Grain Logistics Taskforce Report - Department of Transport

www.transport.vic.gov.auGrain LogisticsTaskforce Report

This publication is copyright. No part may be reproducedby any process except in accordance with the provisionsof the Copyright Act 1968.© State of Victoria 2011Authorised by the Victorian Government, 121 Exhibition St,Melbourne Victoria 3000.If you would like to receive this publication in an accessibleformat, such as large print or audio please telephone PublicAffairs Branch, Department of Transport on (03) 9655 6000.2 Grain Logistics Taskforce Report

ContentsIntroduction 4Executive Summary 51.0 Grain Logistics Task Force – Recommendations 61.1 Improved train productivity 61.2 Improved truck productivity 61.3 Ship surveys 71.4 Other 72.0 Background 83.0 Industry structure 84.0 Grain supply chain 104.1 Grain storage 104.2 Grain transport 104.3 Containerised grain 135.0 Supply chain analysis 145.1 On-farm storage 145.2 Grain co-operatives 145.3 Off-farm transport 155.4 Local roads 155.5 Truck capacity 165.6 Grain Harvest Management Scheme 165.7 Mass limit difference between states 175.8 Performance Based Standards 176.0 Silo to port 196.1 Grain train availability 196.2 Rail network capacity 196.3 Rail network improvements 206.4 Rail gauge standardisation 206.5 Track standards 216.6 Train and truck standards 217.0 Port issues 227.1 Port capacity 227.2 Ship surveys 238.0 Conclusion 25Consultations 25Appendix A 26Grain Logistics Taskforce Report 3

IntroductionAfter many years of drought,the 2010-11 Victorian grainharvest was a record atjust 7.1 million tonnes.This placed signifi cantpressure on the grain supplychain, particularly for exports,with around 30% of the2010-11 harvest still instorage in October 2011.The 2011-12 grain harvestis expected to be 6.2 milliontonnes which will imposefurther pressure on Victoria’sgrain transport system.As a result of the pressure on thegrain supply chain, the Governmentestablished a Grain LogisticsTaskforce in August 2011 torecommend improvements to theeffi ciency and capacity of Victoria’sgrain storage and handling system.The Taskforce comprised:• Simon McNair,CEO of Australian Bulk Alliance• Peter Tuohey, Vice President,Victorian Farmers Federation• Jim Cooper, CEO Port of Portland• Rob Noyes,Commercial Manager,Bulk Rail, Pacifi c National• Nigel Hart,Group General Manager,Supply and Logistics,GrainCorp• Phil Lovel, CEO VictorianTransport AssociationThe Taskforce appreciated additionalinput from Peter Marshall, GrainCorp,Stephen Sheridan, Victorian FarmersFederation, Mark Watson, Pacifi cNational, and Neil Chambers,Victorian Transport Association,during the Taskforce meetings.The Taskforce was requested to:• obtain data on past andforecast grain fl ows• assess the effect of thederegulated grain marketingsystem on grain storage andtransport, including the impact onthe grain supply chain caused bychanges in grain containerisation• analyse the domestic andexport grain supply chain andidentify necessary improvementsto handle the future grain taskincluding to the Victorian railand road networks• make recommendations toGovernment on how to improvethe grain supply chain.This report contains the Taskforce’srecommendations on how bestto cater for the movement ofgrain in Victoria. The Taskforceacknowledged that variousinitiatives have been pursued on acommercial basis to improve grainsupply chain effi ciencies. This hasincluded continued investments insilo effi ciencies, grain train capacityand supply chain coordinationimprovements. While these initiativeswill assist in meeting the supply chaindemands for the 2011/12 harvestseason, the Taskforce saw the needto present the Victorian Governmentwith its views on matters that wouldhave maximum effect in addressingfuture grain supply chain effi ciencies.Consequently, this Report containsboth short and medium termrecommendations targeted atGovernment and industry.The Taskforce was supportedby a Secretariat comprisingDavid Hill, Executive Offi cer, andAnthony Shaw from the Freight,Logistics and Marine Division of theVictorian Department of Transport.The Secretariat undertook extensiveconsultations across the grainsupply chain to ensure that therewas a comprehensive overviewof relevant issues.A list of consultations is providedat the end of the report.4 Grain Logistics Taskforce Report

Executive SummaryThe grain supply chain has changedsignifi cantly in recent years. Abolitionof the single desk for Australianwheat exports in 2008 has resulted inthere now being 27 accredited wheatexporters with 18 of these activelyinvolved in the export wheat market.Deregulation of the wheat exportmarket has resulted in very differentarrangements between graingrowers, grain handlers and graintransport companies than existedprior to 2008 when the grain supplychain was much simpler. Thesechanges have coincided with largegrain harvests after many years ofdrought which has led to the needfor a better coordinated grainsupply chain.The grain industry has recognisedthese changes and, to a large extent,developed ways to manage them inorder to improve the effi ciency of thegrain supply chain. For example, theindustry has improved silo effi ciencyby focusing on larger, more effi cientsites and is investing in more graintrain capacity in order to increase theamount of grain transported by rail.The industry is also improving thecoordination of grain deliveriesby truck into ports.However, the Taskforce has identifi edthat some major issues remain inensuring the grain supply chaincontinues to become more effi cientand can handle bigger harvestswith minimal delay to export grainshipments. Improving train andtruck productivity and reducing theincidence of ships failing survey arecritical to the grain supply chain inensuring the grain harvest is movedat least cost and is competitive withoverseas grain producers.Train cycle time depends on networkinvestment by track managers andinvestment by grain companiesin silos which can be loaded andunloaded quickly to reduce trainturnaround times. The generalindustry view is that, providedthe rail network is maintained ingood condition to enable reliablecycle times which maximise trainproductivity, the industry will investin silo capacity which facilitatesimproved train utilisation. An exampleof this approach is the joint industry/Government, upgrading of theDimboola to Rainbow railway andsilo capability at Rainbow. Thiswas also the approach used in the2007 Rail Freight Network Reviewwhere grain rail lines were upgradedby Government provided industryagreed to upgrade silo capabilityon the lines.Truck productivity is also an issue during grain harvestswith the industry concerned that truck size, combinedwith truck queues at silos and ports, is affectingthe ability to transport grain to silos or ports quicklyand effi ciently. These problems could potentiallybe overcome with increased use of more effi cienttruck combinations under the Performance BasedStandards scheme and more widespread approval ofroute and infrastructure access for these vehicles byroad managers. Investment in silo effi ciency is alsorequired to reduce truck turnaround times. Reducedtruck turnaround times would enable fewer trucks to berequired for the grain transport task with less congestionat silos and ports and fewer problems arising fromfatigue management.The issue of grain ships failing survey has a majorimpact on the grain supply chain. Every time a grainship fails survey grain cannot be loaded onto the shipor loaded into the port silo because the silo is full. TheFederal Government’s Export Certifi cation Process,if approved, will enable ship surveys affecting graintransport to be undertaken at anchor rather than atberth which will greatly reduce delays to grainshipments. Ships being loaded will already havepassed survey so will not delay grain loading at berth.The grain industry can also reduce the incidenceof ships failing survey by improving ship charteringprocesses so that ships are less likely to fail surveywhen they are in Australian waters.Finally, the Taskforce recognised the value in maintainingdialogue and action between industry participants andgovernment to continue to analyse and address grainsupply chain effi ciency issues. In this regard, it has beenrecommended that the Grain Logistics Taskforce ismaintained as a forum to review harvest managementplans and consider continuous improvements in grainsupply chain effi ciencies in Victoria.The recommendations in this report addressthese issues.Grain Logistics Taskforce Report 5

