Oakey Beef Exports on track to switch from road to rail freight

 

News article: Oakey Beef Exports on track to switch from road to rail freight

A southern Queensland meat processor says it is on track to make the switch from road to rail freight.

  freightgate Minister for Railways

Location: Albury, New South Wales
There is no doubt in my small mind @Sulla1 is the master and what an exciting time for rail in Queensland.

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  Sulla1 Chief Commissioner

Nah, I'm more of the "Jack of all trades and master of none."

Aurizon is certainly in the mood for trying new ways of making money...currently it has walked away from its unit train/no shunting model for the Burdekin sugar trains by having the Inkerman and Kalamia sugar sets haul molasses tankers as well. These trains now have to shunt at the mills and South Yard to attach and detach molasses wagons, which avoids running a separate molasses train...if this succeeds I suspect unit trains elsewhere (maybe grain or cattle) may begin hauling additional freight with the same origin or destination points...everything old is new again.
  RTT_Rules Dr Beeching

Location: Dubai UAE
I believe Towoomba and Oakey used to have container freight trains but I understand this stopped for a few reasons and one was the tunnels limit the container heights and the growth in the coal traffic making paths harder to get. And probably lack of interest by the operator.
  Trainplanner Chief Commissioner

Location: Along the Line
These developments are good to hear.   I think there are many stories to be told about all the operators "walked away" so to speak from many small scale traffic flows in favour of single commodity bulk train operations.   These types of examples that Sulla1 brings to the forums are very much akin to what the shortline operators undertake in North America and do so very well.   In my day to day reading I recall some Major Class 1 railroads on certain corridors source as much as 30% of their carload and "blocks" of traffic from shortline operators.   Hearing that Aurizon is sourcing new cattle traffic outside of the existing business is extremely encouraging.
  Trainplanner Chief Commissioner

Location: Along the Line
Sulla1 out of interest from which areas are Bothwicks likely to source the livestock???   Is it largely confined to the central region.  325  services a year is quite a lot of activity in addition to the existing livestock operations.
  Sulla1 Chief Commissioner

Most, if not all, of these new cattle trains look set to originate from the North West - Cloncurry, Julia Creek and Richmond. Some may come from Winton or Clermont. I suppose there is a small possibility cattle may be sourced and railed from the Mareeba region, but that is purely speculation on my part (cattle railing from Mareeba hasn't occurred for close to fifteen years).
  james.au Chief Commissioner

Location: Sydney, NSW
Whats the chances of cattle trains coming in from NSW (at least the northern parts) once Inland Rail comes through and assuming SG access can be granted to Oakey?
  RTT_Rules Dr Beeching

Location: Dubai UAE
Whats the chances of cattle trains coming in from NSW (at least the northern parts) once Inland Rail comes through and assuming SG access can be granted to Oakey?
james.au
Maybe, but unlikely. QR CattleTrain is not commerically viable on its own and part of the reason for the large cut back in services through the late 90's and 2000's and 100% closure of pig transport and switch to only usually frequent block trains and abandonment of cattle train services from branch lines that had little or no other traffic.

The subsidy number I heard about 15 years back was 20% cost recovery, hence the focus on very long haul which is probably much improved now.

The NT line originally promoted cattle as a potential source of traffic during its intial proposals and nothing yet. The fact that there is no other rail cattle (live stock) services in Australia sort of says to me its difficult to make this pay.
  james.au Chief Commissioner

Location: Sydney, NSW
Hmm, interesting RTT.  Thanks.  Is there any large fixed cost to be covered, such that additional volume would help the profitability?  Or is it just a difficult cargo to make profitable?  

As an aside, I have it in my mind that there is something like that number of cost recovery for the NSW grain lines, though id have to dig through some reports to check that.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Hmm, interesting RTT.  Thanks.  Is there any large fixed cost to be covered, such that additional volume would help the profitability?  Or is it just a difficult cargo to make profitable?  

As an aside, I have it in my mind that there is something like that number of cost recovery for the NSW grain lines, though id have to dig through some reports to check that.
james.au
The problem with catle is the volumes in the tonnage required to move them by rail is just not there for most of the state. Farms are obviously very spread out and there is considerable labour and time required for modal transfer and the whole time you are dealing with a live animal that is soon to be food. Hence you need to look after it or it devalues and of course the legal side. You need to water it, they cannot just be locked up in a rail wagon for days on end etc etc etc.

I'm not sure but I think if an animal is reported fallen down in a truck or train by a member of the public, the operator can be fined?

A B double truck can get from almost any farm gate to within almost any meat works in Qld within 24hr.

The industry is also very diversified compared to the past and cattle from Quilipe area now head to SA for processing via the back door out of Qld.

Actual infrastructure is I think cheap. But if you could get 5-7 trains a week, then you can employ full time staff at the yards, but this won't happen anywhere.

In many ways I dont' blame the railways walking away from this one!
  Sulla1 Chief Commissioner

Whats the chances of cattle trains coming in from NSW (at least the northern parts) once Inland Rail comes through and assuming SG access can be granted to Oakey?
james.au
The Bothwicks contract has been made outside of any state subsidies and is a 100% commercial arrangement as best as I can tell...so based on that, providing the origin area for cattle production can produce high enough volumes then it may be possible Aurizon and processors may consider cattle railings from south of the border...but bear in mind, cattle production in Northern and Central NSW is a fraction of that produced in Central and North West Queensland, and the Northern Territory, so volumes may not be there. The cattle crates used by Aurizon are fitted to container wagons so are easily gauge convertible with demand.

