Wednesday 18th Jul, 2018

Price must be right for Melbourne rail shuttle

Peter van Duyn. Photo: Victoria University
Peter van Duyn. Photo: Victoria University

INFRASTRUCTURE surcharges at the Melbourne docks risk affecting the viability of the proposed Port of Melbourne rail shuttle.

The governments of Australia and Victoria jointly announced $58m for such a project over the weekend, with the aim of getting more freight onto rail and reducing road congestion.

Maritime logistics expert at the Centre for Supply Chain and Logistics (Deakin University), Peter van Duyn, said it was encouraging to see some progress after 10 years of talking, but warned there were hurdles to jump.

“There has been a lot of water under the bridge. It’s good to see both the federal and state governments getting their skates on,” Mr van Duyn said.

But he noted how stevedores in Melbourne had increased infrastructure surcharges, in some cases substantially.

“I have written previously about the infrastructure charges… maybe don’t levy that on rail containers. It is all about price and price differential,” he said.

“If the price works, then these things will take off like a rocket and the (working) environment will be better for it obviously with taking trucks off the road.”

He noted overseas examples including in Germany where the federal government applied a lower charge on containers moved by rail compared with those moved by truck.

He used another example from the Netherlands where a privately-run rail shuttle from the Port of Rotterdam was struggling under private ownership.

“That was privately owned at first but was struggling and Port of Rotterdam actually stepped in and now they are looking to continue that service,” he said.

“So it is all about pricing and the government facilitating that to make the price right.”

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