Grain Logistics Taskforce –RecommendationsImproved train productivity1. Consistent with Recommendation 12 of the 2007Rail Freight Network Review, The State Governmentensure there is an appropriate level of investment inthe rail freight network to provide suffi cient rail freightnetwork capability, including track speeds, whichsupports effi cient grain train cycle times from silo toport and return.2. The Victorian Department of Transport work with trackmanagers, rail operators and grain companies to:a) review and assess the merits of funding the railinfrastructure issues referred to in Appendix A.b) assess opportunities to standardise the railfreight network where economic circumstancesjustify gauge conversion.c) assess the benefi ts and costs of increasingaxle loads on the Victorian regional rail networkto at least 21 tonnes to improve rail freighteffi ciency and reduce transport costs whilemaintaining grain train cycle times from siloto port and return.d) work with the Port of Melbourne Corporationto improve train turnaround times in the portprecinct as well as train stabling facilities.Improved truckproductivity3. Transport companies increasetheir use of the PerformanceBased Standards scheme toimprove the effi ciency of roadtransport of grain and roadmanagers approve these vehicleswhere the route is capable ofaccommodating them.4. The Victorian, New SouthWales and South AustralianGovernments identify importantdifferences in truck weightregulations and where possibleharmonise, similar to theprocess used in the GreenTriangle region of Victoria andSouth Australia in order toimprove road freight effi ciency.5. VicRoads and the grain industrygive further consideration toimplementing a Grain HarvestManagement Scheme whichwould assist industry to complywith mass limit regulations in thecartage of grain off farms intoreceival silos.6. Encourage industry to adoptimproved truck scheduling andnotifi cation systems into portsto reduce truck queuing andimprove truck throughput.7. The State Governmentsupport the campaign by localgovernments for continuationof the Federal Government’sRoads to Recovery programfor funding of local roadsbeyond 2014.6 Grain Logistics Taskforce Report

Ship surveys8. The Victorian Government support therecommendations of the Federal ExportCertifi cation Reform process which will enableindustry employed AQIS Authorised Offi cers toundertake inspections of grain ships at anchor.9. The grain industry review and improve its shipchartering processes to reduce the incidence ofships failing survey.Other10. The Grain Logistics Taskforce is maintained as aforum to review harvest management plans andconsider continuous improvements in grain supplychain effi ciencies in Victoria.11. The training and competency assessment criteriafor train and truck drivers be reviewed by relevantagencies to ascertain if they can be streamlined,without affecting safety, to assist in addressing trainand truck driver shortages.Grain Logistics Taskforce Report 7

2.0 BackgroundAustralia generally produces around 22 million tonnesof grain per year with 13 million tonnes exportedto 52 countries 1 for an annual export value of over$5 billion 2 (0.5% of Gross Domestic Product). Domesticgrain consumes the remaining nine million tonnes.Export grains include wheat, rice, barley, maize, oats,sunfl owers, chick peas and cotton seed.Wheat is Australia’s biggest and most important graincrop worth about A$4 billion each year, accounting for14 per cent of the world’s export demand 3 . Averageannual Victorian grain production is around 4.5 milliontonnes of which 70-80% is wheat, barley and canola.These are the focus of this report because of theirimportance to the export grain task and its transportrequirements.In 2009-10 Victoria exported 1.8 million tonnes of grainworth $659 million 4 and about 10% of Australia’s grainexports. Victorian domestic grain consumption isapproximately 2.5 million tonnes per annum and is usedin the dairy, livestock and fl our milling sectors 5 .Victoria’s major grain production has varied over thepast decade from 1.6 million tonnes in 2006-07 to 7.1million tonnes in 2010-11. During that period, the Statesometimes had little exportable grain with most usedfor domestic consumption. The 2011-12 grain harvestis predicted to be 6.2 million tonnes 6 .In Victoria, grain is grown on 5,500 farms with around3,000 grain ‘specialist’ and 2,500 grain producersas part of a mixed farm business 7 . These farmsemploy about 8,800 people. Victoria’s grain farms arepredominantly located in western and northern Victoriawith most being in the Mallee and Wimmera regions.As rainfall patterns change grain growing may expandinto southern Victoria and possibly Gippsland onpreviously pastoral areas. These changes will haveimplications for the grain supply chain because ofavailability of transport options and access to ports.3.0 Industry structureThe grain supply chain was oncea Government monopoly withGovernments owning and controllingrail companies, ports and graincompanies. However, privatisationand deregulation of rail transport,ports and the grain marketing systemsince the 1990s has resulted inAustralia’s grain crop being handled,stored and transported by privatecompanies.Prior to 1 July 2008, Australia’s exportwheat market was controlled bythe Australian Wheat Board (1939 –1999) and its privatised successorAWB Limited (1999 – 2008). Thiswas known as the ‘single desk’.The major element of the ‘singledesk’ was the national pooling ofreturns to wheat growers where theirprice received was the averagefrom sales minus costs incurredby the Board.The ‘single desk’ covered domesticand export sales of wheat until 1989,then only export sales until August2007. From then until its abolition on30 June 2008 it handled only bulkexport wheat sales. The ‘single desk’was abolished for various reasonsarising from the National CompetitionPolicy Review of the Wheat MarketingAct 1989 in 2000; the deregulationof barley; increasing dissatisfactionwith the ‘single desk’, particularly inWestern Australia; and the Inquiryinto Certain Australian Companiesin Relation to the UN Oil-for-FoodProgram 2006. 8Abolition of the ‘single desk’ led to anumber of changes in wheat exportmarketing arrangements. On 1 July2008, Wheat Exports Australia wasestablished under the Wheat ExportMarketing Act 2008 to administer theWheat Exports Accreditation Scheme2008 (WEA). The Scheme providesfor the accreditation of bulk wheatexporters who must be considered‘fi t and proper’ against a wide rangeof probity and performance criteria. 9Deregulation of the export wheatmarket in 2008 has resulted in 27accredited wheat exporters with18 of these companies exportingwheat in 2009-10. 10 Victoria’s mainwheat exporters are GrainCorp,AWB Grainfl ow and AustralianBulk Alliance (ABA).Victorian grain harvest1Wheat Exports Australia, Report for Growers 2009-10, p382About Australia, Department of Foreign Affairs and Trade,About Australia3Department of Foreign Affairs and Trade, About Australia, p2764Victorian Department of Primary Industries,Victoria’s Grain Industry Summer 2011, p15Op cit, p36Victorian Department of Primary Industries, October 2011 CropProduction Estimates7Victorian Department of Primary Industries, Ibid, p28Productivity Commission, The Australian Bulk Wheat ExportIndustry 2010, p459Ibid, p45Million tonnes5432102003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 128 Grain Logistics Taskforce Report

Wheat is Australia’s biggest and most important grain cropworth about A$4 billion each year, accounting for 14 per centof the world’s export demand.Grain Logistics Taskforce Report 9

4.0 Grain supply chainGrain classifi cation, combined with its demand and thevalue of the Australian dollar, determines its use and theamount paid to the farmer. Farmers can sell their grainfor cash, store it on or off farm and sell it later or sell itto a pool to obtain the best price through a managedmarketing arrangement.Grain is assessed for its quality once it is receivedinto storage. It is weighed, quality tested, checked forinsect infestation, separated into a wide range of gradesand segregations and stored in silos or bunkers. Theassessment is undertaken by the company whichis providing the storage and handling service. Grainclassifi cation increases the complexity of the grainsupply chain because the storage facility must be ableto accommodate segregation of grain into differentgrades and ensure that the correct grade is deliveredto the customer.Grain is sold to a marketer who contracts with a bulkhandler which is responsible for its storage and deliveryincluding ensuring the correct quantity, variety andquality of grain is delivered and loaded at port. 114.1 Grain storageGrain can be stored by the grower in either on or offfarmsilos or bunkers for subsequent transport by trainor truck into the export or domestic markets. Grain isdelivered to off-farm storage sites by truck in either thefarmer’s own truck or by the farmer contracting witha haulage company. Once the grain is delivered to astorage site, grain marketers contract to buy the grainfrom the grower. Improved grain transport effi ciencyis resulting in fewer, but larger, off-farm storage sites.Investment in new ‘super-sites’ is part of a trend towardsrationalisation of the bulk grain handling system. Railservices to port terminals are being concentrated onfewer silos to increase rail effi ciencies and economiesof scale. Smaller, limited service storage silos have beenprogressively closed or leased out to third parties forsmaller scale segregations of grain.Export grain can be taken directly to port by a marketerfrom an on-farm storage site or the marketer can arrangefor the grain to be transported to port from an off-farmstorage facility. Victoria has three export grain terminals– Melbourne, owned and operated by ABA and Geelongand Portland, both owned and operated by GrainCorp.All three ports receive grain by rail and road.10Wheat Exports Australia, op cit, p14.2 Grain transportGrain marketers assess theirtransport requirements accordingto the task and will use rail or roaddepending on the availability ofservice, price and where the grain isstored. Rail is generally best suitedfor export grain transport because ofits ability to transport large volumesand load ships reasonably quickly –a 40,000 tonne ship can be loadedby 18 trains compared with 900B-double trucks. Trucks are generallymore suited to transporting smallergrain volumes to disparate locations.Although 90% of the domestic graintask is undertaken by truck, rail isused to transport domestic grain tolarger volume domestic facilitiessuch as Allied Mills domesticgrain facility at Kensington andGrainCorp’s Sunshine silos. Moredomestic grain could potentiallybe railed to the Sunshine silos ifthey had standard gauge access,which is discussed later.Deregulation of the export grainmarket and increased on-farmstorage has seen an increase inthe use of trucks for export grain toaround 50% of the Victorian exportgrain task as trucks are used tosupplement rail capacity at peaktimes or transport grain directfrom farm to port. Trucks are alsoused to transport export grain fromsilos close to ports (eg under 200kilometres), silos not rail served or forsmall, specialised grain shipments.The diagram (right) illustrates thegeneralised grain supply chain:Grain is also transported fromsouthern NSW and south-east SouthAustralia to Victorian ports by trainand truck which adds to the pressureon the Victorian grain supply chain.10 Grain Logistics Taskforce Report

