New Rail Network to Slash $200 Million in Transport Costs for Australian Businesses

Empty train tracks are seen at Waverton Station on the Lower North Shore in Sydney, Australia, on Dec. 07, 2021. (James D. Morgan/Getty Images)

Australian businesses could save over $200 million (US$144 million) in freight costs each year if they switch to the under-construction Inland Rail once it is completed, new research has found.

According to the Commonwealth Scientific and Industrial Research Organisation (CSIRO) modelling, the 1,700 kilometre Inland Rail network would drive down the cost of transporting 22 million tonnes (24.2 million tons) of goods by $213 million per year.

The CSIRO’s research (pdf) published on March 15 revealed that over 12,000 supply chains, 5,000 enterprises and 94 commodities, including coal, steel and grain, would benefit from the reduction in transport costs.

More specifically, businesses adopting the new rail network would be able to cut down transport fees by nearly 50 percent for freight moving between Melbourne and Brisbane.

And among the states along the new rail routes, Queensland will see the largest saving with a 40 percent reduction in freight costs, followed by Victoria and New South Wales (NSW) at 37 percent and 31 percent, respectively.

The report also indicated that Inland Rail could decrease freight costs by more than $80 per tonne (US$58 per tonne).

Deputy Prime Minister Barnaby Joyce said that the cost of transporting goods and commodities to ports would fall for businesses transitioning from road to rail.

“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,” he said.

“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.”

Deputy Prime Minister Barnaby Joyce reacts during question time in the House of Representatives at Parliament House in Canberra, Australia, on June 22, 2021. (Sam Mooy/Getty Images)

On average, the Inland Rail will potentially reduce freight costs by $168 for every tonne of vehicle transported through the network, $99 for each tonne of horticulture products, $87 for general freight, and $40-$60 for other types of products.

In addition, the Inland Rail is predicted to replace 20,000 trucks every year when it commences operation, and each train trip between Melbourne and Brisbane can do the job of 150 B-doubles – a truck and trailer combination that consists of a prime mover linked to two trailers.

Construction on the project, which establishes a network of freight lines between Melbourne and Brisbane through regional Victoria and NSW, started in 2018 and is anticipated to conclude in 2027.

Federal Finance Minister Simon Birmingham said Inland Rail would help bring out more competition for freight companies.

“CSIRO’s modelling shows how Inland Rail could slash transport costs for more than 90 commodities across Australia,” he said.

“This highlights the significance of building a national freight network that gives producers and businesses better access to domestic and international markets at competitive prices.”