VICTRACK S MANAGEMENT OF DYNON RAIL FREIGHT TERMINAL

Transcription

1 s management of Dynon Rail Freight Terminal VICTRACK S MANAGEMENT OF DYNON RAIL FREIGHT TERMINAL AUSRAIL 2015 Ben Needham General Manager, Property Group,, Victoria s second largest land owner, discusses freight throughput open access and the challenges ahead. currently operates three core services, Telecommunications, Property and Project Delivery. As part of the Property Group, the Logistics and Transport business unit owns and manages a number of rail track assets, including intermodal terminals, common-user sidings and maintenance facilities. The most significant rail freight asset currently owned by is the Dynon Rail Freight Terminal (DRFT) which is an open-access, intermodal terminal located on Dynon Road, West Melbourne. Open-access provisions apply to rail and road freight operations into and out of the terminal. By having assured access to intermodal terminal facilities, freight and logistics companies, large and small, can have a level of confidence when planning their future operations and investments. Open access arrangements for rail freight lines in Victoria, including the DRFT, are secured through the Freight Network Declaration Order and Victorian Rail Access Regime administered by the Essential Services Commission Victoria (ESCV). s Board has recently endorsed the implementation of a five-year business plan for DRFT 1. The plan incorporated an external study 2, which investigated and analysed the Victorian freight market to identify the segments where a modal shift from road to rail could be encouraged on a commercially sustainable basis. The key learnings from that study are highlighted in this paper. 1 - Dynon Rail Freight Terminal Business Plan 2015 to PwC Options Analysis for Dynon Rail Freight Terminal, August 2015

2 s management of Dynon Rail Freight Terminal INTRODUCTION After the privatisation of state rail assets occurred in 1999, DRFT was operated by Freight Australia until 2004, when Toll, the owner of Pacific National, purchased Freight Australia. In 2005, Toll merged with Patrick and the Australian Competition and Consumer Commission viewed this transaction as potentially non-competitive for rail freight and intervened, seeking a series of undertakings 3 from Toll to enable ongoing competition in the rail freight market. One of those undertakings was the hand-over of DRFT to for it to operate a common-user intermodal terminal. This ensured open access arrangements remained in place to support state government initiatives to provide competition in the Victorian freight market. The DRFT is one of Victoria s largest openaccess intermodal terminals and is regulated by the ESCV under an Access Arrangement 4. This arrangement provides an open and transparent method for rail operators seeking to gain access to the network. This arrangement determines access pricing levels and terms and conditions for freight operators and logistics companies to accurately plan their future operations and investments. The DRFT is critically important to Victoria, due to its role as a major hub in the state s freight network. The DRFT is strategically located in what is known as the Port of Melbourne Precinct, with transport links to major freight and logistics precincts in Melbourne s west, north and south-east. The Victorian Freight and Logistic Plan 5 (VFLP) identified DRFT as a key gateway for the movement of freight into and out of Melbourne. The VFLP also notes that the Dynon precinct terminals will most likely reach capacity in the medium term. Consequently, planning is underway to locate to a new 3 ACCC viewed on 17 July 2015 at ESCV viewed on 10 September 2015 at 5 DEDJTR The Victorian Freight and Logistics Plan, Victoria The Freight State. terminal to the west of Melbourne known as the Western Interstate Freight Terminal 6 (WIFT), possibly by Following the preliminary WIFT business case development in 2013, shortlisted solutions are being investigated further by the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) in order to complete a full business case in 2015 recommending a preferred solution for Government consideration. Once the Government determines its preferred solution, DEDJTR will take further steps to preserve, in the relevant planning schemes and policies, the land and access corridors required for future interstate terminals. Until then, DRFT will remain a major freight gateway into and out of Melbourne for interstate and regional intermodal traffic. In the past, the DRFT was set up primarily to service regional Victorian trains, bringing export containers from the regional centres to the Port of Melbourne. DRFT now provides for interstate, intermodal trains operating between Brisbane and Melbourne and Perth and Melbourne. DRFT provides intermodal services in the Port Precinct along with Pacific National s Melbourne Freight Terminal located at South Dynon and direct on-dock rail sidings operated by Asciano, DP World and Qube Logistics. Container throughput volume at DRFT for the 2013/14 and 2014/15 FYs were 120,000 TEUs and 122,000 TEUs respectively. DRFT has a current, theoretical throughput capacity in the order of 200,000 TEUs per annum. Further investments can potentially lift DRFT s throughput above the theoretical capacity; however demand above this figure is by a number of factors both at a local, national and global level. 1 VICTRACK S ROLE IN FREIGHT 1.1 Land ownership and management in Victoria Created in 1997, is a state-owned enterprise with an independent Board. It plays a pivotal role in supporting the Victorian 6 DEDJTR viewed on 10 September 2015 at rmodal-terminals/western-interstate-freight-terminal

