Australia's largest grain organization, The CBH Group, has released its freight rate estimates for the 2012-13 harvest, with rail users starting to reap the benefits of CBH's investment in rail.
CBH General Manager Operations Colin Tutt said the difference between road and rail transport costs is widening, with rail rates seeing an average reduction of around seven percent while road rates rise by, on average, five to eight percent.
"We have been conservative in setting freight rates this year given it's our first year in rail and we need to ensure all transition costs are covered but a reduction in rail rates by an average of seven percent is certainly still a significant saving for growers," he said.
"CBH is now responsible for purchasing fuel for the locomotives, we cover the track access costs and we own the rolling stock. We've taken out the middle man and the profit margins and this is being reflected as improved rail rates.
Our new locomotives and wagons are more efficient than those used to move grain previously which means more tonnes are being carted in each train trip to port. Again this allows us to pass that benefit to growers through better freight rates."
CBH's investment in rail has proved timely with road transport becoming more expensive.
"Unfortunately there will be an increase in road rates on average of five to eight percent in 2012-13," Mr Tutt said.
"There are a number of factors that have made road more expensive including road contractor rates increasing; the CPI for road transport increasing at a greater rate than under the CBH Group's new rail contract; and the diesel fuel rebate being reduced this year."
The freight rates released today are estimates only and may be reviewed during harvest to reflect any significant changes to expected delivery patterns and fuel prices. The finalised freight rates will be released in February 2013.
Growers can find the estimated freight rate for their site on the CBH Group website at www.cbh.com.au or on LoadNet®.