Generalised grain supply chainMarketerRoadDomesticAQIS and marineship surveysFarmOn-farmstorageRoadRail/RoadRoadPackerRail/roadPortShip(Bulk/container)Off-farmstorageBulk (rail/road)CustomerRail/RoadDomesticGrain Logistics Taskforce Report 11

Grain exportsFiscal year TEU Mass tonnesWheat Barley Total Wheat Barley Total2006/07 10,517 7,023 17,540 245,353 151,680 397,0332007/08 18,817 18,150 37,021 457,483 397,069 854,5522008/09 20,389 4,379 24,768 484,007 95,383 579,3902009/10 35,128 8,760 43,888 840,570 183,022 1,023,5922010/11 40,785 11,783 52,568 958,973 246,236 1,205,209Source: Port of Melbourne Corporation 201112 Grain Logistics Taskforce Report

4.3 Containerised grainContainerised grain exports haveincreased substantially in the pastdecade despite its higher cost thanbulk grain transport. This has beenfor a variety of reasons includingdemand for small grain shipments,specialised shipments, reducedavailability of bulk ships (there isincreasing competition for bulkships from the mining industry),availability of bulk unloading facilitiesat the receival port and conveniencefor end-users of bulk storage andtransport capacity.Nationally, non-bulk grain exportshave increased more than 420%since 2000-01 and are consistentlyin excess of two million tonnes perannum since de-regulation of nonbulkexports (bags and containers)in August 2007. In 2000-01 nonbulkgrain exports were only 4% oftotal grain exports compared with17% of grain exports in 2009-10. 12Containerised grain as a proportionof export grain varies by State. It isabout 30% of Queensland’s grainexports, 20% of New South Wales’and only 6-7% of South Australianand Western Australian grainexports. 13 This refl ects the higherproportion of grain exported fromSouth Australia and Western Australia(90% and 70% respectively) thanfrom the eastern States and is alsoinfl uenced by the grain marketingprocess – non-bulk wheat does notrequire accreditation.11South Australian House of Assembly,Interim Report of the Select Committee onthe Grain Handling Industry 2011, p1912Wheat Exports Australia, p813Productivity Commission, op cit, p56Containerised grain exportedthrough the Port of Melbourne hasincreased by 200% in the past fi veyears and now represents around30% of grain exports as shown inthe table (left).Grain is containerised at packingfacilities in Geelong, Dooen,Horsham, Merbein, Tocumwal(NSW), Lara, Laverton, Sunshineand ABA’s grain terminal at the Portof Melbourne. An important pointto note with regard to containerisedgrain is that the AustralianQuarantine and Inspection Serviceadvised that grain does not haveto be transported in ‘food grade’containers. Any container may beused to transport grain providedit is not contaminated by residue.At Dooen and Horsham,containerised grain is either takento the Horsham intermodal terminal(80% of the terminal’s business)and railed to the Port of Melbournefor export or trucked direct from thepacker to the port. At Merbein andTocumwal the grain is containerisedat the respective intermodal freightterminals for railing to the Port ofMelbourne for export. At Geelongand Sunshine, grain is brought byrail or road to GrainCorp’s terminalsfor containerisation and truckedto port. Similarly, at the Port ofMelbourne grain is brought byrail or road for export in bulk orcontainerisation at the port. Grainpacking facilities in Laverton arepresently road based, due to theirlocation, with grain delivered by truckdirect from farm or silo then truckedto the Port of Melbourne.Approximately 22% of containerised grain (around11,000 teu per annum) is railed to the Port of Melbourne.Containerised grain railed from terminals at Horsham,Merbein and Tocumwal is assisted by the Government’sRail Freight Support Package (RFSP) which is dueto expire at the end of June 2012. If the RFSP isdiscontinued and not replaced with a similar schemeit is highly likely that there will be a signifi cant loss ofcontainerised export grain to road transport.The ability of rail to transport containerised grainis also affected by capacity constraints at the Portof Melbourne. The Patrick terminal, which receivescontainerised grain railed from Merbein and Tocumwal,is at capacity with consequent delays to train operationsand terminal throughput.As demand for containerised grain increases,containerised grain and other agricultural exports at thePort of Melbourne would benefi t from increased capacityat the port to handle containers by rail. This could beachieved by:• increasing shared use of the nearby WestgatePorts terminal• re-opening and expansion of the DP World WestSwanson Dock rail terminal with the additionof two more dual gauge tracks• providing a direct rail connection between thePatrick and DP World rail container terminalsWithout such improvements, on-port rail operationsat the Port of Melbourne will remain ineffi cient andadditional demand via the Dynon terminal will incurthe longer slower transfers across Footscray Roadby road including possible delays due to truck queuingat terminal access points.Grain Logistics Taskforce Report 13

5.0 Supply chain analysisThere are a wide range of issues affecting graintransport. These range from harvester capacity,on and off farm storage, grain testing procedures,availability of trains and trucks, capacity of rail androad networks and ship inspections. The changes tothe grain industry through privatisation and abolitionof the ‘single desk’ have required major adjustmentswhich the industry is addressing.There are more than 550 off-farm storage sites nationallywith a capacity of 50 million tonnes. On-farm storagecomprises about 16 million tonnes of capacity 14 . InVictoria, there are approximately 150 off-farm grainsilos located in the main production areas with a storagecapacity of around eight million tonnes, about 70%of which is controlled by GrainCorp 15 . On-farm grainstorage is about three million tonnes.14South Australian House of Assembly, Interim Report of theSelect Committee on the Grain Handling Industry 2011, p375.1 On-farm storageFarms are increasingly producinglarger and more consistent yieldsdue to improved grain quality,economies of scale in productionand drought resistant crops andfarming practices.Better farm yields combined withmore effi cient headers, which canharvest 35 tonnes of grain per hourcompared with 8 tonnes per hourtwenty years ago, has added topressure on grain storage capacity.Farmers have an incentive to harvesttheir crops as quickly as possible inorder to reduce the potential impactof any adverse weather conditions.Higher farm yields, combined withincreased grain marketing optionsto farmers and the slow receivalcapability of some off-farm silos,has led to increased on-farmstorage. This enables farmersto take advantage of spot pricingopportunities provided by marketersin either the domestic or exportmarkets – grain can be storedon-farm and sold for a higherprice later on.Grain stored on-farm is transportedby truck for either domestic orexport purposes. If it is exported,the marketer can arrange for it tobe delivered to a silo for transportby rail to port or trucked directfrom farm to port.5.2 Grain co-operativesA recent adjunct to on-farm storageis the development of local grainco-operatives. These are grainstorage facilities developed bylocal farmers to augment grainstorage facilities provided by majorcompanies, but at less cost. Forexample, a co-operative storagefacility at Boort in central Victoria has60,000 tonnes of shared capacity. 16Similar storage facilities have beenbuilt at Werneth, north-west ofGeelong, Berriwillock in north-westVictoria and at Moulamein in southwestNSW.The co-operatives provide farmersmore control over their grain andreduce their storage and handlingcosts. Instead of growers investingin their own on-farm storage, theycan pool their resources and investin a bigger, shared facility at lesscost per grower. These facilities alsoincrease grain growers’ ability tomarket their grain by pooling theirresources – instead of a marketerbuying 20,000 tonnes of grain fromtwenty different growers, they cansource the same amount of grainfrom a co-operative and deal witha single transaction.However, the location of these newfacilities is not conducive to railtransport as they are located whereland is available which may notbe near a railway line. This furthercontributes to use of trucks for graintransport. Local governments shouldwork closely with these co-operativesto ensure they are planned and sitedwith easy access to rail sidings fortransport by rail in bulk or containers.15Victorian Department of Primary Industries, op cit, p216Loddon Times, 16/11/1114 Grain Logistics Taskforce Report

