Melbourne’s air and sea ports lead the charge

Port of Melbourne

The state of Victoria has left NSW behind in every measure, with its economy and population growing multiple times that of its northern neighbour. Charles Pauka reports.

The additional 1,200 people settling in Victoria every week are putting a major strain on the state’s public infrastructure (roads and public transport, health and education), resources (electricity and water) and housing. While some commentators and citizens believe the growth to be excessive and unsustainable, the Victorian capital’s two major access providers – Melbourne Airport and the Port of Melbourne – are stepping up their development plans to cope with the fast-growing freight sector.

An airport to envy

Located a mere 22 km from the city centre, Melbourne Airport’s massive 2,647 hectares give it unrivalled flexibility in planning and land use. The vast area also allows for 24-hour, unrestricted, curfewfree operations, a feature that has been guaranteed by planning controls that limit land use and building design.

Melbourne continues to suffer from ‘second fiddle’ status syndrome as international airlines have more flights into Sydney, but this situation is likely to change in the near future, according to Melbourne Airport’s freight manager, Lil Valente. “We already punch well above our weight when it comes to freight,” he said. “Of the three east coast airports [Melbourne, Brisbane, Sydney], we get 25% of the international passenger traffic, but handle 36% of airfreight.

“This is understandable, given that 85% of freight moves in passenger planes’ cargo hold (‘belly space’). But more and more airlines are either starting up or increasing their international services to/from Melbourne.”

In calendar 2007, the three Chinese airlines (Air China, China Southern and China Eastern), as well as Cathy Pacific, Korean Air, Philippine and Thai Airlines all added more capacity, and the airport handled more than 300,000 tonnes of airfreight. Lil Valente rues the ‘leakage’ that his airport is suffering to Sydney. “Every day, air freight is heading up the Hume to Sydney on trucks for lack of capacity out of Melbourne,” he said. “We are also aware of a need for 70,000 extra seats a year out of Melbourne to the USA alone. The airline industry is running hot, and Airbus and Boeing can’t keep up with demand.”

He believes, however, that the situation is changing. “We have put in place an information campaign to attract more airlines,” he said. “The airport master plan has provision for four runways (two E-W and two N-S), and we’ll be curfewfree forever. We are ready for the A380, and external access to the airport has also been improved out of sight.”

Melbourne Airport is planning to grow itself into a significant freight hub, with extensive vacant land to be developed into warehousing and distribution-focused commercial areas. Big players already on site include Star Track Express, Australia Post, Australian Air Express, Toll, Kathmandu, The Reject Shop, and many others. These areas have direct access to the Western Ring Road and will connect with the new, expanded airfreight section of the airport itself. Eventually moving to the eastern side of the airport, the freight area will have parking facilities for up to six A380 freighters (and up to 15 on the ultimate plan). Freight traffic can already access this area from the Tullamarine Freeway without having to go through passenger areas.

“Everything we put in the master plan is on track,” said Lil Valente. “And with Melbourne’s population poised to overtake Sydney’s within 15 years, the airport has the land, the capacity, the plans and the will to ensure we will be ready.”

The ship can finally come in

The Port of Melbourne has already surpassed all others and long been the busiest container port in Australia. Last financial year, Melbourne handled over two million TEU in contrast to Sydney’s 1.6m, recording its 16th year of continued growth and an 8.5% increase on the previous year. 339,000 motor vehicles arrived and departed through the port in 2006-07.

And the statistics just keep getting better. Last year’s container trade result was a massive 8.5% up on the previous year’s, and in the 12 months to March this year, 2.2 million TEU were handled.

The port’s bugbear has long been its inability to receive fully-loaded larger containerships, due to Port Philip Bay’s shallow draught of just 12.1 metres at high tide. With all legal obstacles finally overcome early this year, the channel deepening is now progressing apace and is ahead of schedule. The project, for which the corporation has budgeted $961 million, is paid for in part by a $31.50 per TEU levy imposed on import containers, which is indexed to inflation from July 2009 and will continue for 30 years.

The Port of Melbourne’s Master Plan to 2030, reviewed in the December/January 2007 issue of Australasian Freight Logistics magazine, is proceeding on schedule. Sir Rod Eddington’s recently-released report on Melbourne’s infrastructure needs may add to the corporation’s task, however, as he identified additional roles for the port in managing the freight task.

And this has not much to do with the port’s traditional, sea-facing role; rather, Sir Eddington is concerned about the ability of the port to function if its land-side interface is not improved – in other words, there must be a quantum improvement in the removal of containers from the port, and this must be done by rail.

Sir Eddington notes: “For rail freight’s share of port traffic to grow, effective and focused governance is needed. The Port of Melbourne Corporation is ideally suited to take on this responsibility.”

The Victorian Government is accepting public submissions until 15 July 2008, after which it will formulate its response. Australasian Freight Logistics magazine will run a full report on the direction of Melbourne’s urban rail/intermodal and road links to the port following the release of the government’s response.

* Excerpted from Australasian Freight Logistics Issue 12, June/July 2008 (pp.20-1)

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