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Inland Rail could save agricultural industry $70M per year

Shifting agriculture and horticulture from road to rail through the Inland Rail project could reduce transport costs for the agricultural industry by around $70 million per year, according to research from the CSIRO.

Australia’s national science agency used its Transport Network Strategic Investment Tool (TraNSIT) and industry engagement as part of a study in 2018, with a focus on Parkes to Narromine in Central West NSW.

Researchers identified a baseline of existing freight movements in the areas to estimate the potential transport cost savings for the entire Inland Rail project, one of the first detailed analyses on road to rail supply chains in Australia.

Horticulture and processed agriculture such as meat, rice and dairy were considered by the research.

The analysis showed if existing agricultural road trips were shifted to Inland Rail, the agricultural industry could save between $64 to $94 per tonne, depending on back-loading, adding up to around $70 million in reduced transport costs a year.

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Additional analysis also found if existing coastal rail trips shifted to Inland Rail, it would result in an estimated saving of $28 to $35 per tonne.

CSIRO TraNSIT leader Andrew Higgins said the research shows Inland Rail would bring an improvement in rail travel time and transport costs, particularly important when considering perishable products.

“This would make it a lot more competitive with the travel time advantages of road transport,” he said.

Parkes to Narromine was chosen for the case study as it is the first section of track to undergo construction, with a large number of supply chains in the area that have hundreds of stakeholders.

“A big cost in food production is transport, particularly given the large distribution of where and when it is grown across Australia, and the long distances to major domestic markets, often over 1000 kilometres,” Higgins said.

“These type of savings with Inland Rail would mean food companies would have lower cost access to markets further away than they supplied to in the past.

“The benefit is for those selling to market, basically large farming corporations, food companies and those behind processing facilities. You’d expect the savings would then be passed back onto farmers,” he said.

TraNSITwill now be applied to the broader Inland Rail corridor, starting with Naromine to Seymour, to obtain further detailed cost savings across a wider range of commodities, including grains, cotton, wool, minerals and general freight.

The tool has previously been used to test the benefits of transport infrastructure in regard to upgrading roads in Northern Australia and calculating agricultural and forestry transport benefits for industry and government.

The Australian Government has committed $9.3 billion to complete the 1700 kilometres network of freight rail that will connect Melbourne to Brisbane in under 24 hours.