3 s management of Dynon Rail Freight Terminal Government to provide improved public transport outcomes without relying on government funding to continue operations. reports to both the Minister for Public Transport and the Treasurer and operates under the Transport Integration Act is the custodial owner of Victoria s rail land, infrastructure and much of its rolling stock. delivers transport infrastructure for the State including new stations, station upgrades, bridges and other assets. The telecommunications network that underpins transport across Victoria is owned and managed by. And as the largest titled land holder in Victoria, has a significant role in managing a diverse property portfolio. The revenue generated through s activities funds its operations and projects. In 2012, invested $8.7 million at DRFT to replace 23,000 square metres of bitumen paving with high-strength, post-tension concrete to improve the terminal s capacity and efficiency. As discussed later in this paper, further investment will ensure DRFT meets its potential and continues to support the growth of freight on rail in Victoria. 1.2 s charter and the Transport Integration Act 2010 (TIA) must ensure that transport-related land, infrastructure and assets are: managed in a manner consistent with the Transport Integration Act 2010 (Vic) and transport system objectives; used primarily to support the transport system; used for other purposes which support government policy; and only used for commercial gain if the development or use will not compromise the current or future transport system. 1.3 Assisting freight project delivery assists the state government in delivering projects aimed at improving the viability of freight on rail. These projects include upgrading level crossings on the Victorian interstate network; the automation of North Geelong C Signal Box; increasing the capacity of Geelong Grain loop; traffic signalisation of S Gate in Dynon; and infrastructure upgrade projects at DRFT 2 ECONOMIC CHALLENGES 2.1 The Victorian Freight Task This section provides an overview of the Victorian Freight Task 7. The purpose is to determine the volume of freight that may potentially be available (contestable) to shift transport modes from road to rail. The freight market consists of three main segments: interstate market (capital city to capital city) intrastate (regional) market Melbourne metropolitan market The total annual Victorian Freight Task is estimated to be 44 million TEUs in Assuming a conversion rate of 7.5 tonnes per TEU, this equates to 330 million tonnes. The largest market segment is the metropolitan segment, accounting for an estimated million TEUs in 2015, or 55% of freight. Intrastate and interstate freight amounts to 10.7 million (24%) and 0.96 million (2%) TEUs respectively. 8 Road (98.2%) dominates the modal share of the Victorian freight task, with rail carrying only 1.2% of freight. 7 See note 5 above 8 The remaining proportion of the freight task cannot be allocated to a market, because the origin and destination are not identified in the source data.

4 TEUs (millions) Ben Needham s management of Dynon Rail Freight Terminal Figure 1. The Victorian Freight task in ,148 8,130,212 10,701,547 24,265,774 Interstate Metropolitan Intrastate Unknown OD As shown in Figure 2 below, the overall freight task is forecast to grow to 68 million TEUs by Mode shares are forecast to shift slightly towards road. Figure 2. Forecast freight demand Total Road Rail The main reasons why road is expected to capture a greater market share are shown below: cost structures are not competitive over most intrastate distances without sufficiently high volume; rail does not connect all freight routes; rail is not sufficiently reliable for shippers, particularly on the North South route where scheduling is contingent upon other jurisdictions and on the Melbourne metropolitan network due to constrained freight paths; and rail does not have sufficient flexibility for all shippers, particularly intrastate agricultural producers who may be unwilling to commit to take and pay agreements given fluctuating production freight volumes resulting from seasonality Interstate market The interstate freight market is estimated to generate 0.95 million TEUs in 2015 and is estimated to grow to 1.4 million TEUs by As shown in

