MHD PROPERTY FOCUS
INLAND RAIL AND THE IMPACT ON LOGISTICS STRATEGY Carl Knaggs, National Director, Strategic Advisory at Colliers International discusses the impact of Inland Rail on the future of logistics in Australia.
70 | MHD SEPTEMBER / OCTOBER 2019
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nland Rail is a significant investment in Australia’s freight future which moves toward a national freight strategy by connecting regional supply chains to domestic and international markets. Comprising 13 individual projects and spanning more than 1,700 km across Victoria, New South Wales and Queensland, Inland Rail is the largest freight rail infrastructure project in Australia. Construction of Inland Rail commenced in late 2018 and it is expected to be fully operational sometime in 2025. Around two thirds of Australia’s export earnings come from regional industries including agriculture, tourism, retail services and manufacturing. Inland Rail will improve the volume, efficiency and the cost of transporting those products and services to capital cities and global markets. This would help to ensure growth in Australia’s regional exports and a reduction in costs, particularly for long haul bulk commodities and products. The impact of Inland Rail will be far reaching and is expected to generate significant investment into regional Australia. This is due to the nature of rail transportation which typically
has lower costs and better service efficiencies than road transportation. These efficiencies will cause businesses to reassess their supply chain and logistic strategies, including the location of distribution centres (DCs) and the choice between centralised or decentralised models. Efficiencies associated with Inland Rail may also open new market opportunities to freight and supply chain operators, producers, manufacturers and property developers. Examples of the key users likely to benefit from Inland Rail include Woolworths; Coles; Linfox; Toll; Graincorp; Bluescope; and Visy. We anticipate that a range of other providers in cold-store warehousing, commodity storage and processing, distribution centres, freight handling facilities, container storage and rail maintenance will also benefit. Inland Rail will also impact distribution structures such as the spatial layout of the freight transport and storage system used to move goods between production and consumption locations. Decisionmaking on distribution structures, including DC locations will influence logistical costs and service levels
