Local Exporters keenly await clarification on the future of the Victorian "Mode Shift Incentive Scheme" (MSIS) as questions arise over the continuation of the Scheme that promotes the use of Rail over Road freight transport.
Wimmera Container Line General Manager, Tim Guidera, said the MSIS scheme has played a key role for Regional Exporters over the past decade but it needs an overhaul to attract more to use rail to get their containers to the port.
MSIS provides a discount to Exporters for each container they transport via rail.
The Initial MSIS subsidy rate of $100 per 20-foot (6.09m) container has reduced by 20 per cent during the past decade, rather than increase in line with inflation each year.
WCL activity is capped to 12,000 20-foot containers per annum as qualifying for a MSIS incentive.
Rail volumes by existing clients in the Wimmera consistently exceeds this cap each year so there is currently insufficient incentive to pass on for all prevailing client activity and there is certainly no rebate available to offer to any potential new clients with additional activity.
"This year WCL will Rail more than 14,000 containers to the Port of Melbourne but this is well down on the 20,000 containers we Railed in a prior bumper harvest year," Mr Guidera said.
Rail providers can flex capacity to meet peak seasonal demand by running more frequent services and longer trains when warranted. Rail services reduce road trauma, road congestion, road wear and tear and carbon emissions with containers transported on rail kept off trucks on major transport routes to the city.
Rail offers these significant benefits to the community but apart from MSIS there is no cost incentive for Exporters to choose rail over road options.
This is particularly the case for high volume clients over shorter "Intra-State" rail routes as they come under increasing competition with road and bridge upgrades allowing heavier cargo containers and longer trucks to travel on highways.
"There is also ongoing uncertainty due a lack of a long-term commitment to the mode shift scheme" he said.
"We won't know until late May whether the mode shift incentive scheme will continue and, if so, what terms will apply from July 1 this year.
"There are significant export projects proposed for the region that are now looking at their transport options. Rail would be better placed over Road if there was significant and guaranteed incentive available to these 'new' potential clients to select Rail over Road and avoid the community costs the latter option will invariably present."
Member for Lowan Emma Kealy questioned the Victorian government's commitment to continuing the scheme.
She said regional rail freight operators needed certainty on the scheme's life and wanted the government to expand the use of its rail infrastructure.
"We are investing significantly in rail freight - with the Mode Shift Incentive Scheme a vital way to improve efficiency and slash congestion across the network."
"We know rail freight reduces congestion on our roads and has a lower environmental impact, which is why rail freight will continue to play a crucial role in the future of Victoria's Ports and Freight industry.
"But since 2018, Labor has cut $3 million of funding to the MSIS and is relying on a year-to-year funding model.
"This is just another example of how wrong Labor's priorities are when they are shifting more freight off the rail and onto our already dangerous roads.
Ms Kealy said she was aware of at least one export company that had decided to move their freight from rail to road due to uncertainty over the mode shift scheme.
Minister for Ports and Freight Melissa Horne defended the Victorian government's position on rail freight and said several rail transport initiatives were in the works for 2021.
"We are investing significantly in rail freight - with the Mode Shift Incentive Scheme a vital way to improve efficiency and slash congestion across the network," she said.
"We know rail freight reduces congestion on our roads and has a lower environmental impact, which is why rail freight will continue to play a key role into the future of Victoria's Ports and Freight industry."
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