5 TEUs (millions) Ben Needham s management of Dynon Rail Freight Terminal Figure 3, rail has a significant modal share (30%), although road is still the dominant freight mode (70%) the competitiveness of rail transport increases with distance. Research conducted by V/Line and BITRE suggests that rail tends to be lower cost relative to road for distances greater than 400 kilometres. However, rail is typically dependent on road freight transport for the pick-up and delivery of freight to and from intermodal terminals. Figure 3. Forecast freight demand in the interstate market Total Road Rail Interstate freight tends to be composed of manufactured goods (e.g. steel products, automotive, chemicals, packaging materials, paper and building materials) and fast moving consumer goods (e.g. food and beverages). Figure 4 shows, rail has a relatively small modal share (4%) compared to road (96%). The main reason why rail is less competitive in the intrastate market than it is in the interstate market is the shorter distances. The viability of Intrastate market The intrastate market is estimated to generate 10.7 million TEUs in Intrastate freight is forecast to grow to 16.5 million TEUs in As rail, however, is a function of loads and distance. So rail can be competitive over shorter distances for heavier loads. Obtaining terminal access at the point of production can also increase the competiveness of rail, by eliminating pick-up and delivery (PUD) costs (e.g. Australian Paper at Maryvale). Figure 4. Forecast freight demand in the intrastate market

6 TEUs (millions) TEUs (millions) Ben Needham s management of Dynon Rail Freight Terminal Total Road Rail Freight in the intrastate market predominantly consists of primary industries, such as forestry, raw milk, grain and mineral sands. For some commodities such as forestry, dairy and mineral sand, volumes are inflated as the product moves along the various stages of the supply chain. For example, mineral sand is transported by road from mine to intermodal terminal, then on rail to processing plant and then on road to the final destination Metropolitan market The metropolitan freight market is estimated to generate 24.2 million TEUs in 2015 and is projected to grow to 38.5 million TEUs in Almost no metropolitan freight is carried by rail (0.3%). As a result, the Melbourne metropolitan freight task is carried almost exclusively by its road infrastructure. Road transport remains the most practical mode for the majority of freight in metropolitan areas because of the short distances and dispersed origins and destinations. Figure 5. Forecast freight demand in the metropolitan market Total Road Rail The major freight producers in Melbourne include manufacturing, food and beverage, agricultural, cement/concrete, steel, petroleum, automotive, stock feed, meat and dairy products. There are three other key generators of freight in Metropolitan Melbourne: Distribution centres The largest distribution centres belong to national retailers (e.g. Coles, Woolworths and Bunnings), major third party logistics companies (e.g. Linfox and Toll) and producers (e.g. Murray Goulburn and Fonterra).

