KiwiRail has asked the Otago Regional Transport Committee to be involved in a feasibility study for freighting logs by rail rather than road.
The development of rail services for forestry freight would reduce heavy vehicle traffic and road-maintenance costs, the state-owned enterprise said.
Neil Carraher, KiwiRail's Dunedin-based freight representative, spoke in support of the company's submission to the committee at a hearing on the draft regional land transport programme 2012-15 which was held in Dunedin yesterday.
It was KiwiRail's commercial prerogative to explore further opportunities for rail freight, but an integrated approach to land transport in Otago comprising rail and road would benefit the region, Mr Carraher said.
He cited annual volumes of heavy vehicle traffic along main regional routes and said the demand for freight was increasing.
KiwiRail estimated there were annually 450,000 tonnes of logs in the area south of Dunedin available for processing in the medium term, half of which would end up as finished product and the remainder as dust and chips.
The volume of logs equated to 15,000 truck movements in, and 7500 out, of the processing site. For up to $1.5 million, connecting the site to the main south rail line would reduce truck movements by 7500 each year, KiwiRail submitted.
It estimated 400,000 tonnes of logs (about 13,000 log truck movements) were sent to Port Otago each year and better opportunities to transfer logs to and from rail could reduce truck traffic on State Highway 88 by up to 6500 movements annually.
Accordingly, there would be less road damage by heavy vehicles, KiwiRail said.
Last year, KiwiRail increased its Otago operations, carrying 320,000 tonnes, up from 150,000 tonnes in 2010.
The surge was attributed to growth at Fonterra's plants in Edendale in Southland and North Taieri.
Mr Carraher said the Edendale, Mosgiel and Port Otago rail freight operation was a successful example of what could be achieved in the local forestry sector.
"We believe there's significant opportunity to use rail and ask that time and funds be allocated to investigate this," he said.
If the transport committee did a cost-benefit analysis, it would find there were huge financial and social advantages to using freight rail, Mr Carraher said.
"It would be worthwhile having a third party look at what we are doing and what we are trying to achieve," he said.
Options included the development of hubs where freight was delivered short distances by trucks from processing sites, then transported long-haul by rail.
KiwiRail was one of 91 submitters on the draft plan, to be finalised and put to the Otago Regional Council for consideration.
