Grain group CBH will take advantage of economies of scale to achieve an estimated 4% reduction in freight rates over the upcoming FY17 harvest.
The company’s general manager of operations David Capper said the estimated reduction was the result of larger than average harvests bringing the cost per tonne down.
“We’ve had a number of good harvests and are expecting another this season,” Capper said.
“This has a positive impact on our fixed rail costs which are based on a five year average.
“The more tonnes the freight fund handles the more cost effective it is per tonne. We’re pleased to be able to forecast a reflection of this in freight rates for the upcoming season.”
CBH Group is still in talks with WA network operator Brookfield Rail for an interim rail access agreement, with the current interim deal set to expire on December 31, and arbitration continuomg towards long-term access arrangements.
Capper said that while negotiations are progressing, grower freight rates will be contingent on the outcome.
“We are continuing to negotiate a fair price for rail access to help our growers be competitive in the global market,” he said.
“We are hopeful of a positive outcome, however we will finalise freight rates early in 2017 when we have a clearer picture of the environment, including Brookfield Rail’s access fees.”
CBH says it has also worked to secure cost-effective road transport options, which has been aided by a slight reduction in fuel prices since the previous season’s rates were set in February.