THE ability of the Australian grains industry to compete internationally is being seriously hampered by supply-chain inefficiencies, with recent record harvests highlighting a need for more capacity in the current network, a GrainGrowers-commissioned report has found.
The Connecting the Dots: Improving Australian Grain Supply Chain Efficiency report was compiled by independent global strategy consultancy LEK.
The report points to the record winter-crop production of 65.7 million tonnes in 2022-23, illustrating the significant impact of high supply-chain costs affecting growers and threatening the global competitiveness of the Australian grain industry.
GrainGrowers chair Rhys Turton said six key areas were found to adversely impact freight efficiency, reduce grower profitability, and affect international competitiveness.
The report found each of the areas has a range of opportunities to improve efficiency of the grain freight supply chain as follows:
Road funding: Systemic long-term underfunding has left Australia’s regional road network in an extremely poor condition, with most government charges directed to consolidated funds. Insufficient funding for local government, responsible for 87 percent of Australia’s road network, impacts road maintenance and upgrades, restricting high-productivity freight vehicles accessing “first and last-mile” roads essential for getting grain to market and significantly hampering overall freight efficiency.
Bridge infrastructure: Across Australia, thousands of bridges require replacement, with relatively low load limits restricting modern larger freight vehicles and impacting efficient access on key grain freight routes.
Road regulation: Costly and lengthy permit requirements constrain higher-capacity vehicles transporting grain across multiple locations (farm gate, local roads) outside the heavy vehicle networks, magnifying inefficiencies in heavy vehicle road regulations.
Rail network and governing regulation: A patchwork of track gauges, axle loads, rail infrastructure managers, and regulation significantly reduce rail freight efficiency, creating extensive operational complexity and increasing costs to grain growers using the network.
Supply-chain data: Stakeholders require robust, publicly accessible data to provide performance transparency, mitigate disruptions, drive day-to-day improvements, and inform policy, long-term investment, and other strategic decisions.
Port connectivity: A mix of rail and road access and land use planning constraints at major bulk grain ports hampers efficient access for grain exports, which amount to approximately 75pc of grain production.
“Our members identified freight and supply chains as a key concern in our Annual Policy Survey, so it comes as no surprise the report identified increased capacity and efficiency of the supply chain as critical to the long-term viability of the industry,” Mr Turton said.
“To remain competitive, increased supply chain efficiency is required to reduce costs for growers. Australia needs a freight network that can export Australia’s grain as quickly and efficiently as possible to capture high international prices during times of reduced global supply.”
“Maximising the grain supply chain’s potential requires coordinated investments of capital, time and effort into policy, funding and operational optimisation.”
GrainGrowers is now developing a comprehensive strategy to drive improvements and efficiency and help ensure competitiveness and profitability for Australian growers.
“We will be looking at how to prioritise issues and what we firmly believe are the critical next steps.”