The Impact of Freight Costs on Farm

Summary

​As a sector of the Australian economy, agribusiness plays strongly to Australia’s natural and structural competitive advantages, and is a sector producing what the world increasingly wants.For this reason, Australian agriculture is a significant export industry. Roughly two thirds of our food and fibre is sent to overseas markets. Global food demand is expected to rise as the world’s population increases over the next 20 years, creating new growth opportunities for the export of Australian produce.A key determinant in ensuring that Australian agriculture can reach its full export potential is the cost to transport food and fibre from paddock to port. At present, this cost is the largest single cost item in the production of many agricultural industries and has the potential to undermine the global competitiveness of Australian agriculture and its export growth potential. Aside from specific and limited case studies, there is very little information about the precise magnitude of this cost and its drivers.

Program

National Rural Issues

Research Organisation

Deloitte Access Economics

Objective Summary

This project seeks the following outcomes:Comprehensive analysis of the freight costs for farmers in moving their produce to port Examination of the efficiency of different regulatory, planning and funding strategies for infrastructure in Regional Australia Consideration of how the freight cost benefit of a national strategy can be returned back to farmers.The study will produce a comprehensive analysis of the freight costs facing farmers when moving 45 commodities to port. Using desktop analysis of previous supply chain studies along with our own research, we will determine the freight costs in moving these commodities to market and identify the key major freight routes. We will develop 45 case studies about these freight movements and the costs being faced by farmers at the farm gate. These costs will be benchmarked against competing international supply chains, again using desktop analysis.Through economic trend analysis, we will identify and map the future freight needs for these commodities, and examine the efficiency of different regulatory, planning and funding strategies for freight and logistics infrastructure in Regional Australia. Our analysis will also consider the challenge in ensuring how the freight cost benefit is reflected back to farmers.

Project Code

PRJ-011380

Project Stage

Closed

Project Start Date

Tuesday, May 8, 2018

Project Completion Date

Thursday, August 30, 2018

Journal Articles From Project

Not Available

National Priority

An environmentally sustainable Australia

National Priority

Advanced Technology

National Priority

NRI-National Rural Issues

Contact