WESTERN Australia’s CBH Group general manager of operations, David Capper, estimates freight rates over the 2016-17 WA harvest will be reduced from previous-year rates by around four per cent.
“We’ve had a number of good harvests and are expecting another this season – 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.”
CBH Group is currently negotiating with Brookfield Rail for an interim rail access agreement, with the current agreement set to expire on December 31, 2016, while arbitration continues to settle long-term access arrangements. Grower freight-rates will be contingent on the outcome.
The group hopes to finalise freight rates early in 2017, including Brookfield Rail’s access fees, and to secure cost-effective road transport options.
Road transport has been aided by a slight reduction in fuel prices since the previous season’s rates were set in February.
Storage and handling rebate
Meanwhile, growers who delivered and sold grain to CBH last harvest will receive $4.20 per tonne to offset storage and handling fees this harvest through the Grower Patronage Rebate Program.
CBH chairman, Wally Newman, said the co-operative continued to create, and return, value to growers, keeping them internationally competitive.
The total $4.20/t rebate is made up of a $3/t rebate from operations and $1.20/t rebate from marketing and trading.
“These savings are significant for our growers and come on top of storage and handling charges which are already substantially lower than industry standard,” Mr Newman said.
The rebates for each grower are calculated based on the tonnes of grain delivered and sold to CBH in the 2015/16 harvest. That combined figure then offsets the storage and handling fees of the upcoming season.