CANBERRA: A Report compiled by the Australian Export Grains Innovation Centre (AEGIC) has found Australia’s grain transport supply chain compares unfavourably to Canada, one of its major competitors for export markets.
The report, titled The puck stops here! – Canada challenges Australia’s grain supply chains, claims there is a real need for improvement in the supply chain if Australia is to remain competitive. “Canada in particular is becoming increasingly more competitive, challenging Australia’s key Asian export grain markets,” AEGIC chief executive David Fienberg said.
The key differences between Canada and Australia are that in Canada, higher volumes of grain are stored on-farm for longer and the system operates on a just-in-time basis with grain moved to port when a sale is secured. Conversely, in Australia the majority of grain is moved from farm to warehouse immediately after harvest.
Grain Growers general manager of policy David McKeon also said the Canadian system tended to move grain longer distances, making it more efficient per kilometre. “Generally in Australia grain is moved less than 500km to port, whereas in Canada it is often 1200-1300km.”
Mr Fienberg said the Canadian industry was now reaping the benefits of significant investment over the past 15 years, with the number of high-throughput receival sites located on high capacity, highly efficient rail lines doubling. “The majority of Canadian grain is now delivered through this infrastructure, which has reduced the time taken to deliver grain to port by one third,” he said.
In terms of absolute costs, Mr Fienberg said Canadian supply chains still operate at a higher cost than Australian supply chains, due to the long distances the grain travels. However, with higher grain yields, Canada can deliver grain into Asia at almost the same cost as Australia, he said.
