CBH Group flags freight rate rise

CBH Group flags freight rate rise

Grain
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CBH Group flags freight rate rise

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The CBH Group has this morning announced freight rates estimates for the 2021/22 harvest.

Freight rates are increasing significantly for both road and rail this year, reflecting underlying cost rises.

Rises are largely due to increases in the cost of fuel, driver wages due to driver shortages and CPI increases, influenced by the impacts of the COVID-19 environment, interstate and international travel restrictions, and a strong Western Australian economy.

In response to these changing conditions, CBH has renegotiated key agreements for rail and road transport contracts with our road partners, which provide more certainty, security and supply chain sustainability, enabling us to deliver grain to port when it is needed.

This year, the costs associated with transporting grain to port are expected to increase at all sites compared to the 2020/21 season.

Estimated freight rates for the 2021/22 harvest are set to increase on average 18 per cent, or a $2.41 per tonne, across the network.

Some zones and sites will see a higher increase than others.

This is due to road rates coming off a low base.

These contracts were negotiated in a different market environment and therefore needed to be adjusted to meet the current competitive conditions.

CBH acknowledges this is a big increase for growers, however the co-operative is working to provide a more sustainable supply chain for the longer term to ensure we can move grain to port when we need it to meet market demand.

These rates are an estimate to assist growers with decision making at harvest.

Freight rates will be finalised post-harvest once the actual size of the crop is known.

The story CBH Group flags freight rate rise first appeared on Farm Weekly.

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