Port of Melbourne Freight and Logistics Analysis

Executive Summary

The Port of Melbourne (PoM), the busiest port in Australia, is a critical location in terms of national and regional supply chains, with 112.0 million revenue tonnes of cargo in FY2023-24, a record 3.26 million TEU in container throughput. This report discusses the freight profile, infrastructure, logistics practices, and connectivity of PoM.

The strengths of PoM are that the location is strategic, as well as having large infrastructure and the ability to handle various types of cargo. Nevertheless, there are bottlenecks like overdependence on road transport (90% of containers), the limited capacity of terminals, and congestion in the cities. The use of rails is minimal, and initiatives such as the Port Rail Transformation Project (PRTP) and Port Rail Shuttle Network (PRSN) are trying to make sure that rail share is boosted to 30 percent by the year 2050. The problem is complicated further by IMO 2050 carbon reduction targets and climate risks, which are also environmental pressure.

The main suggestions are to speed up PRTP and PRSN to increase the rail connectivity, to incorporate the West Gate tunnel to allow trucks to move efficiently and to switch to digital technologies such as the Freight Data Hub to provide better coordination. In the long run, the development of a second container port (Bay West) and sustainable infrastructure, including shore power and facilities for zero-emission vehicles, will be planned, which will maintain resiliency and competitiveness.

Introduction

The Port of Melbourne (PoM) is located where the Yarra River meets Port Phillip Bay, supporting Melbourne’s city center and Victoria’s farming and factory areas. As Australia’s busiest port, PoM is crucial for national supply chains (Kylie, 2025a). This report looks at PoM’s freight handling (containers, bulk goods, vehicles, etc.) and reviews PoM’s infrastructure, road and rail connections, and logistics methods, pointing out issues and challenges.

Key government plans, such as the National Freight & Supply Chain Strategy, Victorian Freight Plan, and efforts to cut carbon emissions, are checked for their effect on port operations. Using recent trade data, industry reports, and government sources, the report evaluates PoM’s strengths and future prospects. It offers practical suggestions to improve PoM’s efficiency, strength, and eco-friendliness in Australia’s supply chain.

Table 1: Abbreviations used in this report, and their full forms

Port of Melbourne Freight Profile

Volumes and cargo mix

In FY2023–24, PoM handled a record 112.0 million revenue tonnes of cargo, up 2.8% on 2022–23 (Port of Melbourne, 2024). Containerized cargo dominated trade, with 3.26 million TEU throughput in FY24 (2.4% growth). PoM handles both full and empty containers (909,000 empty TEU in FY24). Container traffic accounts for ~76% of all port trade. Other major categories include new motor vehicles (6.4 million tonnes, 412,243 units, +9.9%), liquid bulk (5.9 Mt, mainly petroleum fuels) and dry bulk (5.7 Mt, e.g. grain). Breakbulk (e.g. project cargo, steel) was 10.1 Mt (–1.8%). Over the past decade, PoM’s container traffic has grown steadily (Figure 2), reflecting population and economic expansion.

Container terminals and facilities

Port of Melbourne’s container terminals span Swanson Dock (East and West, two terminals), Webb Dock (Outer Harbour, container and general cargo), and the smaller Appleton Dock (imports autos) (Port of Melbourne, 2025).

PoM handles autos via Webb Dock; it is Victoria’s principal car import hub (e.g. previous local manufacturing exports). Liquid bulk is managed at dedicated wharves (fuel, LPG terminals on the Yarra), while dry bulk (grain, ores) mostly uses Appleton Dock and Tyers and Appleton docks south of Webb. This is how PoM supports a cargo mix with specialized facilities for containers, vehicles, breakbulk and bulk commodities.

Port operations and logistics practices

Port of Melbourne Operations (PoM Operations Pty Ltd) oversees port infrastructure and prescribed services. Major stevedores include DP World, Patrick, and VICT (Victoria International Container Terminal) for containers, and Flinders Port Services for breakbulk/bulk. PoM’s tariff regime (wharfage, berth hire, channel fees) funds infrastructure. The supply chain is shown below.

