Western Australian rail freight rates are set to rise following the recent release of substantially reduced harvest estimates for WA.

Latest freight rates, released by AWB this week, show an average increase of approximately $0.65 per tonne on previously quoted figures and are at risk of further increase if projected deliveries to CBH rail sites fall below current estimates.

"AWB has managed to keep rates capped to this point due to its commercial insurance and carryover initiatives," said Lisa Wilson, AWB Manager WA.

"Unfortunately, the latest reduction in expected harvest tonnages has exceeded the financial benefit of those strategies and this is putting upward pressure on rail rates across the state," said Ms Wilson.

AWB flagged potential increases in 2002/03 rail freight rates at the beginning of harvest, but had been successful until now in maintaining current rates at or below last year’s levels.

In Western Australia, AWB and Grain Pool of WA are tied to an industry rail freight agreement, which includes a minimum $29 million ‘flagfall’ charge.  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.

"Unfortunately, significant frost damage in the southern zones has led to lower than expected yields in areas that were previously thought to hold good crops," said Ms Wilson.

"The result of this is fewer 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," said Ms Wilson.

AWB will continue to monitor harvest receivals closely and will keep growers advised of changes to rates as they occur.  Up-to-date rates are posted daily on the AWB website, www.awb.com.au.