5.3 Off-farm transportTrucks are used to transport grainfrom farms to silos or direct to portfor export depending on marketers’arrangements with growers. Somemarketers prefer to truck grain directto port to by-pass the storage andtransport systems of the larger bulkhandlers. Trucking grain direct toport also avoids queues at silosalthough this can cause queuing atports instead. Lack of coordinationbetween truck loading at farm orsilo and delivery to port can alsolead to truck queues.Truck queues also occur whensilos have slow and ineffi cientloading capability which increasesgrain transport costs becauseof underutilisation of truckstransporting grain. Whether a graintruck’s destination is a silo or port,there is a need for adequate truckparking and rest areas in towns andon major transport routes to ensureconsignors, truck owners and driversdo not breach chain of responsibilityrequirements with regard to drivinghours, rest and fatigue management.Industry has commented that this isparticularly a problem for grain trucksusing the GrainCorp facility at thePort of Geelong. There appears tobe a signifi cant mismatch betweenthe loading of trucks at silos andtheir scheduled time at the port,leading to truck queuing and fatiguemanagement concerns.In recognition of these issues,work is underway by industry tointroduce more effi cient informationvisibility, notifi cation and scheduling(timeslotting) between trucks loadingat silos and delivering to ports.These initiatives should lead to bettercoordination of truck arrivals andtruck management, resulting in moreeffi cient and reliable grain deliveryto port.The truck queuing problem ismanaged at the Port of Portlandthrough provision by GrainCorp of anoff-port truck marshalling area. Truckdrivers can wait there with full restprovisions until they are required atthe port which reduces truck queuesat the port and truck driver fatigue.However, there is no similar truckmarshalling facility near the Portsof Melbourne or Geelong.One potential way to address theissue of truck coordination is for themajor grain marketers to establisha transport committee similar tothat established in South Australiaby Viterra. This industry committeecomprises the South AustralianRoad Transport Association, theDepartment of Transport, Energyand Infrastructure, Owner DriversAssociation of SA, Livestock Ruralcarriers Association of SA andindividual carriers and meets threeto four times per year to providefeedback and initiatives for Viterrato consider on transport relatedissues. It also provides Viterra afurther opportunity to consult withthe industry on its proposed actions.Silo opening hours also affect theeffi ciency of off-farm storage. Themajority of GrainCorp country silosgenerally operate from 8am to 3-4pm which limits the daily amount ofgrain that trucks can deliver to a site.Silo rationalisation and increaseddistance to silos, with no change insilo operating hours, has resulted indecreased truck utilisation becauseof fewer truck trips per day to eachsilo. Grain truck utilisation is furtherreduced through congestion at eithera silo or port. Sometimes grain trucksmiss silo opening hours and have towait overnight, with limited amenitiesfor drivers, until the silo opens the next day. Longer siloopening hours would alleviate this problem, but therehave been problems in fi nding enough labour to enablethis to occur.Grain testing and segregation also affects the grainsupply chain. Grain can be tested at a country siloand accepted, only to be rejected at the port receivalpoint. Grain rejected at the port must be returned to itsoriginating silo or an intermediate location. Increasedconsistency in grain sampling and testing procedures isconsidered to be a critical factor in improving both theeffi ciency of the grain handling system and providingmore consistent prices to growers.5.4 Local roadsThe increase in on-farm storage and greater useof trucks for grain transport has led to a signifi cantdeterioration in the condition of local roads with adverseeffects on road safety and road user amenity. For grainstored off-farm, closure of small, ineffi cient rail siloshas worsened the problem of damage to local roadsby requiring grain to be transported by truck further tobigger rail silos or by road to ports.Maintenance of local roads is the responsibility oflocal governments. However, local governments areconcerned that they do not have suffi cient funds torepair and maintain roads damaged by increasingheavy truck traffi c using more local roads becauseof increased on-farm grain storage. In recognition ofthe funding shortfall regional local governments havein maintaining their roads, in October 2011 the StateGovernment provided funding of $160 million over fouryears to regional local governments for maintenance oflocal roads. 17Concern about local road funding is refl ected in thecampaign by local governments after the NationalLocal Roads and Transport Congress in Mt Gambierin November 2011. Local governments have called formore funding for community roads and bridges andfor continuation of the Federal Government’s Roadsto Recovery program for funding of local roads, whichcomprise more than 80% of the nation’s road network. 1817National Party press release 29/10/1118Stawell Times News, 6/12/11Grain Logistics Taskforce Report 15

The Roads to Recovery program is due to expire atthe end of 2014, but according to the Australian LocalGovernment Association there is a shortfall in local roadfunding of around $1.2 billion annually. 19 The programwas introduced in 2009 in recognition of the fundingconstraints facing local governments with regard toasset maintenance.In recognition of the need for local governments toimprove their asset management practices, the MunicipalAssociation of Victoria (MAV) is working with localgovernments on a strategic asset management programto be completed by February 2012. The program isassisting local governments identify strategic heavyvehicle routes on local roads and upgrades required forthem to be used by such vehicles. The required upgrades,identifi ed as part of overall regional freight strategies, willbe the subject of funding submissions to InfrastructureAustralia (IA). The submissions will be developed bythe MAV in consultation with the Victorian Freight andLogistics Council, the Victorian Department of Transport(DOT) and VicRoads.The MAV also considers that local governments needto enhance the freight component of their regionaltransport strategies in order for those strategies to bemore successful in obtaining Federal funding, includingfor local roads.5.5 Truck capacityThere is signifi cant grain industry support for increasedtruck size and weights, at least during harvest time, inorder to clear harvests more quickly to silos or ports. Roadtransport of grain is presently undertaken by semi-trailerswith a maximum gross vehicle mass of 45.5 tonnes (31.5tonne load) or B-double trucks with a maximum grossvehicle mass of 68 tonnes (44 tonne load).These mass limits contrast with the following higherproductivity freight vehicle (HPFV) types for use duringthe grain harvest:• Super B-doubles: 77.5 tonnes (on designated freightroutes in Victoria)• Super B-doubles (restricted to Port precinct usage):109.0 tonnes• Road Trains (A-doubles): 79.5 tonnes and up to85.5 tonnes• B-Triples: 82.5 tonnes and up to 91.0 tonnes19Australian Local Government Association,The Local Roads Funding Gap 2010, p10The grain industry considers thatuse of higher productivity freightvehicles would improve truckutilisation, reduce truck queuesand reduce supply chain costs byrequiring fewer truck movementsper grain harvest. VicRoads hascompleted a two-year trial of higherproductivity freight vehicles (HPFVs),including increased truck mass inthe Green Triangle region of southwestVictoria and south-east SouthAustralia using nominated arterialroads and connections betweenhighways, timber plantations,processing plants and the Port ofPortland. A roll-out of HPFV accesscriteria on a broader and permanentbasis would greatly assist industryto invest in safer, more productiveheavy vehicle combinations for thetransport of grain.5.6 Grain HarvestManagement SchemeUnder Chain of Responsibility laws,grain growers, transport operators,grain receivers and others in thegrain supply chain have an obligationto ensure that trucks are loadedwithin specifi ed mass limits. InVictoria, a measure adjustment isapplied for enforcement weighing.This is a nationally agreed guidelinewhere vehicles are affordedan adjustment to the detectedweight depending on the methodof weighing (i.e. weighbridge orportable scales) and the categoryof the site where the weighing wasconducted.However, in other States such asSouth Australia and Queensland,sanctioned Grain HarvestManagement Schemes are in placein recognition of the diffi culty inaccurately weighing grain trucks exfarm, due to loading conditions andthe varying moisture content anddensities of grain.In South Australia, during adesignated harvest time, graintrucks operating from the farm gateto a grain receiver are permitted tobe overloaded provided the GrossVehicle Mass (GVM) is no more than5% over the legal mass limit for thevehicle type.16 Grain Logistics Taskforce Report

