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Transport & Logistics

Rail at the centre of massive GrainCorp restructure

24 Jun 2014, by Informa Insights

GrainCorp, one of Australia’s largest grain handlers, is set to undergo a massive operational overhaul – with a shift from road to rail at the heart of its plans.

The company recently released details from its “Project Regeneration”, which will take place over three years and cost around $200 million in total. This sum represents the single biggest capital investment in the firm’s national grain storage and transport network, several news channels report.

Speed and efficiency have been the main factors driving GrainCorp’s restructure plans, as the company looks at how it can transport up to a million tonnes of grain in the most cost-effective manner. GrainCorp ultimately identified focusing on the rail network and streamlining train cycle times as the best way forward.

GrainCorp executive chairman Don Taylor outlined some of the biggest rail efficiency challenges that are currently plaguing the company’s operations.

“Slow loading and short sidings mean grain trains are shunted across multiple sites and cycled slowly, creating both cost and complexity. Furthermore, poor track conditions limit wagon weights and track speed, adding to inefficiencies,” he was quoted as saying in a June 11 Rail Express article.

“GrainCorp’s investment will significantly improve our network’s interface with rail and help reduce rail costs by $5 per tonne.”

As part of the restructure, GrainCorp will cut down the number of its storage network sites to 180. This will require more than 70 sites across the network – which amount to less than 10 per cent of the east coast crop capacity – to be closed down.

In addition, GrainCorp will reshuffle its network into 34 “clusters”, each comprising one or two “primary sites”. This move will also expand the capacity of grain that can be transported over rail.

GrainCorp’s restructure represents one of the biggest individual rail projects in Australia in recent times, and highlights the vital role this transport method plays in a variety of industries.

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