The Government of Victoria in Australia, in collaboration with the federal government, is set to introduce a port-rail shuttle project to improve rail connectivity between the Port of Melbourne and major freight hubs by utilising existing rail infrastructure.

The A$58m ($46m) project will make use of the rail network’s ability to transport larger volumes of freight to important freight hub businesses.

It will also help to significantly reduce congestion around Melbourne and improve traffic in Victoria’s capital.

The government is expected to seek expressions of interest for the project in the near future.

Federal Minister for Infrastructure and Transport Darren Chester said: “The freight and logistics industry had identified rail’s potential to reduce transport costs by about 10%, with the proposal potentially improving Australia’s competitiveness, which is why the Australian Government is investing A$8.4bn ($6.6bn) in the Inland Rail project connecting Brisbane and Melbourne.”

"With container numbers expected to double over the next two decades, we need to act now to share the load between road and rail."

The initiative is expected to reduce the number of freight-carrying trucks on local roads significantly upon completion.

Victoria Minister for Roads, Road Safety and Ports Luke Donnellan said: “With container numbers expected to double over the next two decades, we need to act now to share the load between road and rail.

“Alongside the West Gate Tunnel, 24-hour truck bans in the inner-west and the Port’s rail access plans, this project will help shift containers from residential streets onto dedicated routes to the port.”

The federal government will provide A$38m ($30m) for the project, while the state government has committed an additional $20m ($16m).

The funding will be use to modernise the rail connections and upgrade access to terminals.