The increase in on-farmstorage and greater useof trucks for grain transporthas led to a significantdeterioration in thecondition of local roadswith adverse effects onroad safety and roaduser amenity.In Queensland, the Grain HarvestManagement Scheme managed byAgForce Queensland and regulatedby the Queensland Department ofTransport and Main Roads, has beensuccessful in achieving better masscompliance on the road. Vehiclesoperating under the scheme areloaded according to the regulatedmass limit wherever possible, butdo not incur a penality provided theyoperate no more than 7.5% above theregulated gross mass of the vehicle,or 10% above the regulated limiton axle group mass limits. Vehiclesare only allowed two breachesabove regulated mass limits withina year without being removed fromthe Scheme. Vehicles found to be“grossly exceeding” the mass limit(by more than 15%) are removedfrom the Scheme immediately.Further consideration of an approvedGrain Harvest Management Schemein Victoria would assist industryto meet mass limit regulations inthe cartage of grain off farms intoreceival silos.However, sometime ago, VicRoadsheld lengthy discussions withthe VFF and grain receivers in aneffort to establish a Victorian grainscheme. Despite best endeavoursan agreement could not be reachedthat satisfi ed the needs of all parties.VicRoads sought to negotiate ascheme that provided a tolerance forloading uncertainty without creatinga defacto mass limit increase.VicRoads concerns in relation to agrain scheme like the one in operationin Queensland centre around:1. a scheme being inconsistentwith Government policy positionof having more grain transportedby rail;2. the scheme becoming a defactoincrease in mass limits, andtherefore increased road wearwithout off sets;3. the potential for the scheme to seta precedent for other transporttasks (i.e. grape carters and thequarry industry), also giving riseto increased road wear;4. having a large tolerance thatis inconsistent with the penaltystructure associated withoverloading where transportoperators not part of a schemewould be subject to heavypenalties for carrying weightspermissible under a schemewith no penalty.5.7 Mass limit differences between statesOther issues affecting the effi ciency of grain trucktransport are the difference in truck mass limitsbetween States, different procedures and accreditationrequirements for loads and different requirements forthe monitoring of driver activity. There is signifi cantscope for increased harmonisation of these differences.In the Green Triangle region, the Victorian and SouthAustralian Governments have achieved some progressin achieving cross-border regulatory alignment for roadfreight transport.The 2007 Victorian Rail Freight Network Reviewrecognised the need for increased road freight transporteffi ciency. The Review recommended (Recommendation9e) that over-dimensional trucks be allowed to operatewithin an 83 kilometre radius from intermodal terminalswhere road freight is transferred to rail, which includesgrain silos.5.8 Performance Based StandardsPerformance Based Standards (PBS) is a combinationof twenty safety and infrastructure standards that aimsto develop innovative, stable and productive vehicleswhich do not necessarily meet the current prescriptiverequirements, but which can operate safely at highermass. PBS is considered to be a more effective wayof introducing increased truck mass for the grainharvest than the AgForce scheme operating inQueensland, where PBS is also used.In the last three years, Victoria has seen an increase inthe approval of combinations that meet PBS standards.For example, truck and dog trailer combinations areused to transport grain throughout Victoria. Under PBS,these combinations may now operate on Higher MassLimit routes at up to 57.5 tonnes for 7-axle truck anddog trailers and as much as 68.5 tonnes for a 9-axletruck and dog trailer combination. This is a substantialincrease in productivity over previous truck and dogtrailer vehicle mass limits of 50.0 tonnes. This initiativeis one way truck operators can obtain a productivityimprovement in the transport of grain.To further support more innovative truck combinations,the MAV has obtained funding from InfrastructureAustralia, the National Transport Commission, theVictorian Department of Transport, VicRoads and thePort of Melbourne Corporation to have ARRB TransportResearch develop a route assessment tool for trucksoperating under the PBS Standards scheme. Thisweb-based tool will improve the capacity of localgovernments to process route applications on localroads in a timely and consistent manner. The intentionis that the National Heavy Vehicle Regulator will makethe system available to all councils nationally in2012 – 13 after an initial trial in Victoria.Assessment and approval of route applications for PBSvehicles is an integral part of applying PBS.Grain Logistics Taskforce Report 17

Victorian rail networkPassenger or passenger/freight rail (active)Freight rail (active)Freight rail (out of service)Standard gauge railBroad gauge railDual gauge railMajor road050 100kilometres18 Grain Logistics Taskforce Report

6.0 Silo to port6.1 Grain train availabilityGrain transport requirements aredetermined by the grain marketers.Marketers who can afford to contracttheir own train or trains ($2-3 millionfi xed cost per train as well asoperating costs) primarily use railtransport for their own purposes, butcan sell capacity to other marketerswho buy capacity on a booked orspot basis depending on demand.Grain trains in Victoria are primarilyprovided by Pacifi c National (PN)in partnership with GrainCorp andEl Zorro in partnership with AWBGrainfl ow (Cargill). For the 2011/12grain harvest GrainCorp hascontracted with PN for three broadgauge export grain trains,two standard gauge export graintrains and one broad gaugedomestic grain train.Over the same time, El Zorro willbase one broad gauge and twostandard gauge export grain trainsin Victoria. South Australian basedGenesee and Wyoming Australia(GWA), under contract to Viterra,has three standard gauge exportgrain trains primarily for use in SouthAustralia. One of the GWA trains isused to transport grain from silosin western Victoria to Port Adelaide,Geelong or Melbourne in accordancewith customer requirements.In total, for the 2011-12 Victoriangrain harvest, there will be nineexport grain trains (four broad gaugeand fi ve standard gauge) and onedomestic grain train (broad gauge)available for use in Victoria. For anexpected 2011 – 12 Victorian grainharvest of about six million tonnes,of which around 3.5 million tonneswill be exported, PN, El Zorro andGWA’s grain trains could transportaround three million tonnes ofexport grain and 300,000 tonnesof domestic grain.Summary of Victorian grain trains 2011-12Emerald Group, through its imminentpurchase of Australian Bulk Alliance’sgrain assets comprising silos andport capacity, is also negotiating tolease two trains for grain transportfrom southern New South Walesand regional Victoria to the Port ofMelbourne. This will augment othergrain trains operating in Victoria.Grain marketers can also contracttheir own trains to transport grainfrom other companies’ silos.Glencore, for example, in April2011 contracted QR National forthree years in NSW for a bulk trainto transport grain to port from silosaround the State where Glencore haspurchased or stored grain. However,in Victoria the company uses trucksor other companies’ grain trains asrequired because the average graintransport haul in Victoria is abouthalf that of NSW (300 kilometrescompared with 600 kilometres).Grain marketers who do not havetheir own trains often contract withtrucking companies because ofprice, convenience, fl exibility or lackof availability of rail capacity.Government ownership of a limitedamount of grain rollingstock wassuggested by some as a way ofaugmenting contracted grain trainsat times of peak harvest. However,other consultations indicatedthat providing track infrastructurewas maintained to a level whichenabled effi cient grain train cycletimes then the private sector wouldcontract as many grain trainsas required to meet the harvest,assuming rollingstock availability.Operator Export DomesticPacifi c National/GrainCorpEl Zorro/AWB Grainfl owGWA/Viterra3 broad gauge 1 broad gauge2 standard gauge1 broad gauge2 standard gauge1 standard gauge6.2 Rail network capacityOver the past four years, the Victorian and FederalGovernments, as well as the ARTC, have invested$1.2 billion in improving Victoria’s rail freightinfrastructure. This includes the $73 million upgradeof the Geelong to Mildura railway line to improve itsoperational performance for grain and container trainsand $82 million on upgrading and maintaining grainlines in the State’s north-west. There have also beenimprovements in rail access to the ports of Melbourne,Geelong and Portland as well as rail capacityimprovements in the critical rail freight corridor inMelbourne’s inner west which is used by interstateand regional freight trains including grain trains goingto and from the Port of Melbourne.These investments have signifi cantly improved thefreight capability of Victoria’s interstate and regionalrail networks, which has facilitated reduced grain traincycle times. For example, a grain train cycle time of36 hours from silo to port and return will enable thetrain to transport 300,000 tonnes of grain per annum.A train cycle time of 24 hours can increase the train’sproductivity to 500,000 tonnes per annum. However,improved grain train productivity is not just dependenton improved rail infrastructure. It also requiresimprovements to the train loading capability of silosand silo opening hours, which are the responsibilitiesof silo operators.The rail network improvements proposed in Appendix Awill enable 36 hour train cycle times to be achieved morereliably and consistently as well as reduce 48 hour graintrain cycle times to 36 hours for a 25% improvement intrain productivity.V/Line, Victoria’s regional track manager, workswith rail freight customers to address their train pathrequirements and other issues in order to improve trainoperating effi ciency. Generally, V/Line considers thatthere is adequate capacity on the regional rail networkfor existing and potential rail freight fl ows.However, Victoria’s two major grain train operators,Pacifi c National and El Zorro, and their major customers,GrainCorp and AWB Grainfl ow, have expressed concernabout the ability of parts of Victoria’s regional railnetwork to handle the grain task. For example, there areconcerns about the potential for delays to grain trainsbetween Maryborough and Warrenheip, 10 kilometreseast of Ballarat, because there are no crossing loops inthat 75 kilometre section. The concern arises becausethis section of track will be used by up to fi ve grain trainsduring the grain harvest in addition to Merbein containertrains and Maryborough passenger trains.Delays to grain trains cause delays to the entire grainsupply chain through delays to grain clearance atsilos which affects harvest clearing with consequentdelays to grain ships at ports. In turn, this can lead toincreased truck use for grain transport to port to meetshipping schedules. Increased train cycle times dueto infrastructure constraints reduces train productivitywhich increases costs to growers from decreased trainproductivity and increased train operating costs.Grain Logistics Taskforce Report 19

