Viterra decision provides competitive supply chain to Eyre Peninsula growers
26 February 2019
Viterra will transition to road transport for the movement of all grain on Eyre Peninsula from 1 June 2019 to ensure the company continues to provide growers and exporters with a competitive supply chain.
Viterra Commercial & Logistics Manager James Murray said it is essential Viterra provides an efficient and cost effective service that meets the needs of growers and exporters to ensure South Australian grain is competitive internationally.
“We have a long term commitment to providing grain storage and handling services to Eyre Peninsula growers and maintaining Port Lincoln as a key export terminal for South Australian grain,” James said.
“Since 2010, Viterra has spent $128 million on maintaining and improving our supply chain and services to growers and exporters on Eyre Peninsula.
“As a customer of the rail service, Viterra spent a significant amount of time working with Genesee & Wyoming Australia (GWA) to assess a number of different options to continue using the rail network.
“We entered a three year agreement in 2015, and extended it for a further 12 months in 2017 to allow more time for us, GWA, Government and stakeholders to work through options.”
The condition of the rail infrastructure, the restrictions it placed on operations, and ultimately the cost have all contributed to rail no longer being efficient or cost effective to move grain.
In addition, volume is vital for the competitiveness of rail and Viterra is the only customer using the rail network and grain is the only commodity transported.
The current rail agreement between Viterra and GWA was extended for a further two months until 31 May 2019 to meet export shipping bookings for the 2018/19 season.
With an outcome reached, Viterra will transition from a combination of road and rail transport to use only road transport for moving grain on Eyre Peninsula.
“This is a significant decision for the business, one we have very carefully assessed and considered. We are reviewing the need for investment at our sites to support the transition from rail to road.
“We have made this decision based on the current situation and the information we have available. If the situation changes with rail on Eyre Peninsula and it becomes efficient and cost effective compared to road freight, we will certainly reconsider our options.”