The new road network will be critical for developers.

The new road network will be critical for developers.

Three recent Melbourne projects foreshadow a potential revolution in the city’s industrial markets from long-promised rail transport.

Last week, Bunnings opened a 45,000 square metre warehouse - four times the size of the MCG playing field - at Salta’s industrial estate in Dandenong South, and food group IMCD opened a warehouse at Austrak/GPT’s estate at Somerton, in Melbourne’s north.

Last month, shipping company Maersk launched a container handling facility on 5 hectares at Salta’s estate in Altona.

These large industrial estates are intermodal rail terminals, sometimes dubbed ''inland ports'', where freight is exchanged between trucks and trains. Queensland rail operator Aurizon also has a small intermodal terminal at Laverton.

The developments reflect private-sector confidence that the state government will fulfil its $58 million budget pledge (including $38 million from the Commonwealth) to establish port rail shuttle services - the Metropolitan Intermodal System - in partnership with business.

The policy is broadly bipartisan - the Bracks and Brumby Labor governments had similar plans. 

But the key to making the terminals work lies at the Port of Melbourne, where a 1600-metre rail link parallel to Footscray Road and running alongside the stevedores’ land at Swanson Dock lies half-buried in the ground, unused. 

''It probably hasn’t been in regular use for 25 years,'' said Salta’s executive chairman, Sam Tarascio.

The rail just needs to be upgraded; it’s already connected to the main rail network. 

At the inland ports, all that is required is for the government to cut an offshoot from the  Cranbourne line into the estate at Dandenong South, where Salta is completing earthworks for rail.

The Altona connection off the main line has already been done;  Salta will reticulate the internal rail tracks. Somerton already has rail - six tracks (four dual gauge and two standard gauge  - 750 metres in length.

''We are on the cusp of getting an efficient Melbourne inland port system,'' Mr Tarascio said.

Government policy envisages a tender for private rail operators to run 600-metre long, short-haul shuttle trains between the port and the intermodal terminals.

Salta is keenly waiting for the rail connection to be made at the Port of Melbourne. ''We will complete our rail earthworks immediately the interface at the port is done,'' Mr Tarascio said.

Austrak’s national development manager, Clarenzo Perna, said not having rail defied common sense. ''Logistics is based on being logical. As Melbourne’s roads become more congested, rail is the logical solution. It’s illogical that it is not happening.''

It’s all about using rail at the ports to minimise the impact of trucks in and around the port, and having the trucks at the intermodal hubs from where they will transport the goods to company warehouses.

The Maersk facility, for example, was previously at Francis Street in Yarraville, where residents have bitterly complained about local truck traffic. The containers will now be moved by rail, saving up to 45,000 truck movements annually.

Colliers International’s national director of industrial, Tony Iuliano, said intermodal terminal could only work if rail was sustainable from a cost point of view.

''Only a small percentage of tenants viewed intermodal ports as viable. They are still using B-doubles all over the place,'' he said.

''Until there is critical mass and inland ports are cost effective, I’m not sure anything is going to be economic. There will be a spin-off effect, but it must be cost effective or it will not work.''

Mr Tarascio said at the moment, importers had three days in which to pick up containers at the port, otherwise they went into storage at high cost. ''That storage is finite. The port does not have enough land,'' he said.

This in turn created ''back of house'' congestion, while ships then had to wait in the bay at extra cost before they could unload. This also fed into the higher prices that consumers paid for goods.

Mr Perna said there was an additional surcharge of about $85 a container using rail, compared to no charge for trucks, undermining the incentive to use rail.