CSIRO pilot study finds significant cost reductions

On Thursday 21 March 2019, the Deputy Prime Minister and Minister for Infrastructure, Transport, Cities and Regional Development, Michael McCormack addressed an Industry Leaders Summit in Brisbane and launched a report by CSIRO into the supply chain benefits of Inland Rail.

The pilot study mapped supply chain movements originating, terminating and passing through the Parkes, Narromine and Dubbo regions and found that Inland Rail will significantly reduce transport costs for some agricultural products.

Agriculture contributes 2.7% to Australia’s GDP. In 2016, agriculture directly employed 228,372 and the numbers continue to grow. When you include food and beverage manufacturing, fibre manufacturing and wholesale trade, that number more than doubles.

The majority of these people live in regional Australia. They produce the food we eat, the clothes we wear and the materials used to build the structures we live and work in.

Most of our nation’s agriculture is grown in the eastern states, in regional communities. Reducing the transport costs incurred when moving agricultural products from paddock to plate is critical to ensure more money stays in farming families’ pockets and is invested back into inland communities.

Efficient supply chains have the potential to generate significant cost reductions for agricultural producers. The findings of the Inland Rail CSIRO TraNSIT Supply Chain Mapping Pilot demonstrate that a shift from road to rail for horticulture and post-processed food products will have tangible benefits at the local and national levels.

Key findings of the CSIRO report are that:

• Shifting horticulture and post-processed agriculture from road to Inland Rail could reduce transport costs for the agricultural industry by an estimated $70 million per year. 
• An average transport cost saving of $76 (or a range of $64-$94) per tonne can be achieved for horticulture and post-processed food supply chains when shifting from road to Inland Rail.
• For horticulture products currently transported by rail on the coastal line, there is a potential average transport cost saving of $31 per tonne when shifting to Inland Rail.
• A reduction of up to 63,000 heavy vehicle trips per year along various segments of the Newell Highway, due to horticulture and post-processed food moving to rail.

CSIRO’s modelling also demonstrated, through two hypothetical scenarios, new market opportunities that Inland Rail could deliver to local farmers. Further analysis will deliver more detailed information at the local level.

The study will be rolled out this year between Narromine and Seymour to capture a broader geographic region and additional supply chains.

Read the CSIRO Inland Rail Supply Chain Mapping report.

You can find out more about TraNSIT on CSIRO’s website.