7 TEUs (Millions) Ben Needham s management of Dynon Rail Freight Terminal Intermodal terminals Intermodal terminals support the movement of interstate and regional freight to and from the Port of Melbourne. Port of Melbourne - The majority (approximately 80% of containerised freight) transitioning through Port of Melbourne has origins and destinations in the Melbourne Metropolitan area Quantifying contestable freight for DRFT Of the overall freight task (44 million TEUs in 2015), not all is able to be analysed and contestable for DRFT. Figure 6 indicates the freight volumes excluded from the analysis and the residual contestable volumes. The following volumes are excluded: Freight with unknown origins or destinations (8.2 million TEUs) without the ODs we are unable to estimate supply chain costs or determine whether DRFT is a viable terminal. Existing rail freight (0.47 million TEUs) the potential for inducing rail freight using other terminals to come through DRFT is not within the scope of this analysis. Metropolitan freight (24.2 million TEUs) the viability of Port-Rail shuttle services (the Metropolitan Intermodal System) depends on an on-dock terminal. Non-containerised freight (4.43 million TEUs) Commodities which are not currently containerised, or which do not have the potential to be containerised are not considered contestable for DRFT. Appendix B classifies commodities as potentially containerised or otherwise. Freight served by other terminals (3.16 million TEUs) Freight in corridors served by origin or destination terminals other than DRFT is excluded from contestable freight volumes. Freight is not considered to be served by DRFT if DRFT is not the closest non-metropolitan terminal to either the origin or destination. The rationale for excluding other metropolitan terminals from this 'closest terminal' analysis is that if a mode switch was to occur, the difference in PUD costs for DRFT versus other metropolitan terminals is unlikely to be highly significant relative to overall supply chain costs. As a result, the contestable volume of freight for DRFT is 3.57 million TEUs per annum (in 2015 terms). Figure 6. Quantifying contestable freight for DRFT Total annual (2015) freight task Less unknown mode and OD Pair Less existing rail freight Less metropolitan freight Less noncontainerised commodities Less non-contestable road freight Contestable road freight for DRFT 2.2 Creating modal shift This section examines the steps can take to induce a mode shift from road to rail for the 3.57 million TEUs of contestable freight which was identified previously.

8 s management of Dynon Rail Freight Terminal The primary assumption underlying our analysis is that shippers modal choice decisions are made on the basis of relative cost. Notwithstanding any barriers to modal shifts, the cheaper rail is relative to road, the greater the modal share of rail. With this in mind, we developed the Dynon Supply Chain Analysis Model (DSCAM). DSCAM has the following three objectives: 1 Identify routes served by DRFT where rail has an existing supply chain cost advantage and estimate the potential increase in throughput that could be achieved by leveraging this advantage; Figure 7, DSCAM selects the optimal route based on the shortest distance. For each of the following modes: Road the model selects the shortest distance from origin to destination, with the condition that the freight must pass through an empty container park (ECP). 2 Analyse the impact of the proposed upgrades at DRFT on supply chain costs and estimate the potential increase in throughput; and 3 Quantify the increase in s revenue resulting from step one and step two and compare with the capital costs, in present values. 2.3 Modelling approach DSCAM estimates the potential mode shift in three steps. Step 1: Select the optimal route for each OD pair As shown in Rail the model selects the closest terminals to the origin and destination, and the shortest rail route between the two selected terminals. All road distances, including pick-up and delivery for rail based supply chains, are based on the quickest route, thus ensuring major highways and arterials are used. Figure 7. Estimating supply chain costs Step 2: Estimate supply chain costs for the optimal route Given the optimal route, DSCAM estimates the transport cost for segment of each origindestination pair (OD pair). The model disaggregates cost into fixed cost which typically vary per truck or train and variable costs which vary with distance travelled and the volume of freight transported.

9 s management of Dynon Rail Freight Terminal For each OD pair and mode, fixed and variable costs are then aggregated to provide an estimate of total supply chain cost. A comparison can then be made between rail and road supply chain costs to determine the lower cost option. Step 3: Apply supply chain cost elasticities While relative costs are the primary driver of modal choice decisions, DSCAM recognises that there may be non-price barriers to modal shift. For example, some shippers may be locked in to existing long term contracts with road transport companies. Others may perceive that road offers greater reliability and flexibility. This implies threshold cost changes at which an increasingly larger percentage of freight would shift from roads in rail. Based on previous experience, the model assumes that, on average, 33% of freight will shift from road to rail to when rail is 10% less expensive. When rail is 15% less expensive, 66% of freight will shift mode, and when rail is 20% less expensive 100% of freight will change modes.

