GrainCorp reduces freight rate by 2%
GrainCorp Limited (GNC) said it has reduced the average freight rate per tonne by 2% across the 197 GrainCorp sites served by rail for the 2010/11 harvest. The company said for more than 100 sites, it has reduced rail rates by an average of $2.40 per tonne, or over 6%.
CEO, Ian Wilton, said the road rates would be subject to variation if the price of fuel increases above the company’s forward estimates, or if demand for trucks outstrips supply at critical times.
Mr Wilton also said the company would continue the practice which started last year of bidding site-based, rather than ‘at-port’, prices to growers at its sites.
“To arrive at our site-based prices, we will be using our own freight rates,” he said. “GrainCorp will not be using the Grain Trade Australia (GTA) location differentials. These have traditionally been used to deduct a ‘freight’ component from port prices.
Mr Wilton said the company believes the site-based pricing would help resolve the lack of clarity about the way location differentials are used.
GrainCorp also hopes that growers would see the reduction in rail rates, their early release and the clarity of the rates compared to the use of location differentials, as a positive signal.
As at 1013 AEST, Graincorp shares were up 6c to $5.37.
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