Agribusiness says low fuel prices and rail access deal allows move
CBH will give its farmers a logistics cost boost following revision of its October estimate.
The agribusiness notes its transport costs are down and it has more certainty since a new interim deal was signed with Western Australian track owner Brookfield Rail.
Contributing factors include falling fuel prices, the certainty of a 12 month rail agreement and less use of surge transport during harvest.
“This outcome is a credit to the Freight Fund team and the zone, area and terminal managers for executing the harvest receivals to achieve this result,” CBH Group general manager operations David Capper says.
At CBH road sites, freight rates are down 3.25 per cent from the October estimate and rail site freight rates have been reduced by 2.25 per cent.
Road-to-rail sites have fallen 2.75 percent.
“The Esperance Terminal Area, which includes Chadwick, Brazier St and Shark Lake, will have a reduction of $0.41 cents a tonne,” Capper says.
“This is equates to a saving of around 27 per cent across those sites and mainly due to strong harvest shipping resulting in more grain being delivered directly to the terminal.
“The Geraldton Terminal including West End and Moonyoonooka will receive a 6 percent reduction in their rates.
“In our October estimate we forecast a small decrease in many road freight rates, which when combined with the 3.25 percent reduction just announced, results in a total rate reduction of 4 percent on last year’s road freight rates.
“This reduction is something that CBH and our road haulage partners have worked hard on.
“We will continue to look for innovative ways to improve the efficiency of our logistics chain and continue to pass savings on to growers.
“These types of benefits are possible because of our co-operative business model and the ability to return the value we create to growers.
“In an industry where the margins are tight, every part of the supply chain must continually drive for efficiency, so we will keep working at reducing costs and returning that value to the growers of WA when possible.”