6.3 Rail network improvementsPacifi c National and GrainCorp have provided adetailed submission on rail infrastructure improvements(Appendix A) which would increase capacity of theVictorian regional rail network for all rail freight operators.El Zorro and AWB Grainfl ow share Pacifi c National’s andGrainCorp’s views on Victorian rail network capacity. ElZorro has also commented that there are insuffi cient orineffi cient train stabling and refuelling locations acrossthe network, particularly in Melbourne and its port.El Zorro also commented that a refuelling facility atMaryborough would improve the effi ciency of north-westgrain trains by avoiding delays and costs associatedwith refuelling locomotives in Melbourne or Geelong.In recognition of the locomotive refuelling issue, V/Lineis developing a business case for an open access fuelpoint at Maryborough. The Department of Transport isalso working with V/Line to consider the business caseto automate North Geelong C Signal Box which wouldenable more reliable grain train operation into the Portof Geelong.Industry has also commented that improvedcommunication is required between track managersto increase the reliability of grain trains operating overtracks managed by different companies. For example,on approach to the Geelong grain loop the ARTCapproves train paths, but does not coordinate withV/Line which can then cause delays gaining accessto the grain loop.In an excellent example of grain industry collaboration,GrainCorp and the Victorian Department of Transportdeveloped an agreement to reopen the Dimboola toRainbow railway line for the transport of an average120,000 tonnes of grain per year. GrainCorp agreedto contribute to the cost of the line’s upgrade, inconjunction with the Department, and also invest inmore effi cient silo capacity and loading at Rainbow.The grain supply chain improvements to be fundedunder the agreement will provide rapid truck turnaroundtime at the Rainbow silo, with no truck queues, and fasttrain loading. This will reduce the amount of grain trucktransport in the region by enabling grain trains to beloaded quickly and effi ciently to transport export grainto port.Reopening the rail line fromShepparton to Dookie was alsosupported by industry to enable the120,000 tonnes of grain on the lineto be transported by train rather thantruck with reduced road damageand improved road safety.6.4 Rail gaugestandardisationIndustry consultations indicatedstrong support for standardisingVictoria’s regional rail freightnetwork to improve connectivitywith the national network, promotecompetition on the regional networkand improve locomotive andwagon utilisation.Standard gauge access is providedfrom Dunolly to Ararat and Portlandvia Maryborough through provisionof dual gauge track between Dunollyand Maryborough. Although theMaryborough – Ararat line has notbeen used since late 2003, it hasstrategic importance for future grainand mineral sands transport from theState’s northwest to Portland if thenorth-west rail lines are standardised.Standardisation of the regional railfreight network will be determined toa large extent by the support for a raillink between Mildura and the BrokenHill line east of Broken Hill. For thisto occur, the Mildura line would haveto be standardised which wouldthen likely require standardisationof the Sea Lake and Robinvale lineswhich connect with the Mildura lineat Dunolly. The 2008 Mildura lineupgrade used gauge convertibletimber sleepers to facilitate theline’s future gauge standardisationincluding installing a third rail insealed level crossings.If the north-west lines arestandardised, consideration wouldneed to be given to standardisingthe north-eastern broad gauge linesthrough Seymour to Shepparton,Tocumwal and Echuca/Deniliquinto avoid them being isolated broadgauge freight lines. Standardisingthe north-eastern broad gaugelines could provide a connectioninto southern NSW via a reopenedTocumwal to Narrandera railwayline. If the Tocumwal line wasstandardised it would also providean alternative to the Albury corridorfor a Melbourne to Brisbane inlandrailway line.Rail improvements to the ports ofMelbourne and Geelong have beendual gauge to provide for bothbroad and standard gauge trainsand the broad gauge north-eastline between Seymour and Alburyhas been standardised along withthe connecting Benalla to Oaklandsline. Improved rail freight links toMelbourne’s south-east and the Portof Hastings will also have standardgauge capability.Providing standard gauge accessinto the Sunshine grain silos fromBrooklyn would enable domesticgrain trains from the state’s westto gain access to the silos. It wouldalso enable domestic grain to berailed from Oaklands to Sunshine(although this would require graintrains to go to Laverton to reversebecause of the cost and diffi cultyof providing standard gauge accessinto the silos from the north).20 Grain Logistics Taskforce Report

