Southern Australian grain does not often look like fair value to lot feeders in far away Queensland and northern NSW, but it probably will when the east coast’s inland rail line is finally built.
At the same time, the price and logistics fundamentals for refrigerated beef and horticultural exports from Queensland may be more appealing going via airports in southern Australia, or even Perth, say those in the container freight industry.
The promised north-south link won’t just slash transport costs for farm commodities going long distances to domestic and export markets – imports will also find new routes to regional and metropolitan consumers.
Expect to see Bunnings containers landed in Melbourne with hardware products destined for stores in Toowoomba, Brisbane or the Gold Coast, via rail.
Short-haul trucks, not thundering big interstate road rigs, will make the final local delivery from intermodal rail-road freight hubs.
“Getting containerised road freight between Brisbane and Narrabri (in northern NSW) would be at least twice the cost you’d expect to pay on rail if we have a standard gauge inland link,” said Toowoomba-based AFT Foods chief executive officer, Peter Wilson.
The future is still a long way off, but the logistics opportunities likely to emerge with the inland rail corridor will peel your eyeballs back
- Peter Wilson, AGT Foods
Apart from rail’s energy efficiency, basic factors such as freight economies of scale, fewer labour requirements, less transport infrastructure wear and reduced geographic isolation for regional industries promised to make a rail link west of the Great Dividing Range a logistics game changer.
“The future is still a long way off, but the logistics opportunities likely to emerge with the inland rail corridor will peel your eyeballs back,” Mr Wilson said.
“We can expect almost every logistics and pricing margin rule we know today to be turned on its head if we have a sound and big capacity rail link to work with.”
For example, he said South Australian croppers may discover rewarding new grain markets, despite not being directly serviced by the inland route from Brisbane to Melbourne via Queensland’s agriculturally-rich Darling Downs and NSW’s mixed farming and irrigated cropping regions.
Rather than selling to SA or Victorian buyers, boxed grain may move east via Broken Hill and the transcontinental line, joining the north-south link to supply NSW and Queensland feedlots.
“Grain growing makes a lot of sense in SA, but the state doesn’t generally have a big feed user market, so price competition can be pretty ordinary, Mr Wilson said.
AGT specialises in boxed pulse and cereal exports from packing plants at Horsham in western Victoria, Bowmans in SA and Narrabri.
It also part owns SA’s Bomans Rail, a carrier servicing agriculture, mining and other customers via the big Bowmans inland intermodal port north of Adelaide, running trains to Broken Hill, Port Pirie and Port of Adelaide.
“Road freight is undoubtedly a big contributor to the costs which can make Australian agricultural margins so tight – a standardised rail link will mean the difference between profit and loss for many,” Mr Wilson said.
“Shipping line number-crunchers will identify new arbitrage opportunities which, in turn, will become savings for their customers.
“It’s not beyond the realms of possibility to expect inbound shipping containers emptied in Brisbane, going by rail to Toowoomba or Narrabri to be refilled with grain or meat, then going further south to Newcastle or Melbourne to be loaded onto the same ship.”
“As silly as it sounds, we could see Victorian air freight moving north to go out of Toowoomba or Canberra airports, because Melbourne is getting so busy
- Lisa Harrison, Mainfreight
The inland rail route would promote new farm commodity production and processing options, and sizeable decentralised storage and freight logistics “cross docking stations” established at a considerable cost saving to equivalent metropolitan real estate.
Perishable goods specialist, Lisa Harrison, agreed the potential boom in inland container freight options would service a whole new pattern of export trends.
“As silly as it sounds, we could see Victorian air freight moving north to fly out of Wellcamp (Toowoomba) or Canberra airports, because Melbourne is getting so busy it’s running out of air freight capacity,” she said.
A surge in air freighted meat and seafood exports to Asia was a contributing factor to that squeeze.
Ms Harrison, the NSW perishable products manager with New Zealand-based Mainfreight Air and Ocean, said horticultural exports from Brisbane airport also faced a potential log jam, partly because irradiated produce to Asia had to go via Brisbane to be treated.
As eastern Australia’s capital city air freight challenges grew, logistics planners may rely on the reinvigorated rail network to send goods produced in inland NSW, Victoria or Queensland, west to Adelaide or even Perth to catch flights.
New rail freight options may also foster new Asia-focused horticultural crop or processing industries in areas along the rail corridor.
However, Ms Harrison cautioned interstate horticulture movements may also require streamlining of biosecurity rules which ensure pests or diseases common to certain farming regions did not spread across the country.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
