One of Australia's largest transport companies plans to take more trucks off roads as part of a $1.8 billion deal to move more goods by rail.
The partnership between Team Global Express and Aurizon, announced on Monday, will see seven weekly train services added to the firm's options, potentially cutting carbon emissions for both companies.
The announcement comes just months after the provider formerly known as Toll unveiled plans to roll out Australia's largest fleet of electric trucks in Sydney.
Team Global Express chief executive Christine Holgate said the company's new deal would help firms including supermarket chains transport non-perishable freight by rail, replacing heavy-duty trucks.
"We want to be able to offer customers proper green solutions and clearly rail is the best way to do that," she told AAP.
"We know there's a lot more demand for rail services. There is arguably about 40 per cent less carbon emissions for a kilo moved on rail as opposed to road. It's significantly better for the environment."
Transport is the third largest contributor to greenhouse gas emissions in Australia, with heavy-duty trucks and buses accounting for 22 per cent of transport emissions.
Aurizon managing director Andrew Harding said the 11-year deal would also help the freight operator improve its green credentials.
"It's our biggest non-coal contract ever and that helps us further on our transition to a sustainable future," he said.
"It allows us to double our non-coal earnings over the decade, which is a commitment we made to our investors."
Mr Harding said rail services for Team Global Express would begin in April and ramp up over 12 months as Aurizon invested $120 million in upgrading terminal facilities and freight wagons.
The deal will see freight moved between Sydney, Melbourne, Adelaide and Perth, as well as Brisbane, Sydney and Melbourne.
Ms Holgate said expanding rail transport in Australia could also ensure goods reached more remote parts of the country during floods and fires.
"When there is a natural disaster, some of these routes have stopped and we need to keep the country going," she said.
"We all saw the need to 'feed the west' last year and this will give much more assurance to the country to be able to keep remote communities connected."
Team Global Express's rail investment comes just two months after the company revealed plans to build Australia's largest fleet of electric trucks, with 60 planned for use in its Western Sydney depot.
The first electric trucks from the $44.3 million project, part-funded by the Australian Renewable Energy Agency, are expected on roads in May.
