Improving Australia’s containerised grain exports

25 August, 2022

Exporting grain in shipping containers will continue to play a significant role in the Australian grain supply chain despite global COVID impacts, according to new AEGIC analysis.

The report, Improving Australia’s containerised grain exports, analyses the importance of containerised grain trade compared with bulk grain shipping. The AEGIC investigation was a co-investment of the Grains Research and Development Corporation and the South Australian Grains Industry Trust.

“Containerisation of grain is especially important in Victoria, New South Wales and Queensland, often comprising a third of their grain exports,” the report’s lead author Professor Ross Kingwell said.

“Overall, Australia often exports up to 4mmt of containerised grain, a significant volume. In 2021-22 this was even higher, with almost 6mmt of containerised grains and grain products worth $4 billion exported.

“However, during COVID, escalating shipping costs, higher terminal access fees, greater unreliability of access to shipping services, and port labour disruptions eroded the profitability of containerised grain exports.”

Professor Kingwell outlined that although grain containerisation often usefully complements bulk exports, it involves a wide array of execution risks.

“Case study participants in the investigation pointed out that growers needed to be better informed and equipped to manage those risks, if ever they ventured into grain containerisation,” he said.

The study outlines how Australian governments could aid cost effective, low emission flows of containerised grain via their oversight and regulatory roles.

“AEGIC encourages governments to more effectively regulate container ports to boost their efficiency and help avoid any risk of anti-competitive behaviour,” Professor Kingwell said.

“Container port developments also need to achieve enduring economic and ESG (environmental, social, governance) outcomes rather than provide short-term budgetary relief for governments or commercial advantage solely to incumbents.

“The report recommends local and state governments actively protect buffer zones of preferred containerised grain pathways.”

Professor Kingwell said the flow of containers in and out of Australia would only increase as populations in Australia’s main cities increase further.

“To lessen future road traffic congestion, AEGIC recommends greater investment in intermodal hubs and rail access to ports,” he said.

“Increasing volumes of containers will increase the demand for space to house empty containers at or near ports. Provision of land and infrastructure for empty container parks and rail services to ports will be a major investment challenge for governments and industry due to the expense and scarcity of land at and around Australia’s main ports.

“A wide array of grains and grain products are exported in containers to customers in Australia’s neighbouring countries; especially in East Asia, South East Asia and South Asia. Their demand for containerised grain is destined to increase as their populations and incomes grow. This provides a growth opportunity for Australia’s grain industry.”

The project team, which included top supply chain experts Nigel Hart and Scott McKay, also produced a series of case study videos highlighting businesses involved in the container grain trade. The highly-experienced participants included:

  • Mark Schilling (AG Schilling & Co), South Australia
  • Roger Fletcher (Fletcher International Exports), New South Wales
  • Sam Conway (Boolah Farms), New South Wales

Each gave valuable insights into the key lessons learned from their years of experience in the container grain trade.

The full report is available here: https://www.aegic.org.au/publications/australias-containerised-grain-supply-chains/

Case study: AG Schilling & Co (SA)

Case study: Fletcher International (NSW)

Case study: Boolah Farms (NSW)

Media contact
Keir Tunbridge
0409 991 817

AEGIC is an investment of Australian grain growers and the Australian Government through the Grains Research and Development Corporation (GRDC), and the Western Australian Government through the Department of Primary Industries and Regional Development (DPIRD).

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