10 s management of Dynon Rail Freight Terminal Figure 8. Relative costs and modal shifting 2.4 Disrupting the supply chain This report has previously detailed methods of increasing throughput at DRFT that fit within existing supply chains. Both methods involve marginal changes in financial or non-financial factors (e.g. opening hours) to improve the competitiveness of rail relative to road. The third method of increasing throughput, which is discussed in this section, involves driving non-marginal changes in total supply chain costs by disrupting existing supply chains. The key means through which the rail based supply chain can be disrupted is to vertically integrate processes within the supply chain on a single site, thereby: reducing the frequency and distance of freight movements in the supply chain; and reducing rail based transport costs for shippers relative to road. While disruption can increase throughput at a terminal there are some key challenges which should be considered, namely: vertical integration generally requires shippers to make significant upfront capital investment in processing and packaging facilities. This is a significant disincentive for shippers that have sunk investment in existing facilities. Therefore vertical integration is best targeted at new industries or existing shippers who are reaching production capacity at existing facilities and are struggling to meet demand; and the infrastructure associated with vertical integration at the terminal warehousing, processing & manufacturing plants etc. generally has a long economic life and extended payback period for investors Interstate supply chain

11 s management of Dynon Rail Freight Terminal Figure 9 illustrates how the construction of a warehouse and container park within the DRFT precinct would create an opportunity for vertical integration in the rail based supply chain.

12 s management of Dynon Rail Freight Terminal Figure 9. Disrupting the interstate supply chain Existing Port of Melbourne (Imports) Potential Port of Melbourne (Imports) Inner Metro Container Park DRFT Manufacturer Manufacturer Warehousing & Distribution Interstate Capital City DRFT Interstate Capital City As shown, this could potentially eliminate two sets of pick-up and delivery (PUD) costs significantly reducing overall rail based supply chain costs. Were DRFT to pursue this option, probable enabling costs would include; Reinforcing pavement structure to withstand six stacked empty containers; and Figure 10 illustrates how the provision of facilities on a single site upcountry would create an opportunity for vertical integration in the rail based supply chain. Provision of additional interstate capacity given existing and potential utilisation rates. Potential investors in this model include national food and beverage distributors importing through Port of Melbourne that could create a national distribution centre on site and leverage direct rail access to regional distribution centres in other capital cities Intrastate supply chain Figure 10. Disrupting the intrastate supply chain: on-site warehousing

13 s management of Dynon Rail Freight Terminal As shown, this eliminates one set of PUD costs (plant to terminal) and potentially two if an empty container park was collocated at the destination terminal, significantly reducing overall rail based supply chain costs. A key challenge to achieving this is the scale of production; as individual producers may not have sufficient scale to justify this level of investment and may be reliant on a cooperative to purchase, consolidate and ship product to generate scale. This is a challenge to establishing and retaining open-access intermodal hubs in regional locations such as Mooroopna and Hamilton. The cost to of this model is unknown. It is dependent on s financial contribution (if any) to establishing or reenergising intermodal hubs in regional areas Metropolitan supply chain Figure 1 illustrates the potential impact on the metropolitan market of constructing a warehouse and container park at DRFT. Figure 11. Disrupting the metropolitan supply chain: on-site warehousing As shown, this could potentially eliminate two sets of pick-up and delivery (PUD) costs significantly reducing overall rail based supply chain costs. However, metropolitan shippers would still be subjected to PUD shuttle costs between Port and DRFT. Given the close proximity of the Port to the shipper origin/destination it is questionable whether this option would create significant mode shift. 3 DRFT CAPACITY AND SERVICES 3.1 Operational arrangement at DRFT The DRFT occupies land area of approximately 9.5 hectares and within the boundaries there is internal infrastructure supporting the freight and logistics business services that include, but are not limited to, the following: 14 siding tracks (standard, broad and dual gauge) with an overall length of 7.3 kilometres; Four intermodal interfaces served by seven sidings for a total length of 3,888 metres and by configuration as follows; 1,924 metres of standard gauge; 686 metres of broad gauge; and 1,278 metres of dual gauge.