6.5 Track standardsVictorian regional rail freight trainstandards of 80 km/h (or less) at19 tonne axle loads (tal) have appliedfor over 40 years (the exceptionto this is intermodal trains on theMildura and Maryvale lines whichare allowed 20 tonne axle load).A 19 tonne axle load translates intoa 76 tonne gross wagon mass whichis generally a 55 tonne load for awagon with 21 tonne tare weight.In contrast, truck productivity since1995 has increased nearly 60%from 42.5 tonne gross six axlesemi-trailers carrying 28 tonnes offreight to 68 tonne 9 axle B-doublescarrying 44 tonnes of freight.The ARTC’s track standards are19 tal at 115 km/h, 21 tal trains at110 km/h (the general standard forinterstate intermodal trains) and 23 talat 80 km/h (eg heavy ore trains andloaded grain trains). A 21 tonne axleload wagon is 15% more productivethan a 19 tal wagon while a 23 talstandard provides a 30% productivityincrease compared to the regionalVictorian rail freight network. Tofurther increase productivity and railfreight competitiveness the ARTC isincreasing the latter two standards bythe end of 2011 to 23 tal at 100 km/hand 25 tal at 80 km/h respectively onthe Melbourne – Sydney and Sydney– Whyalla corridors.Grain wagons with suitable capabilityare allowed to operate up to 23 tonneaxle load on the ARTC network intothe Port of Melbourne and Port ofPortland, but the Geelong grain loopis presently restricted to 19 tonneaxle load despite connecting to theARTC network. A 50 wagon standardgauge 23 tal grain train using newwagons can transport 3,500 tonnescompared with 2,200 tonnes for a40 wagon 19 tal grain train usingolder wagons.Industry advice is that 19 tal broadgauge Victorian grain wagons couldbe increased to 21 tal subject totrack and bridge capability. Thiswould enable a 40 wagon grain trainto transport 2,500 tonnes ratherthan 2,200 tonnes with consequentbenefi ts for silo clearance.Although increased freight trainaxle loads require higher trackmaintenance costs, this needsto be compared with the lowerroad maintenance costs andimproved road safety arising frommode shift to rail from increasedrail freight competitiveness.6.6 Train and truck driversAn issue affecting both train and truck capacity isavailability of train and truck drivers. There is presentlya national shortage of both due partly to the time ittakes for them to become qualifi ed (18 – 24 months totrain a driver). The present shortage of train drivers isaffecting the rail industry’s ability to provide moregrain trains.However, there is a lag between demand fortrains and driver availability and even when they aretrained they are sometimes offered jobs with othercompanies. The trucking industry has a similar problemin recruiting and training drivers and then havingbecome appropriately qualifi ed to drive grain trucks.It was suggested by industry that the criteria for thetraining and competency assessment of train andtruck drivers be reviewed by relevant licensing authoritiesand the Department of Transport to ascertain whetherthey could be streamlined to assist in addressingdriver shortages in each mode, but withoutcompromising safety.Grain Logistics Taskforce Report 21

7.0 Port issues7.1 Port capacityDeregulation of the export grain market has led to adecline in rail’s share of the Victorian export grain taskfrom about 70% to 50% or less. More grain marketersand increased on-farm storage has resulted in moregrain being trucked direct to port. In the 2010-11 fi nancialyear, rail market share of export grain was approximately40% based on the following port throughputs:• Melbourne: 1.1 million tonnes throughput;rail 20% = 0.2 million tonnes• Geelong: 2.1 million tonnes throughput;rail 40% = 0.8 million tonnes• Portland: 1.0 million tonnes throughput;rail 40% = 0.4 million tonnesIn part this arose from the fl oods in early 2010 whichstranded an export grain train in northern Victoria forsome months, but it also arose because of generallack of rail capacity to transport the record exportgrain harvest (although at increased costs becauseof the higher cost of truck transport).The use of two extra export grain trains in Victoria forthe 2011-12 grain harvest should increase rail’s shareof the export grain task and enable more effi cient grainaggregation at ports with less truck queuing at ornear ports.However, irrespective of delivery mode port capacityand operating hours affect port usage for export grain.The capacity of each grain port terminal is:• Melbourne: 48,000 tonne capacity; 100,000 tonne/month throughput; 24/7 operation• Geelong: 230,000 tonne capacity; 300,000 tonne/month throughput; seven day/week operation,but not 24 hours• Portland: 60,000 tonne capacity; 80,000 tonne/monththroughput; seven day/week operation, but not24 hoursPort capacity, port throughput and port operatinghours all infl uence grain aggregation (amount andtype of grain) at the port and ship calls. Congestionat one port may result in a ship calling at another withconsequent diversion of the landside transport task andassociated implications for the supply chain. Awaitinga ship call also causes problems in the grain supplychain because silos remain full with no ability to clearthem or deliver to them.The Port of Portland is investigating improvingits grain throughput by rail by extending the grainsiding to the end of the grain wharf which would avoidthe need to break grain trains into smaller groups ofwagons for unloading which adds time and cost to theunloading process.22 Grain Logistics Taskforce Report

It is the responsibility of the grain exporter to bookthe marine and AQIS inspections and 24 hours noticeis required. Marine surveyors occasionally conductsurveys while the vessels are at anchor. AQIS surveysare undertaken at berth because AQIS inspectors arenot trained to board ships at sea. Each ship inspectiontakes between two and three hours and must beundertaken during daylight hours. Marine Surveyorsand AQIS inspectors usually conduct a joint vesselinspection however marine surveyors may conducta preliminary inspection at the request of the shipper.AQIS estimates that about 20% of ships fail survey withconsequent delays to the grain supply chain all the wayback to the farm because grain cannot be unloadedfrom port silos or delivered to them. AQIS has advisedthe percentage has not increased relative to thenumber of ships being surveyed.Train stabling at the Port ofMelbourne is also an issue. El Zorrohas commented that broad gaugegrain trains cannot be stabled atAppleton Dock once discharged orthat grain wagons are unable to beleft in common user tracks atAppleton Dock causing delaysand increased operating costsbecause of the need to movethe train elsewhere for stabling.7.2 Ship surveysThe most signifi cant issue affectingport effi ciency for grain transport isa ship being presented for inspectionin an unacceptable condition andconsequently failing survey.Ship surveys are undertaken bymarine surveyors who assess theship’s seaworthiness and whocheck for things like rust, mineralsor contamination and AustralianQuarantine and Inspection Service(AQIS) offi cers who check the ship’sability to hygienically transport grainby checking for things like grainresidues, insects or scale.If a ship fails a marine survey at anchor another shipcan be scheduled in its place until the problems arerectifi ed. A ship that fails an AQIS survey at berth hasrepercussions all the way back up the supply chainbecause loading cannot begin until remedial action istaken, which can take from a few hours to several days.If major remedial work is required, the ship may bemoved off the berth freeing up space for another vessel.The Federal Government is undertaking an ExportCertifi cation Reform Package to examine ways inwhich the export certifi cation process can be improved.One of the recommendations of the Reform Packageis to allow industry to engage its own AQIS AuthorisedOffi cers (AAOs). These will be people trained in exportinspection functions in accordance with Australianexport legislation. Under this reform, ship surveyscould potentially be undertaken at anchor by inspectorswho also conduct marine surveys. This may providecost savings and fewer delays to industry.It would also assist the effi ciency of ship surveys if grainexporters were more particular about the ships charteredto export grain from Australia. Greater focus on thequality of ships used by shipping companies wouldreduce the incidence of ships failing survey which wouldreduce delays throughout the grain supply chain.AQIS inspections are undertaken at off-port terminalsby 30-40 AQIS trained staff, but there is potential toexpand this program by training more staff.Grain Logistics Taskforce Report 23

24 Grain Logistics Taskforce Report

8.0 ConclusionThe grain industry has undergone signifi cant changesin the past few years. These changes, including abolitionof the wheat export ‘single desk’ and the increasein export grain marketers to 27, increased on-farmstorage, the more recent development of local grainco-operatives, increased use of trucks for grain transportand increased containerisation of grain have all led toan increasingly complex grain supply chain. Combinedwith record harvests arising from good rainfalls, thegrain logistics supply chain from farms to ports hasbeen signifi cantly tested.It is apparent that increased coordination is requiredacross all sectors of the grain supply chain to improveinfrastructure utilisation and transport capacity. Therecommendations attached to this report, developedby the Grain Logistics Taskforce after extensiveindustry consultation, should greatly assist improvingthe effi ciency of the grain transport task.ConsultationsAlliance of Councils for Rail Freight DevelopmentAustralian Bulk AllianceAustralian Quarantine and Inspection ServiceAWB/CargillBungeCBHDepartment of Primary IndustriesEl ZorroEmeraldGlencoreGrainCorpGrainCorp (Geelong)Municipal Association of VictoriaPacifi c NationalPort of PortlandRiordansVicRoadsVictorian Farmers FederationVictorian Transport AssociationVicTrackViterraV/LineWimmera Regional Transport GroupGrain Logistics Taskforce Report 25

