Senator the Hon Mathias Cormann

Farmers and regional communities will benefit from significantly larger freight cost savings to be achieved through the Inland Rail, a new CSIRO transport cost study has revealed.

CSIRO used its Transport Network Strategic Investment Tool (TraNSIT) to conduct a forensic supply chain analysis which indicates potential transport cost savings of between $64 per tonne and $94 per tonne, by moving farm freight onto the Inland Rail line.

The CSIRO’s fresh findings eclipse a 2015 study which previously forecast an overall freight cost reduction of $10 per tonne could be achieved by building the Brisbane to Melbourne rail route.

The new analysis has forecast a potential average transport cost saving of $76 per tonne for horticulture products and post-processed food road trips shifted onto the Inland Rail.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack welcomed the CSIRO’s new findings in a report released at an Inland Rail leaders’ forum held in Brisbane today.

Mr McCormack said the expert costing analysis was further justification of the Liberal and Nationals Government’s decision to commit $9.3 billion to build the transformational Inland Rail route, to help boost economic growth and jobs in regional communities.

“Inland Rail has been described as a game-changer for our farmers and rural and regional communities and the CSIRO’s analysis showing freight savings of up to $94 per tonne highlights why we’re building this 1700-kilometre corridor of commerce,” Mr McCormack said.

“Australian farmers have called on the Australian Government to build infrastructure that improves their market access and helps create efficiencies which can drive freight costs down and that’s precisely what we’re doing by building the Inland Rail.

“Higher freight savings per tonne means more money going into farmers’ pockets which is especially critical for those doing it tough, due to drought.”

Finance Minister Mathias Cormann said the CSIRO’s report showed why the Australian Government is committing $9.3 billion in the Inland Rail to get ahead of the game with the nation’s freight task set to double by 2030.

“The types of freight savings forecast by the CSIRO’s report will mean flow-on benefits for our national economy and demonstrates why it makes economic sense to build the Inland Rail,” Senator Cormann said.

“Efficient supply chains also support our capacity to enhance economic opportunities associated with our Free Trade Agreements which we have signed with major export destinations such as China, Japan, South Korea and now Indonesia.

“This is all about driving current and future economic productivity and export growth by lowering the costs of doing business and to participate in existing markets and enhancing access to new markets.”

National Farmers’ Federation (NFF) Chief Executive Officer Tony Mahar said the Inland Rail project has the potential to transform the movement of east coast agricultural freight, with up to 70 per cent of Australian agricultural produce exported.

Mr Mahar said a significant portion of farmers’ production costs is tied up in getting produce from farm to port and efficient paths to market are therefore key to growing farmers’ returns and overall to Australia’s international competitiveness.

“The NFF welcomes CSIRO’s conclusion that the landmark infrastructure project could save horticulture growers an average of $76 per tonne in transport costs and result in 63,000 fewer heavy vehicle trips per year along sections of the Newell Highway. We acknowledge the Federal Government’s recognition of the importance of efficient, modern freight transport to Australian agriculture and welcomed the in-full funding of the project in the 2017-2018 Budget,” he said.

TraNSIT was used to examine freight movements and costs associated with supply chains linked to the Parkes to Narromine segment of the Inland Rail in Central West New South Wales and will look at others in future; including the southern half of the corridor from Narromine to Seymour and the northern half of between Narromine and Toowoomba.

CSIRO report: www.inlandrail.gov.au 

CSIRO Study Fast Facts

• Shifting horticulture and post-processed agriculture from road to rail will save an average $76 per tonne (and a range of $64-$94)
• Shifting horticulture and post-processed agriculture from the current coastal line to Inland Rail will save an average $31 per tonne.
• Shifting horticulture and post-processed agriculture from road to rail between Parkes to Narromine will result in an estimated 63,000 fewer heavy vehicle trips along segments of the Newell Highway, (i.e. in the study area between Parkes and Narromine).