Freight and Logistics Plan fails Melbourne Airport

It is "woeful" that the State Government's Freight and Logistics Plan does not include connecting access upgrades to Melbourne Airport, Melbourne Airport, Chief Executive Officer, Chris Woodruff has told a CEDA forum in Melbourne on freight and logistics.

Melbourne Airport's freight exports grew by 16 per cent last year, making it the largest air freight export hub in Australia, he said.

"Over the next 20 years we are investing billions of dollars transforming the airport and creating jobs and supporting the State's road strategy," he said.

Mr Woodruff said Melbourne Airport is doing what it can by investing in a new domestic terminal, a multilevel ground transport hub, airfield infrastructure and connecting roads but they need more assistance from the State Government to support growth.

"We need a rail link and we need road improvements connecting Melbourne Airport to the major freeways," he said.

"We are a major economic driver in this State and we expect the State to come to the party."

Another key issue discussed at the forum was that Australia's productivity could be improved by opening coastal shipping to Australian manufacturers.

Port of Melbourne Corporation, Chief Executive Officer, Stephen Bradford said: "We think the government, in looking at logistics and productivity in this country, has one clear need in the next six months - open coastal shipping to Australian manufacturers."

Mr Bradford said current policy settings, which require vessels who are trading along Australia's coast to be crewed by Australian citizens, permanent residents or appropriate work visas, mean it is cheaper for some states to import goods rather than ship them from other Australian states.

"We've closed the Australian coast to those who want to ship between Australian states on the blue sky promise of an Australian fleet, crewed by Australians," he said.

Australian Logistics Council (ALC), Chief Executive, Michael Kilgariff said asset recycling and coordinated nationally consistent bidding processes are needed to unlock future infrastructure funds and encourage private investment.

Quoting National Secretary of the Australian Workers' Union Paul Howes, Mr Kilgariff said that Australia has to move beyond its ideological aversion to the privatisation of assets.

"We think the Port of Melbourne is ideally suited to being leased long term to release funds for road and rail infrastructure," he said.

"The funds raised could go towards the logistics, or land side logistics requirements, generated by the new Port of Hastings."

In addition, Mr Kilgariff said private investors are deterred by the current bidding process for major infrastructure projects across Australia and this must be streamlined to address Australia's infrastructure backlog.

"These inconsistent processes and procedures across state borders add to the cost and complexity and acts as a disincentive to potential private sector investors," he said.

"ALC would like to see greater national consistency and transparency surrounding bid documentation which will need to be spearheaded by the Commonwealth."

Victorian Minister for Public Transport and Roads, the Hon. Terry Mulder said freight and logistics is an important contributor to the State's GDP, but will need to meet growth challenges in order to maintain its competitiveness and sector leadership.

"Victoria's long term population growth will be one to two per cent per year, and Gross State Product (GSP) at around two and a half per cent," he said.

"However, freight will grow at a faster rate than both population and GSP, and the greatest growth will be seen in container numbers, which will quadruple from 2.5 million a year to about 11 million by around 2050."

Mr Mulder said the Victorian Freight and Logistics Plan, launched by the Premier in July is designed to ensure Victoria meets the growth challenge as well as maintain the State's leadership role.

Mr Mulder outlined the plan's key priorities for action, including:

  • International gateway capacity;
  • Interstate gateway capacity;
  • Better use of the existing network; and
  • Additional network capacity.

The first priority includes the Port Capacity Project at the Port of Melbourne ensuring container capacity until mid-2020.

"In the longer term, the Port of Hastings will ensure we have a second container port to meet the challenges of future growth in our container volumes," he said.

"The Port of Hastings is an excellent proposition as a second port. It offers the twin advantages of being a natural deep water port and having large landside area zoned for future port use.

"The Government has allocated $110m over four years to begin the process of creating it.

"We can get Hastings operational within 10-12 years which coincides with when the Port of Melbourne will be at capacity.

"We've estimated that we can deliver (the Port of) Hastings for less than $10 billion."