The DEC of freight rail in Victoria is projected to increase from $29 million in 2011 to $39 million in 2031, a rise of 36 per cent.
Victoria has an extensive rail network, which is shared by freight and passenger services. However, only one per cent of intrastate and interstate freight movements in Victoria are served by rail,318 with road transport accounting for 89 per cent of movements, and sea transport 10 per cent. As in other states, rail freight struggles to compete with road freight, especially over short distances, where relatively low charges for road use make road freight more cost effective. Other factors explaining rail's low mode share are the low level of investment in intrastate freight rail networks, poor asset condition and performance, and need for transport from warehouse to rail depot and vice versa, which is uneconomical for short distances.
Victoria's freight task is projected to nearly double by 2031, from approximately 60 billion net tonne kilometres in 2008 to 110 billion net tonne kilometres in 2030, and from around 2.6 million twenty foot equivalent units (TEU) in 2008 to 6.6 million TEU in 2031.319
With this increased task, the Victorian Government notes that unless there is a significant modal shift from road to rail freight, road congestion in Victoria will lead to significant economic costs. As a result, the Victorian Government has recently increased investment in freight rail in order to increase rail's mode share of Victoria's total freight task. The rail freight task is forecast to rise from 8.4 billion net tonne kilometres in 2012 to 17 billion net tonne kilometres in 2031.320
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318. Victorian Auditor-General's Office (2010)
319. Victorian Department of Transport, Planning and Local Infrastructure (2013)
320. Victorian Department of Transport, Planning and Local Infrastructure (2013)