift freight from road to rail.
"The Port Rail Shuttle Network will get more containers off our trucks and on our trains and will overcome rail freight inefficiencies," the spokesperson said.
Andrew Miller
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
