Grain Logistics Taskforce Report - Department of Transport

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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
Page 1 and 2: www.transport.vic.gov.auGrain Logis
Page 3: ContentsIntroduction 4Executive Sum
Page 7 and 8: Ship surveys8. The Victorian Govern
Page 9 and 10: Wheat is Australia’s biggest and
Page 11 and 12: Generalised grain supply chainMarke
Page 13 and 14: 4.3 Containerised grainContainerise
Page 15 and 16: 5.3 Off-farm transportTrucks are us
Page 17 and 18: The increase in on-farmstorage and
Page 19 and 20: 6.0 Silo to port6.1 Grain train ava
Page 21 and 22: 6.5 Track standardsVictorian region
Page 23 and 24: It is the responsibility of the gra
Page 25 and 26: 8.0 ConclusionThe grain industry ha
Page 27 and 28: MrDavidHillSeniorPolicyManager-Frei
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Page 31 and 32: equired.Automationofthislocationwou

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