CSIRO Supply Chain Mapping
Shifting to Inland Rail could save Australian producers, manufacturers and growers approximately $170 million in transport costs each year according to early results of a Commonwealth Scientific and Industrial Research Organisation (CSIRO) supply chain analysis.
Commodities such as grain, wool and milk for example, need transportation from paddock to plate. To analyse the current state of transport costs, we partnered with the CSIRO to map supply chains and identify potential cost reductions for businesses who graduate from road to Inland Rail.
A pilot study completed in March 2019, revealed substantial cost reductions when transporting goods on Inland Rail instead of road. The CSIRO scientists modelled the potential for more than 100 Australian commodities along the Inland Rail alignment.
CSIRO TraNSIT modelling
The CSIRO used their Transport Network Strategic Investment Tool (TraNSIT) to analyse existing regional freight supply chain data and identify transport cost reductions when using Inland Rail. TraNSIT has also previously been applied to test the benefits of road upgrades and calculate transport benefits for industry and government.
This tool, developed by CSIRO, provided an evidence base for industries to maximise the efficiency of supply chains by accessing reduced transport costs using a ground-up approach to optimise transport routes between enterprise and their market. This approach was a key consideration in Australia which is characterised by supply chains with long distances between production, processing and market.
For this project, TraNSIT analysed more than 175,000 annual transport movements of 140 commodities associated with nearly 5,000 industrial enterprises and 11,000 supply chains. The project results provide evidence to inform future public or private complementary investments and operational changes to leverage the benefits of Inland Rail.
Cost Reductions – shifting freight from road to Inland Rail
For existing road-based supply chains, by switching to Inland Rail for at least part of their journey, early results show these supply chains have the potential to capture annual transport cost reductions of about $170 million. Of this, the annual transport cost reduction for freight moving between Melbourne and Brisbane could be $75 million, representing a transport cost reduction of around 44%.
Potential annual transport cost reductions for freight shifting from road to Inland Rail
|Route||Total transport cost reduction ($m)||Transport cost reduction ($)||Transport cost reduction ($/payload tonne)||Avg payload net payload weight per wagon (tonnes)||Payload tonnes with a cost reduction (tonnes)|
|Brisbane and Melbourne||$74.6||44%||$90.67||14.72||822,384|
|Other intercity routes||$39.7||43%||$136.76||17.94||290,128|
Note: Other routes include trips to and from regional intermodals such as Parkes, Toowoomba, Albury and Townsville. Shifting a trip from road to rail requires a road trip from the origin to an intermodal facility, a rail trip from the intermodal facility to the destination intermodal facility, followed by a road trip from the destination intermodal facility to the destination enterprise. Only commodities currently suitable for a modal shift to rail (e.g. based on time sensitivity, and the capacity for modal shift using existing rolling stock and handling/storage infrastructure) were eligible for a modal shift.
Cost Reductions – existing rail freight shifted to Inland Rail
For existing rail-based supply chains, it is estimated Inland Rail is likely to deliver an annual cost reduction of about $21 million by switching to Inland Rail for at least part of their route. Of this, the annual transport cost reduction for existing rail freight moving between Brisbane and Melbourne would be about $15 million, representing a transport cost reduction of about 27%.
Likely annual freight transport cost reductions from Inland Rail for existing rail users (intercity routes)*
|Route between||Assumed backload (%)||Total transport cost reduction ($m)||Transport cost reduction (%)||Transport cost reduction ($/payload tonne)||Avg payload net payload weight per wagon (tonnes)||Payload tonnes with a cost reduction (tonnes)|
|Brisbane and Melbourne||50||$15.0||27%||$30.70||14.83||488,921|
|Brisbane and Perth||78||$5.2||17%||$35.34||17.58||147,177|
|Brisbane and Adelaide||80||$0.7||16%||$20.27||15.97||32,272|
* Freight currently being transported by rail between Brisbane and Melbourne, Perth and Adelaide are likely to switch to Inland Rail due to its superior service offering faster, heavier and better reliability and availability.
Full results will detail the potential cost reduction for 140 commodities and is expected to be released in the coming months.