Import containers are often consolidated by freight forwarders, while exports use full-container loads. Empty container parks (e.g. Containerchain) operate near the port. Road transport is the primary landside mode: about 90% of containers leave by truck (only ~10% via rail) (Infrastructure Australia, 2021). PoM has intermodal rail terminals (Swanson Dock rail, Dynon, Altona) connecting to interstate and local lines. However, imported containers historically have zero rail share (all empty/full import boxes by road) (Infrastructure Australia, 2021). To address this, PoM’s Rail Transformation and Shuttle programs aim to boost rail lift, offering bypass roads and new on-dock facilities (Port of Melbourne, 2025b). In bulk trades, pipeline access exists (e.g. fuel) and regional rail connections serve grain. Overall, the logistics chain involves ocean carriers, stevedores, heavy vehicles, rail, and warehousing – with PoM coordinating efficient throughput for southeastern Australia.

Freight Logistics Practices, Infrastructure, and Connectivity

Port infrastructure

Port of Melbourne comprises multiple precincts as seen in Figure 1: Swanson Dock (East/West – the two main international container terminals), Webb Dock (International, with Container and Breakbulk terminals), Appleton/Coode docks (automotive, fuel, general cargo), and the Melbourne Wharves (general cargo). In total, PoM has 38 km of wharves across six precincts. Recent investments exceed $800M since 2016, funding expanded berths, modern cranes, and the Port Capacity Enhancement Program (PCEP), which added storage yards and expanded Swanson Dock (Kylie, 2025a).

The Port Rail Transformation Project is extending Swanson lead tracks and building a new Coode Road rail terminal (two sidings for 600m trains) to interface with Swanson Dock. These improvements aim to double train capacity. Current rail facilities include an on-dock rail spur at Swanson, as well as nearby intermodal terminals at Dynon (Desktop, North) and the new Kenwick (East Gippsland). Port roads (e.g. Hickman's Road) enable access within Swanson Dock.

Modal connectivity

Melbourne’s port is linked by major highways: West Gate Freeway (M1) and CityLink carry coastal traffic east–west, while the Hume (M31) and Princess (M1 north) Highways connect to national corridors. The new West Gate Tunnel (opening 2025) will create a direct truck link from the West Gate Freeway into the port (via Maribyrnong River and Footscray Road), bypassing local streets (Victoria's Big Build, 2021a). This is expected to remove ~9,000 truck trips from inner suburbs daily. The port also connects to the M80 Ring Road in the north, easing distribution to regional Victoria and interstate (via Calder/Melba Hwy to Bendigo/Adelaide).

On the rail side, Melbourne sits at the end of the ARTC interstate network: the standard-gauge line from Sydney (via Albury) and the north–south inland rail corridor (Parkes–Melbourne, under construction). Dedicated Victorian freight lines (e.g. Dynon to North Geelong) link wheat/sheep regions. The Port Rail Shuttle Network (PRSN) will route local freight via new rails to Somerton, Dandenong South and Altona terminals, allowing trucks to drop containers at those outer hubs instead of reaching the city (State Government of Victoria, 2023). This is critical because 87% of Melbourne’s import containers go to destinations <50 km from the port; PRSN envisions shifting up to 30% of containers by rail by 2050 (State Government of Victoria, 2023).

Performance and efficiency

Port efficiency is measured by vessel turnaround, berth occupancy and landside dwell times. Swanson Dock terminals in Melbourne typically achieve high crane rates and quick discharge times. However, landside efficiency is hampered by truck queuing at terminal gates during peak times. Comparatively, Botany’s regulated truck access (booking slots, penalties) has been more successful at smoothing peaks; Melbourne has no compulsory booking, although PoM monitors truck flow and updates road network status (NSW Ports, 2025). Rail intermodal movements from Melbourne’s terminals (e.g. Nationwide or Pacific National services) carry containers to Sydney, Brisbane and Adelaide, but imported container rail (to Melbourne) was effectively zero until recent years (Infrastructure Australia, 2021). Vessel access at Melbourne is generally reliable, though draft limitations (14.2m depth in the Swanson channel) constrain the largest VLGCs and some heavily loaded ships.

Data and technology

PoM is adopting digital logistics tools. A central Portal of Port Community Systems (PCS) enables electronic documentation and tracking for customs, shipping lines and road transport. Real-time digital displays inform truck drivers of gate wait times and bay availability. The port is working toward data integration with the new national Freight Data Hub (Department of Infrastructure, 2023). Automated technologies are being trialled: yard-automation at Patrick terminals, and drone/UAV use for security. In summary, PoM’s current practices combine modern terminal equipment with incremental modal integration, but still rely heavily on road freight.