Inland Rail could save $213 million a year, CSIRO finds

Inland Rail project. — Once fully operational, Inland Rail will take 200,000 trucks off the road each year. Image courtesy of ARTC.

Inland Rail could save close to $213 million in transport costs for 22 million tonnes of freight each year, new modelling by Australia’s national science agency CSIRO has shown.

CSIRO’s Inland Rail Supply Chain Mapping Project, released yesterday, found that a shift from road to Inland Rail could significantly drive down the cost of transporting freight.

The potential cost reductions cover more than 12,000 supply chains and 94 commodities, including coal, steel, grains, vehicles, horticulture and livestock.

Businesses relying on road-based supply chains will benefit most from the switch, profiting from the average transport saving of $80.77 per tonne ($179 million per annum). Savings will only increase as Australia’s freight task grows in the future.

Other projected savings for intermodal freight include an average:

$90 per tonne (44 per cent) reduction along the entire route from Melbourne and Brisbane;
$184 per tonne (47 per cent) reduction between Brisbane and Parkes, connecting to Perth;
$48 per tonne (22 per cent) reduction from Brisbane and connecting to Adelaide; and
$62 per tonne (31 per cent) reduction for regional intermodal freight to and from major metropolitan centres and ports.

The modelling projects a 40 per cent reduction in transport costs for freight travelling to Queensland, a 31 per cent drop for New South Wales, and a 37 per cent saving for Victoria.

With transport being a significant expense for Australian businesses and a deciding factor in market growth, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Barnaby Joyce said the modelling showed the positive impact Inland Rail would have on regional industries.

“Inland Rail gives us the greatest opportunity for boosting economic development in regional areas, which is why we are delivering the project as quickly as possible,” the Minister said.

The Minister said the savings will be felt by supply chains.

“Reducing freight costs for businesses and industries along the route means they can expand and hire more Australians, helping regional economies grow into the future,” he said.

Inland Rail is the largest transport infrastructure project in the Federal Government’s $110 billion infrastructure pipeline. At the peak of construction, it will support more than 21,500 jobs.

Once fully operational, Inland Rail will take 200,000 trucks off the road each year, or 150 B-doubles for each train travelling between Melbourne and Brisbane. It will be the first time every state in Australia is connected with a standard gauge line.

CSIRO has undertaken extensive independent research and consultations over two years to understand which supply chains might use Inland Rail. This research was used as inputs for CSIRO’s Transport Network Strategic Investment Tool (TraNSIT)– which represents the largest supply chain mapping of Australian freight.

The logistics tool uses detailed vehicle operating costs models for both road and rail transport, which are applied to every supply chain movement, from point of production through to the market or export port.

To access the Inland Rail Supply Chain Mapping Project, click here.