The Bothwicks plant is owned by Nippon Meats (the same as Oakey) and isn't a particularly large plant (ninth in terms of slaughter rates in QLD at 750 per day), but appears to have decided to move to almost 100% rail delivery to make itself commercially attractive to Aurizon. Presumably the Oakey plant (with a capacity of 1200 animals per day) will do the same once the rail connection is reinstated.
  james.au Chief Commissioner

Location: Sydney, NSW
It would be interesting then to understand what sort of margin Aurizon is looking to make on the Oakey trains.
  bevans Site Admin

Location: Melbourne, Australia
It would be interesting then to understand what sort of margin Aurizon is looking to make on the Oakey trains.
james.au

They would need to be sufficient to meet internal hurdle rates and probably on an agreed GM?

What might be interesting is cattle trains from QLD to NT or NT/QLD for slaughter?

What cattle processing plants are adjacent to the rail network in NSW?  Aberdeen Meats used rail.
  james.au Chief Commissioner

Location: Sydney, NSW
It would be interesting then to understand what sort of margin Aurizon is looking to make on the Oakey trains.

They would need to be sufficient to meet internal hurdle rates and probably on an agreed GM?

What might be interesting is cattle trains from QLD to NT or NT/QLD for slaughter?

What cattle processing plants are adjacent to the rail network in NSW?  Aberdeen Meats used rail.
bevans
At a minimum, break even would be required.

You raise an interesting issue around the NT/QLD cattle trains.  The live export debate has flared again in the press.  Linking to the Queensland/NT rail connection discussion in another thread, could these cattle trains create new freight flows for the producers who currently feed the live export trade (or other NT producers too)?  Lower freight costs could reduce the cost barrier and mean that NT cattle could come into Qld (for either feed lotting or slaughter).  Id think it would be a long shot, given that cattle couldn't be on rail for long, though they do get road freighted for longish periods.  As always - thoughts?

Refer to this press too.

http://www.abc.net.au/news/2015-11-26/jbs-early-closures-stuart/6976600

Im not sure how close the plant is to rail - i can't find it on google maps either.
  bevans Site Admin

Location: Melbourne, Australia
If I were a chinese controlled port in Darwin I would be trying to attract business to the NT ports.  Rail is a good way to do that.
  RTT_Rules Dr Beeching

Location: Dubai UAE
If there is that much cattle in the NT, would it not be easier to build a meat works in Darwin and simply rail/truck the animals and then export from there or for domestic rail haul back to the SE corner where the consumption more than likely exceeds local production.

As for live exports, personally I would prefer this to be wound back to zero over the next decade if not sooner either by choice or via legislation. The meat industry has enough issues domestically ensuring our food is brought to a respectful and quick death. Off-shoring this to places with animal rights abuses is the same as off-shoring pollution and child labour.

On the commerical haulage of railed cattle to Oakey, this is an excellent outcome and helps prove rail can be competitve. Thanks for the info on this. For NSW meat works, if it works it works, but not holding my breath. If the Inland gets up, who knows.
  Sulla1 Chief Commissioner

A reasonable amount of the cattle moving through the railheads at Cloncurry and Winton can originate in the Northern Territory...but these flows are largely reliant on the export and domestic prices to determine which direction the cattle go.
  Sulla1 Chief Commissioner

If there is that much cattle in the NT, would it not be easier to build a meat works in Darwin and simply rail/truck the animals and then export from there or for domestic rail haul back to the SE corner where the consumption more than likely exceeds local production.

As for live exports, personally I would prefer this to be wound back to zero over the next decade if not sooner either by choice or via legislation. The meat industry has enough issues domestically ensuring our food is brought to a respectful and quick death. Off-shoring this to places with animal rights abuses is the same as off-shoring pollution and child labour.

On the commerical haulage of railed cattle to Oakey, this is an excellent outcome and helps prove rail can be competitve. Thanks for the info on this. For NSW meat works, if it works it works, but not holding my breath. If the Inland gets up, who knows.
RTT_Rules
AACo opened a 1000 head per day export meatworks outside Darwin in February 2015...I don't know if it's near the Darwin Railway, but I dare say rail wasn't considered at the time it was designed and built. Looking at the numbers, the Northern Territory has an annual cattle production rate of 600,000 (about half of these are exported and the remainder sold domestically) and Queensland produces 3.5-million (of which 336,000 were exported last year - 250,000 through the Townsville Port and the rest through Darwin).
  james.au Chief Commissioner

Location: Sydney, NSW
@RTT_Rules - I agree that an abattoir in this region would be a sign that this was the case, though it seems that there is excess capacity in abattoirs already in Qld and that they are looking for slaughter weight cattle, some of which are going to market.  There would be a whole lot of economic factors at play here, which may get somewhat complex to navigate!

@Sulla1 - if freight prices are lowered, say through rail, this may tip more beef back into the domestic market no?
  james.au Chief Commissioner

Location: Sydney, NSW
Looks like they are close to the rail line - assuming I've got my locations right.

  Trainplanner Chief Commissioner

Location: Along the Line
Thanks for the updates Sulla1 and company.   An interesting story.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Thats pretty close to the railway!
  james.au Chief Commissioner

Location: Sydney, NSW
Re JBS Stuart, they're not far from rail either (they appear to be the complex just across the road from the power station.  Though they'd have some challenge getting the cattle over the Bruce.

  Sulla1 Chief Commissioner

JBS used the Julago Spelling Yards (scroll a little to the right to see the spelling yard branch). Cattle were walked the short distance to the meatworks. The spelling yards are still used by Aurizon for the legally required 24-hour rest cattle need between arriving from the Mt Isa line and heading south on the North Coast Line. As far as I know JBS hasn't had railed delivery for several years.
  james.au Chief Commissioner

Location: Sydney, NSW
Are they the ones on Lowe Road?

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