PowerPoint Presentation - Freight and Logistics Council of Western

31 October 2013
THA – WA FLC Grain Logistics Challenges
Evolving grain industry logistics dynamics
• Australian grains logistics patterns have evolved from largely
static public sector management to fully commercial models
• Until mid 1990s, marketing, handling and transport roles were
fully separated and supported by regulation
• Rapid evolution in all states has led to differing systems under
which private marketers, handlers and transporters compete
• WA system has evolved into an integrated rail-focused export
conveyor belt, but faces competition on several fronts
• Government are starting to plan for the foreseeable outcomes
on road and rail networks
THA – WA FLC Grain Logistics Challenges
Production limits
• Climate change is compounding natural seasonal
• Yield improvements now incremental only
• Warmer springtime, lower winter rainfall raises
chance of crop failure in north and east
• Potential for record seasons, but interspersed with
poor years
THA – WA FLC Grain Logistics Challenges
Production and export volumes
THA – WA FLC Grain Logistics Challenges
Rail system limits
• Competition between road and rail has taken many
forms over last 15 years
• Latest incarnation has CBH rail-based system
competing with farm-to-port road systems
• Rail handles volume well but has difficulty with
distance disadvantage, export peaks, summer heat,
variable commercial returns
• Competitors to CBH will exploit some of these
THA – WA FLC Grain Logistics Challenges
Grain Express revocation
• Grain Express provides huge and obvious benefits to CBH
members and customers
• Grain owners can now opt out of Grain Express and
manage their own transport ie avoid using CBH trains
and trucks (except at 27 major bins)
• Some large grain traders will use this choice to establish
export channels outside the CBH bulk terminal network
• International traders will absorb local losses in so doing,
as part of a global strategy
• 2013/14 and 2014/15 will be a test of this
THA – WA FLC Grain Logistics Challenges
Bunge Supply chain - Bunbury
• International trader Bunge is investing in a
throughput terminal at Bunbury Port
• Ambitious 1 mtpa target volume from southern
• Grain direct from farm by truck and also from CBH
bins and private storage
• Will affect rail volumes on Avon-Albany line
• Will also bring extra truck traffic onto some roads
and highways
THA – WA FLC Grain Logistics Challenges
THA – WA FLC Grain Logistics Challenges
Chinese supply chain Albany
• A Chinese agricultural company is buying farms in
the Albany zone in partnership with Vicstock
• Seeking a new export capability via a woodchip
conveyor and shed near CBH at Albany Port
• Road transport will be used – most likely to be
sourced from non-rail served eastern area
• Possible impacts on Chester Pass Road and port
THA – WA FLC Grain Logistics Challenges
• Scale of success of competitors for CBH cannot be
predicted, but they will have some impact in SW
• Rail volumes have improved under CBH/WATCO deal, but
have probably peaked
• Road use by new chains creates less predictability
• Some potential for this to be managed through
agreements between roads authorities and major
exporters – as with CBH
• Government agencies will need dialogue and information
to minimise future adverse impacts of competition on
the transport network
THA – WA FLC Grain Logistics Challenges

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