November 21, 2005

Australian wheat exports face rail shortage problem
 

Australian wheat exports faced a rail shortage problem in the form of insufficient investment in trains and freight infrastructure.

Pacific National (PN), the rail company with a monopoly on moving grain from silos to ports in Victoria and New South Wales states, lacked sufficient trains and wagons to transport the 2005 crop, according to industry reports.

Wheat production in both states was expected to rise by as much as 60 percent, as rains in June and July broke the drought and resulted in heavy late planting.

However, shipment delay due to rail shortage meant farmers risked losing high premiums for their highly demanded wheat.

PN ran one export train daily from its main grain terminals in New South Wales to Port Kembla or Newcastle city within the state during the drought. However, up to four trains would be needed to transport the 2005 crop.

PN said it would provide up to six trains to transport Australia's export crop on the east coast. However, the company reportedly lacked enough staff and vehicles for transportation.

PN was also reportedly involved in disputes with its train drivers and an investment dispute with GrainCorp. GrainCorp moved the grain from farms to rail terminals and then loaded them on to ships.

The investment dispute limited PN's ability to profitably invest in rail stock, the company claimed.