Freight rise for WA grain

26 Feb, 2003 10:00 PM
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AWB has increased rail freight rate estimates by an average 92c per tonne.

WA manager Lisa Wilson said the poor yield in WA and more deliveries direct to port forced AWB to increase freight costs. It was an increase of 6pc on previously quoted freight rates.

Ms Wilson said AWB had limited the increase with commercial insurance and carryover initiatives.

"The rates are still an estimate and there could still be some change but is should be marginally," she said.

"With the harvest falling below previous forecasts and the fact that more growers are delivering directly to port, it means volumes of grain on rail have been lower than expected and this is putting upward pressure on per-tonne rail rates across the state."

The Grain Pool and AWB are locked into an industry rail freight agreement which included a base fee of $29 million to transporter ARG.

It was agreed to by the three groups, WAFarmers and the Pastoralists and Graziers Association.

"When this lump sum is allocated to individual per-tonne freight rates, the size of the year's rail task is the critical factor in determining the freight rate," Ms Wilson said.

"We have seen an increase in the number of farmers who are delivering direct to port, with the products and services being offered at those sites dragging grain away from up-country rail sites.

"The result of this is few tonnes across which to allocate the rail fixed cost, which equates to a higher dollar cost per tonne on grain delivered to CBH sites serviced by rail."

The seven-year freight contract has four years remaining and a mid-term review was expected at the end of this year.

"We don't think the agreement is working in the best interests of growers and we are working on a submission for the review," Ms Wilson said.

"It has a volume component and could extend to 2007 or even 2009 if we don't return to normal yields. There is a need to support the rail infrastructure but this should be balanced with costs to the industry."

The latest rate update was on the AWB website, www.awb.com.au

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