Chink of light on logistics front

MENTIONING grain freight logistics to farmers over the past 20 years has been enough to send them into a deep funk.

Aging track, a lack of investment in new train sets and wagons and the long running conundrum of the variance in rail gauge meant there were grave concerns about the ability to physically move a big crop to port.

Without a nationalised exporter, others were concerned there was no incentive for marketers to invest in infrastructure.

But while things are still dire – with delays in many ports, there are slowly some signs of the turning of a corner in terms of getting an adequate freight network together.

And business is leading the charge.

GrainCorp’s risky investment in take or pay train sets leased from Pacific National, forged when the memories of the drought were fresh in our minds, is paying handsome dividends, and other grain exporters are getting in on the act.

Cargill has the El Zorro train network, while Emerald is also set to make an investment in upcountry rail infrastructure.

All this adds more capacity, which is a good thing.

And the much maligned decision by the bulk handlers to focus on major receival sites is also paying dividends in terms of efficiencies.

These big sites are able to outload grain quicker, which allows the grain to come in quicker, which all would agree is a good thing.

And market forces are starting to forge their own dynamic, with marketers prepared to pass on some of the savings from using the bigger sites, with higher prices available at the more efficient storages.

The ports are another flash point in terms of disruptions, but the news that the port of Portland has been able to turn around its fortunes and become a serious player in exporting grain shows change is possible.

Grain export businesses are stepping up in terms of investment – but let’s hope this does not mean government will see this as an opportunity to leave the freight network to someone else.

A lot of good work is being done, but crucial track upgrades, whether it be standardisation or just maintenance to allow train sets to operate safely and quickly are crucial.

There has been work done, such as the Victorian Fisher report and the Grain Logistics Taskforce report.

The recommendations are there, now its to be hoped governments across the country will act on them.

Infrastructure work isn’t cheap – but as a nation-building investment that has economic, environmental and social benefits it will prove pretty hard to beat as a legacy.

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READER COMMENTS

junior
16/01/2012 11:15:58 AM

How can Graincorps "risky investment in take or pay train sets" be that risky when they did not have to pay for them. Now they are making "handsome dividends" out of "old train sets" that PN couldn't, and they did not have to pay for them.
Grain of TruthRural Press grains writer Gregor Heard on the big issues facing the broadacre farmers today.

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