IN SPITE of the high profile problems in moving grain by train this year, GrainCorp managing director Mark Palmquist believes the rail freight situation is better than it was a year ago.
“We’ve made pretty good progress in dealing with different State governments on rail projects, which makes sense as they start to see some of the joint projects we have been involved in and the savings they bring.”
“We anticipate we will get further participation in regards to rail projects with the NSW and Victorian governments, while in Queensland we are still in discussions, but we are optimistic we’ll get something off the ground.”
Mr Palmquist said rail initiatives, such as joint funding of branch line upgrades had demonstrated the value of investment in rail infrastructure.
“You can see how investment, such as we have made through our Project Regeneration, improves the supply chain.
“Some of the projects are delivering $5 a tonne in efficiency savings.”
Mr Palmquist said the recent Victorian train drivers strike, a result of a dispute with freight provider Pacific National, highlighted the preference for rail.
“We’ve incurred extra costs in having to shift some of the grain movement to road.”
“It is manageable and controllable but rail is the preference.”
He said GrainCorp would continue to monitor its freight agreements, which include take or pay arrangements with a number of businesses, including PN.
“Some deals will expire in 2018, but the vast majority will come up in 2019.”
However, he said it was the infrastructure that remained GrainCorp’s primary focus.
“You will always have disagreements between labour and business, but the big issue is getting the network right as rail is still the most efficient means of moving grain.”
“We feel if we want to get our cost per unit of grain down, we need to move grain on an efficient rail network.”