A new $26 million freight incentive program will test whether financial support can shift more containerised freight from Australian roads onto rail while reducing diesel consumption and increasing transport resilience.
Round 1 of the Transport Resilience and Capacity Kickstart (TRACK) pilot program is open to eligible rail freight operators, with incentive payments available for additional freight moved by rail above agreed baseline volumes.
The funding forms part of the broader $52 million TRACK program, which aims to encourage more fuel-efficient freight movements across Australia. Later rounds are expected to include maritime freight alongside rail.
Applications opened on 11 September and close on 1 October 2026.
Incentives target additional rail freight
Rather than funding conventional rail infrastructure projects, the first TRACK round will provide payments based on additional eligible freight movements.
Operators must move loaded twenty-foot equivalent units, or TEUs, above an accepted baseline during the project period, which runs through to 30 June 2027.
Individual applicants can seek up to $10 million.
The program will assess proposals primarily on their potential to conserve diesel, alongside their alignment with broader program objectives and their contribution to longer-term rail freight resilience.
The pilot will also test whether per-TEU incentive payments can generate a measurable shift of freight from road to rail.
That distinction makes the program relevant beyond its initial funding round. Its results could provide evidence on whether direct incentives can change freight allocation between transport modes.
Rail sector backs greater modal shift
The Australasian Railway Association (ARA) has backed the program, arguing that recent pressure on fuel supplies has strengthened the case for making greater use of rail freight.
ARA Chief Executive Officer Caroline Wilkie said shifting freight onto rail could improve fuel efficiency while strengthening supply chain resilience.
“The recent fuel crisis confirmed that we must move more freight on rail to increase the fuel efficiency and environmental performance of the national network,” Wilkie said.
“Moving more freight by rail is one of the practical measures Australia can take now to reduce transport emissions while improving the efficiency and resilience of our national supply chains.”
The ARA’s position reflects the rail industry’s support for modal shift, while the pilot itself will provide an opportunity to measure how operators respond when incentives are tied directly to additional freight volumes.
Growing freight task puts pressure on transport networks
Australia’s national freight task is projected to increase by around 26 per cent between 2020 and 2050.
Accommodating that growth will require additional capacity across road, rail, ports and shipping rather than relying on a single transport mode.
Rail can provide an alternative for freight travelling over longer distances and between major terminals, particularly for containerised and bulk movements.
Road transport remains essential for first- and last-mile connections and freight movements where rail is unavailable or unsuitable.
Increasing rail’s share of suitable freight could therefore complement rather than replace road transport, while potentially reducing pressure on some road corridors.
Fuel security adds another dimension
TRACK also forms part of a broader effort to reduce the freight sector’s exposure to diesel supply disruptions.
Australia’s freight network depends heavily on liquid fuels, meaning changes in global fuel availability and prices can quickly affect transport costs and the movement of essential goods.
Shifting suitable freight onto more fuel-efficient modes can reduce the amount of diesel required to move the same volume of goods.
The Federal Government introduced TRACK under its wider fuel security measures, with the program designed to conserve diesel while improving supply chain resilience.
For freight operators, however, decisions about transport mode also depend on factors beyond fuel consumption.
Transit times, rail capacity, terminal access, service frequency, reliability, handling costs and first- and last-mile connections can all influence whether rail provides a commercially viable alternative to road freight.
Freight advisory structure expands
Alongside TRACK, the government has refreshed the Freight Industry Reference Panel, which advises infrastructure and transport ministers on freight and supply chain issues.
Michael Byrne AM will continue to chair the panel, supported by members including Marika Calfas AM, Hermione Parsons, Peter Allen and Ian Porter.
Three specialist subcommittees will cover heavy vehicles, rail, and ports and shipping.
The structure is intended to provide more mode-specific industry advice as governments implement the National Freight and Supply Chain Strategy and its National Action Plan.
The specialist groups could also provide a forum for examining how individual transport modes interact rather than treating road, rail and maritime freight separately.
Pilot will test whether incentives change freight movements
The first TRACK round ultimately represents a test of whether financial incentives can generate additional rail freight rather than simply support movements that would have occurred anyway.
Applicants will need to demonstrate freight volumes above established baselines, and projects must undergo independent assessment against agreed performance measures.
That should provide data on how much additional freight the incentives generate and how effectively those movements reduce diesel consumption.
Later rounds are expected to extend the approach to maritime freight, allowing the government to explore the role of both rail and coastal shipping in reducing reliance on road-based diesel consumption.
For Australia’s supply chain sector, the significance of the pilot will therefore depend less on the $26 million available in its first round and more on whether it demonstrates that targeted incentives can produce a sustained shift towards a more diversified freight network.
Also read: NSW maps 20-year freight network plan for Central West, Orana
Yvette is a Content Producer at Akolade, producing stories for Supply Chain Channel, an Australian learning ecosystem created to address the need for information, networking, case studies, and empowerment for everyone in the supply chain sector.
