| ||Low grain volumes force rise in WA rail rates|| ||
Western Australian rail freight rates are set to rise following the significantly reduced tonnage being transported on rail this season.
Latest freight rate estimates, released by AWB this week, show an average increase of approximately $0.92 per tonne on previously quoted figures.
AWB WA manager Lisa Wilson said while AWB had managed to limit the increase with commercial insurance and carryover initiatives, AWB had previously flagged potential increases in 2002/03 rail freight rates at the beginning of the past harvest.
"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," said Ms Wilson.
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.
"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," Ms Wilson said.
"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.
The latest rate update is posted on AWB's web-site www.awb.com.au.