Appendix A26 Grain Logistics Taskforce Report

MrDavidHillSeniorPolicyManager–FreightNetworkPlanning,NetworkDevelopmentandEfficiencyFreight,LogisticsandMarineDivisionVictorianDepartmentofTransportGPOBox2797MelbourneVIC3001GRAINLOGISTICSTASKFORCEGrainCorpwishestotablethefollowingforthenextmeetingoftheTaskforce.RailsupplychainPacificNational(PN)andGrainCorphaveidentifiedanumberofquickwinsandlongtermactionsthatwill–EnhanceoperationalproductivityContributetoefficiencyandoperationalcompetitiveness.BothpartiesagreethatthebroadgaugenetworkinVictoriaiscompromisedduetoarangeofinfrastructureinadequaciesbetweentheGeelonggrainloopandDunollyviaMeredith.6October2011Resolvingtheinfrastructureshortcomingsreferredtobelowwillsignificantlyreducetraincycletimesandincreaseproductivity.Thiswillleadtoanincreaseintheeffectivecapacityofboththerailnetworkandthegrainexportelevators.RoadsupplychainInadditiontotheserailsupplychainrelatedmatters,GrainCorpproposesthatconsiderationbegiventoimplementationofaGrainHarvestManagementScheme(GHMS),applicabletothetransportationofgrainfromfarmtodesignatedgrainstoragelocation.Asatemplate,GrainCorpisproposingthatVictoriaadopttheGHMSusedinQueensland.Thefollowingdatarelatedtothe2010/11grainharvestclearlyindicatesthatunderloadingofvehiclesis–1. Unnecessarilyincreasingthenumberoftruckmovements2. Decreasingtheoverallproductivityoftheroadsupplychain3. Increasingsupplychaincosts.Inwardtruckmovementsexfarm 188,806Averagetruckweight5+%underloaded42.16t34.86%Numberofadditionaltruckmovementscausebyunderloading 10,703YourssincerelyPeterMarshallTransportManagerGrainCorpOperationsLimitedLevel26,175LiverpoolStreet,SydneyNSW2000POBoxA268,SydneySouthNSW1235T:0293259100F:0293259180www.graincorp.com.auABN52003875401Grain Logistics Taskforce Report 27

28 Grain Logistics Taskforce Report2Infrastructure/NetworkIssuePN/GrainCorpComments Benefit LongTermFixThelackofacrossingloopbetweenGheringhapandBallarattrainmovementsaredelayedwaitingforpathsatGheringhaporBallarat(providedspaceisavailable).ThecrossingloopatMeredithprovidedtheflexibilityneeded.QuickwinSignallerrequiredatvariouscrossinglocationsTrainaccessfeestocoverthiscost.Benefitsimprovedtraincycletimes48to36hrs=25%improvement=abt100,000tonnespertrain@4trains=350,000tonnesoverBG,Longtermautomatecrossingloops.ThelackofacrossingloopbetweenBallaratandMaryboroughtrainmovementsaredelayedwaitingforpathsatBallaratorMaryborough.ThecrossingloopatTourelloLoopprovidedtheflexibilityneeded.QuickwinSignallerrequiredatvariouscrossinglocationsTrainaccessfeestocoverthiscost.ContributestoabovementionedgainAsaboveThecombinationoftheinabilitytooperatemultiservicesbetweenBallaratandMaryboroughandthepassengertraincongestionatBallaratrestrictsanddelaysfreightservices.QuickwinSignallerrequiredatvariouscrossinglocationsTrainaccessfeestocoverthiscost.ContributestoabovementionedgainAsaboveAllowingservicesfromGeelongandtoGeelongtocrossbetweenBallaratandWarrenheiptocrosscouldthisbeachievedwithinfrastructurechangessuchastheinstallationofcrossovertracks.QuickwinAchievedwithinfrastructurechanges,suchastheinstallationofcrossovertracks.AllowasblockpointContributestoabovementionedgainLongtermNeedtolookatyardconfigurations

Grain Logistics Taskforce Report 293ThelackofasuitablesafeworkingarrangementBallaratandMaryboroughasafeworkingarrangementwhichprovidestheabilityformultitrainrunningbetweensameQuickwinEstablishblockpointsContributestoabovementionedgainLongterm,reinstatecrossingloopatTourelloLoopandlookattrailablepointsUP/DNcrossingloop.ThesafeworkinghoursforDunollyDunollywillbeanimportantgrainhandlingandtrainoperationalsiteduring2011/12andtherewillbeneedformanningDunolly24/7whenrequired.QuickwinManlocations24/7AllowsDunollytobeusedasaninlandterminalwhenportblocksout,LongtermMaryborough/DunollyautomatefromBallarat.ThecrossingloopatWatchemQuickwinThecrossingloopatWatchemrequiresmanningforacrosstobeperformedautomatingthetaskwouldallow24/7operation.CycletimeimprovementsLongtermautomateforimprovementandallow24/7operation.AlsoletsbemindfuloffutureMildurapassengerserviceThereare97xTrackSpeedRestrictionsontheGrainLineNetworkand69xTSRarebetweenGheringhapandYelta.QuickwinReviewifspeedrestrictionarerequiredduringdayandnighttime.Reviewnighttimeoperation.MosttimelostbetweenBallaratandOuyen.Wouldimprovecycletimeby4to5hoursperroundtripLongterm,improve/upgradelevelcrossings,ReopenthelinebetweenDimboolaandRainbow.Done ReopenthelinebetweenSheppartonandDookie.Needtohaveathinkabout,fullbenefit,improvedcycletimes,tonnesonlineabout28km,maybesplittrainDookie/MurchisonEast

30 Grain Logistics Taskforce Report4NoconfirmationofthesafeworkingarrangementsontheMurtoatoHopetounlinetocopewith2trainsoperatingattheonetime,eg.Ilukaandagraintrain.QuickwinBlockpointsatWarrackneabealandBeulahSTCapacityimprovementLongTerm–automateforimprovementThesafeworkingarrangementsonARTC'sBenallatoOaklandslinewillnotpermit2trainstooperateonthelineatatime.QuickwinBlockpointsatYarrawongaandWangamong,andLockingAwayabilityatOaklandsAWB.CapacityimprovementLongTerm–lookatCrossingLoopReopenthelinebetweenEaglehawkandInglewoodOperatingallservicesviaMaryboroughrestrictsmovementsandwillbeimpactedbetweenSunshineandBacchusMarshduringtheRRLproject.ProviderouteoptionsandfastercycletimesLongTermoptionPoortrackconditionsresultinginlowtrackspeedsservicingsitesonthebranchlinesreducesproductivityduetothelowtrackspeeds.Lowtrackspeedsimpactnetworkandcycletimes.CapacityandcycletimeimprovementsLongTerm–reviewtrackspeedsandinfrastructureimprovementsrequiredAmoreflexiblesafeworkingarrangementwhichpermitsatraintobestabledonalineduringloadingorduringtraincrewchangeover/traincrewrest.QuickwinNeedtoreviewlocobeingstableinsidings,treatnodifferenttowagons.RiskassesstomeetTSVrequirements,rulechangeImprovedcycletimesLongTerm–rulechamgeThemanninghoursforNthGeelongCBoxideallyprovisionformanning24/7whenQuickwin24/7manningEfficiencyandCycletimeimprovementsLongtermautomate

equired.Automationofthislocationwouldbeanidealsolution TheRegionalRailLinkProjectTheRegionalRailLinkprojectwillplaceextrapressuresonPN'sabilitytomeet2436hourtrainturnrounds.ItisproposedtrainswouldoperateviaGeelongtoMelbourneduringtheproject.CycletimeimprovementsGivesomepreferencetofreight,CapacityissueonGheringhaptoBallaratlineSeeaboveCapacityissuewithGeelongGrainLoopNeedmoreflexibilityinGeelong,GrainLoop,removestaffandcallasiding,allow2trainspastblockpoint.Needabilitytoloadwagonstomax.92.0tor23.0taxleload.CapacityimprovementsQuickfix.DualgaugeintoSunshineallowsSGexWesternpartofstate,AllowsSGexWesternpartofstate,CapacityimprovementLongTerminfrastructureimprovement5Grain Logistics Taskforce Report 31

More informationWebsite www.transport.vic.gov.au/freightEmail david.hill@transport.vic.gov.auPhone 03 9655 3455For further information in yourlanguage please call:www.transport.vic.gov.auAuthorised by the Victorian Government, 121 Exhibition Street, Melbourne.DOT6582/11