Australian Grain Transport System Needs Investment to Stay Competitive

A report comparing the Australian and Canadian grain transport supply chains titled, “The Puck Stops Here! – Canada Challenges Australia’s Grain Supply Chains”, issued by the Australian Export Grains Innovation Center (AEGIC), found that Australia’s grain transport system is in need of investment and improvement if it is to remain competitive.

In Canada, larger volumes of grain remain stored on-farm for longer periods of time – being shipped to port on an as-needed basis when a sale has been arranged. In comparison, in Australia, most grain is shipped directly to the warehouse immediately after harvest. Distance plays a role also – in Canada grain is usually transported longer distances - often 1,200 to 1,300 kilometers, making the system more efficient. Whereas, in Australia, grain is usually shipped less than 500 kilometers to port.

Over the past 15 years, Canada’s grain transport system has seen significant investment resulting in the doubling of high-throughput receival sites on high capacity, high efficiency rail lines. These improvements have cut the time needed to deliver grain to port by one third, according to AEGIC chief executive, David Fienberg. And although it’s true that Canada’s supply chain operates at a higher cost than Australia’s, because of higher yields and the fact that 53% of the country’s grain ships out of Vancouver creating an economy of scale, Canada can deliver grain shipments to Asia at approximately the same cost as Australia.

The AEGIC report focused on two areas that Australia needed to address – the need for a national agreement on the most efficient rail freight system as opposed to a state-by-state arrangement and the need for greater funding of worthy projects through public private partnerships.