Qube has abandoned corporate partnerships with Salta Properties and Austrak in Melbourne because it says Victoria has no strategy to get metropolitan freight onto rail and develop suburban intermodal terminals. Intermodal hubs are where containers are transferred between trains and trucks. Instead, Qube​ will concentrate on developing the Moorebank rail freight precinct in south-west Sydney with rail group Aurizon – a precinct that Qube​ is confident will become the biggest intermodal freight hub in Australia. Mr James said already one big customer in the Riverina had shifted its freight to Qube's​ regional train to Sydney, not Melbourne. Melbourne has three potential metropolitan intermodal​ hubs: a 180-hectare site at Lyndhurst in Dandenong South, owned by Salta Properties; the Austrak terminal at Somerton in the north; and a smaller Salta site in Altona. Sydney has five intermodal terminals. The State Government did not reply to a request for comment about the implications the shift in focus to Sydney will have on local businesses.

Qube​ has withdrawn from an agreement with Salta to develop Lyndhurst and at the end of June gave up its rail terminal lease at Somerton. "Melbourne has stagnated. We have not seen a serious government push for modal shift to rail," Mr James said. "We are not wasting any more time on that in Melbourne." In contrast, before privatisation the NSW government spent $1 billion upgrading the infrastructure at Port Botany, which has a dedicated standard gauge freight line. "So Botany today handles at 2.2-2.3 million TEU, but has the infrastructure that could take it to 7-9 million TEU," he said. This was similar to Melbourne's estimated capacity of 8 million TEU. The Sydney Intermodal​ Terminal Alliance (Qube​ 67 per cent and Aurizon 33 per cent) will spend $1.5 billion developing the 240-hectare Moorebank over the next 10 years. "Our master plan is to put in 850,000 square metres of warehouse, an import and export rail terminal, and an interstate rail terminal, handling a total of 1.5 million TEU," he said. Mr James said road costs would increase through government fuel imposts, road user charging mechanisms and higher tollway charges. "Road congestion will become a bigger issue. That's where we are in Melbourne with road congestion," he said. In Sydney, Qube​ also operates as a metro intermodal​ operator at Yennora and Minto; the third stevedore Hutchison will use the Enfield intermodal​ terminal; while stevedore DP World and Toll Group have a joint venture to use an intermodal freight terminal at Villawood.

In Melbourne, Mr James said rail terminals should be built on dock and the stevedores should load trains at the same price they load trucks, as basically happened in Sydney. Otherwise, "you will put an additional cost into the intermodal business, and therefore it won't be economic". The chief strategy officer at DP World, Brian Gillespie, said Sydney congestion was at a different level from Melbourne – hence the joint venture with Toll. The company was open to developing metro intermodal in Melbourne, "but we have no tangible plan in place at this point", he said. "Metro intermodal will come – it's a question of gravity." Mr Gillespie said DP World's biggest obstacle to on-dock rail was Coode Road, a public road that bisects the company's two terminals – the quay side at West Swanson dock, and the rail connection on the other side of the road. This year's Victorian budget confirmed the previous government's $58 million project to connect rail to the port, but the Federal Government has now threatened to use its $38 million contribution elsewhere if the rail project does not go ahead. "The funding will be re-allocated to other productivity-enhancing projects in Victoria," a spokesman said. The Shadow Minister for Ports, David Hodgett, said rail should be mandated – at the very least encouraged – as part of the privatisation of the port. "I would have thought it would increase the value of the port. It's very short-sighted not to mandate or include the need for rail," he said.

Mr Hodgett said if a winning bidder would probably not invest in rail unless there was a financial incentive. "The danger is after the sale, the government would lose control and we may never attain rail," he said.