Viterra will transition to road transport for the movement of all grain on the Eyre Peninsula in FY20, citing high costs and the poor condition of rail infrastructure for the move.
Viterra, which operates a storage and handling network serving in South Australia’s key growing regions, said on Tuesday it had made an effort to resolve its rail issues, working with operator Genesee & Wyoming Australia and the state government in an attempt to bring costs down.
However the company’s commercial and logistics manager James Murray said the condition of rail infrastructure, the restrictions it placed on operations, and ultimately the cost had all contributed to rail no longer being efficient or cost effective to move grain.
“We have a long term commitment to providing grain storage and handling services to Eyre Peninsula growers and maintaining Port Lincoln as a key export terminal for South Australian grain,” Murray said.
“Since 2010, Viterra has spent $128 million on maintaining and improving our supply chain and services to growers and exporters on Eyre Peninsula. As a customer of the rail service, Viterra spent a significant amount of time working with GWA to assess a number of different options to continue using the rail network.”
The current rail agreement between Viterra and GWA concludes on May 31. From June 1, the company will shift to road transport only on the Eyre Peninsula.
“This is a significant decision for the business, one we have very carefully assessed and considered,” Murray said.
“We have made this decision based on the current situation and the information we have available. If the situation changes with rail on the Eyre Peninsula and it becomes efficient and cost effective compared to road freight, we will certainly reconsider our options.”