14 s management of Dynon Rail Freight Terminal Overall this configuration provides in total 3,202 metres for standard gauge and 1,929 metres for broad gauge to access the intermodal interfaces; Warehouse of 10,000 m 2 ; and Pavement area of 70,000 m 2 for freight handling services. Under a management agreement, Qube Logistics (Qube) provides freight handling and terminal services at the DRFT. manages the rail access and operations component of the DRFT. The multi-user access arrangements at DRFT apply to both rail and road vehicles in the terminal, with the exception of the forklifts and associated lifting services which are managed exclusively by Qube for reasons of safety. 3.2 Capacity and utilisation Under the current terminal configuration and freight market behaviours the theoretical current operational capacity is approximately 200,000 TEUs per annum. However, there is a difference of 78,000 TEUs between the current throughput and the current operational capacity. An analysis of individual track utilisation occupancy (discounted for nonoperating hours), confirms the terminal is operating at high levels of utilisation on the standard-gauge tracks that service the intermodal interfaces. Currently, the average weekly utilisation of the standard gauge availability capacity is 73%. Typically, two interstate services operate into the terminal Monday to Saturday, except for Wednesday where it is only one service. The one dedicated intermodal interface servicing the intrastate market (broad gauge track) is currently utilised at an average of 25%. One service per day operates from Australian Paper s mill located at Maryvale in the Latrobe Valley. Based on the demand from existing customers the current utilisation of the tracks servicing the intermodal interfaces is shown below: Approximately 90% of throughput relates to the interstate market and 10% relates to the intrastate market. Table 1. Current DRFT throughput 2013/14 FY 2014/15 FY Market Containers TEUS Containers TEUS Interstate 78, ,250 82, ,717 Intrastate 8,716 12,028 6,000 8,280 Total throughput 87, ,278 88, ,997 Utilisation rates indicate that under the current terminal configuration and operating conditions there is: Minimal standard gauge capacity available to grow throughput in the interstate market, without capital investment to meet demand, given the high utilisation rates of dual and standard gauge track; but Sufficient capacity is available to grow throughput in the intrastate market by potentially 38,000 TEU before demand would trigger a need for capital investment. NOTE: There is a potential intrastate market on standard gauge from locations such as Hamilton and others that may open up upon completion of the Murray Basin Rail Project 9. 9 DEDJTR viewed on 10 September 2015 at ray-basin-rail-project

15 s management of Dynon Rail Freight Terminal Table 2. Current utilisation at DRFT Track Gauge Length (m) Average utilisation 1B Standard % 2 Standard % 3 Standard % 5 Dual % 6 Standard % 7 Dual % 10 Broad % 4 INCREASING CAPACITY AND THE POTENTIAL UPGRADE PATHWAY 4.1 Increasing capacity at DRFT Section 3.2 showed that current throughput at DRFT is 122,000 TEUs, well below capacity of 200,000 TEUs and in a do-nothing scenario throughput is projected to decline over the next 16 years. However, the analysis also found that most of the current spare-capacity is available on broad gauge tracks with capacity constraints on standard and dual gauge tracks. Analysis concludes that the constraints on standard gauge tracks are sufficient to preclude an additional interstate service per week, even if operating hours were extended to 18 hours per day. This is because even if the terminal opened two hours earlier, the train would still need to be moved once it is stripped to make way for the next service. Later it would be brought back for reloading. The shunting costs involved would be expected to threaten the viability of the service. In light of this and given s goal of growing throughput at DRFT, the next section considers the impact of each of the proposed DRFT upgrades on terminal capacity. 4.2 Impact of proposed DRFT upgrades on terminal capacity

16 s management of Dynon Rail Freight Terminal

17 s management of Dynon Rail Freight Terminal Table 5 summarises the impact of each of the proposed DRFT upgrades on terminal capacity (in TEUs). It shows that the construction of a new rail/road interface pavement in the Agents Siding [5] is the only upgrade that would increase terminal capacity. 10 However, dual gauging 10-track would release a loading interface for standard gauge services which can only currently be used for broad gauge services. The other upgrades, which do not increase terminal capacity, are intended to reduce costs. For example, the standard gauge link between the Agents Siding and the Headshunt track [4] reduces shunt costs and facilitates access for 1800m trains, thus reducing the fixed costs of paths. 10 Upgrade 7 would technically increase capacity at DRFT. However it at least partially represents a transfer of capacity costs to the ARTC network. Further analysis is required.

