Logistics News

Mixed picture for shipping in ACCC grain port report

Indications that land-based transport busy in drought-hit year


A quiet export period has led to a fall in complaints to the Australian Competition and Consumer Commission (ACCC) from farmers and exporters, its Bulk grain ports monitoring report 2019-20 finds.

Port users raised few concerns about port terminal access, due to low Australian grain production as a result of extended drought conditions, the competition watchdog says.

The report identifies that 2019-20 was the lowest year of grain production and bulk grain exports since the ACCC began collecting grains data in 2011.

In a mixed message on coastal shipping, the report notes land transport has been busy dealing with demand to shift grain to Queensland and NSW.

“Despite a reduction in demand of 9% in Queensland and 2% in NSW, very low production in those states again meant that local supply could not meet local demand,” the report states.

“Accordingly, the volume of bulk grain exports from NSW and Queensland were insignificant, and coastal shipments and overland grain movements were again required to satisfy domestic demand.

“Coastal shipments of grain from WA, SA and Victoria to Queensland and NSW totalled 2.3 million tonnes (34% below the 2018–19 shipping year total).

“This reduction may reflect a material increase in inland movements, in addition to reduction in domestic consumption in NSW and Queensland.

“Stakeholders noted a significant increase in road freight moving north from Victoria, and road and rail freight moving east from SA.”

However, espite the ACCC noting that it does not receive data for overland movements of grain, and there is limited data available on this within the market, the ACCC’s research does indicate some positives for maritime grain movement.

“Most stakeholders consider that the market solved domestic supply and demand imbalances well,” the report adds.

“Suitable infrastructure and transport options (via road, rail and coastal shipping) were available, and grain prices covered attendant transport and handling costs.

“Stakeholders noted an increase in overland grain transport, and that various market participants were active in these supply chains.

“While stakeholders again acknowledged the challenges associated with receiving coastal shipments at facilities designed for exporting grain, it was widely considered that the industry had learned from previous seasons and managed this task more efficiently in the 2019-20 season.”

Read about the ACCC’s latest container stevedoring report, here

Beyond that, it is highlighted that, while the three major port terminal service providers – CBH, Viterra and GrainCorp – remained the dominant providers of port terminal services in 2019-20, and each has a major affiliated wheat export operation, other independent exporters raised few concerns about access to port terminal services due to low production and export volumes.

“We note that in most regions there is excess port capacity in low export and drought years, and with new facilities commissioned in some ports, we will not be revisiting any exemption decisions at this stage,” ACCC deputy chair Mick Keogh says.

“However, improved conditions during 2020 have significantly increased production across most major grain growing regions, and last season’s harvest is one of the biggest on record.

“Exporters are already reporting that port terminal services in most regions are fully booked throughout the peak exporting period this year, and are likely operating at capacity. We therefore expect the 2020-21 shipping season will provide a more significant test of whether port terminal service providers meet the expectations of exporters.”

The report also reiterates the ACCC’s support for a range of amendments to the Wheat Port Access Code that would improve the ability of exporters to have fair and transparent access to port terminal services.

“We welcome the Australian Government’s support to implement several recommendations made in the Department of Agriculture’s review of the code as these changes will benefit industry, including growers as they seek a fair price for their grain,” Keogh says.

“But there is still more work to be done, including expanding the code’s coverage from wheat to all bulk export grains at port.”

The report shows that the proportion of non-wheat grain being shipped has been increasing since the 2011-12 season.

While wheat still makes up the majority of grain exports overall, at several ports wheat is no longer the major export grain by tonnage, and it is important that exporters of other grains obtain equitable access to port terminal services.

The full report can be found here.


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