18 s management of Dynon Rail Freight Terminal Table 5. Impact of the proposed upgrades on capacity at DRFT No. Upgrade Main purpose Comments 1 Renewal of the Northern Pavement to retain current business Maintain capacity Renewing the northern pavement will ensure that the terminal capacity is not reduced by approximately 50,000 TEUs per annum. This area, located between 6-track and 7-track. 2 Dual gauge 10-track Increase standard gauge capacity This would allow two 1,800-metre standard gauge services to be stripped and reloaded simultaneously. 3 Construction of 600 metres of new rail/road interface pavement in the Agents Siding 4 Standard gauge link between the Agents Siding and the Headshunt track Increase terminal capacity Reduce cost This would increase terminal capacity by 40,000 TEUs per annum. This would increase operational flexibility and efficiency at DRFT; especially by providing an additional link to enable two 1,800-metre long trains to arrive and depart without blocking signals and other movements on the main line. 5 Full standardisation of 1-track at DRFT Reduce cost This would improve the flexibility and operational efficiency of the terminal. 4.3 Other potential upgrades If additional capacity is required on standard gauge, could consider dual gauging 9-track, as well as 10-track. It is estimated that this would free up approximately 30,000 additional TEUs of capacity for standard gauge services. Table 6. Impact of other upgrades on capacity No. Upgrade Main purpose Comments 6 Dual gauge 9-track Increase capacity However, reach stackers would be required in order to realise this additional standard gauge capacity and pavement would need to be upgraded to enable use of FEU capacity reach stackers. 7 Extending 3-track at McIntyre Siding towards Melbourne by approximately 1.6 kilometres and connecting into the ARTC network near Albion Junction Increase terminal capacity The use of McIntyre Siding for shuttling would allow a rake to arrive, be stripped and then depart before the next rake is brought in. This would allow the operator to use less container lifting equipment and release terminal capacity to other users.

19 s management of Dynon Rail Freight Terminal 5 WORKING WITH VICTRACK 5.1 Access to the Victorian rail network has a standard and regulated access process and requirements for accessing parties seeking to access the DRFT Site. Please access the following link and follow the prompts to learn more about network access: < 5.2 Business development is committed to supporting government policy and initiatives to continue to grow the volume of freight moved by rail in Victoria. Accordingly, has invested over $11 million of internal capital since 2007 to ensure the ongoing aim of growth through meeting demand and functionality requirements at DRFT. and other state agencies are seeking private businesses to consider transporting freight on the Victorian rail network as a standard practice for their business. There are considerable savings available and we would encourage all major businesses to consider the shift from road to rail for all or at least part of their freight s journey from origin to destination. is committed to continually improving and investing in the DRFT as a means of improving the flow of freight on the Victorian rail network. have a dedicated Transport and Logistics business unit that is able to assist with your queries or questions. CONCLUSIONS RECOMMENDATIONS and/or believes the rail transport mode is underutilised across all freight market segments and there is substantial room for growth. Therefore, strongly urges freight market operators to consider using DRFT and other regional intermodal hubs as part of their supply chains to enhance the efficiencies available in multi-modal transport solutions. have the following in place to assist you and your business growth: terminal and rail infrastructure in Melbourne; land and terminal capability in regional Victoria and southern New South Wales; track access and access agreements regulated by the Essential Services Commission Victoria; strong relationships with the relevant Victorian Government departments and authorities There needs to be a culture shift in realising the business benefits in employing multi-modal supply chain models and and our partners are here to assist and help. ACKNOWLEDGEMENTS Aurizon Holdings Limited Department of Economic Development, Jobs, Transport and Resources Victoria PwC Qube Logistics REFERENCES Australian Competition and Consumer Commission - /itemid/ Essential Services Commission Victoria - Department of Economic Development, Jobs, Transport and Resources - rt