Agricultural transport costs are high
In Australia, transport infrastructure is essential for moving more than 100 million tonnes of agricultural and forest product output annually, with transport distances often over 1000km between production and markets. Infrastructure investment and regulatory changes can substantially reduce logistics costs between agricultural enterprises. Understanding what investment and regulatory changes mean to supply chain flows and transport costs across all enterprises is critical to getting the best value from investment options available.
Modelling the most cost-effective transport options
With the support of industry as well as the Australian and state/territory governments, we commenced development of the Transport Network Strategic Investment Tool (TraNSIT) in 2012. Our researchers have used the tool to provide the most detailed map of routes and costings across Australia's entire agricultural and forestry supply chain.
TraNSIT maps millions of vehicle trips across thousands of supply chains between production and domestic and export markets. For each supply chain path, it selects the least-cost travel path as well as vehicle configuration, accommodating road conditions, driver fatigue regulations and vehicle decoupling costs. It outputs information on freight paths, detailed transport costs and critical link analysis, providing valuable input to inform infrastructure investment and regulatory decisions. By highlighting key areas where infrastructure investment would be most beneficial, the tool in turn helps reduce travel distance and time, saves fuel costs, cuts down on wear and tear to vehicles and produce, and minimises stress for both truck drivers and livestock.
The TraNSIT tool was originally applied to the beef industry before being extended to 98 per cent of all agriculture transport across Australia through an initiative in the Agricultural Competitiveness White Paper (released in 2015). More recently it has been extended to include fuels, forestry, mining, manufacturing and general freight. It has also been applied to freight transport on the proposed Melbourne to Brisbane Inland Rail project.
The tool's application has been extended beyond Australia, to Indonesia and Vietnam, where it is being used to assess transport costs in local and national food supply chains, through Department of Foreign Affairs and Trade (DFAT) and Australian Centre for International Agricultural Research (ACIAR) funded projects.
The tool currently accommodates over 150 commodities representing more than 25 million vehicle and 200,000 rail trips per annum. Development is ongoing and further commodities and modes of transport are continually being incorporated.
Applications of TraNSIT include:
- Analysing the impact of road upgrades such as sealing, first/last mile improvements, access to higher-productivity vehicles
- Informing improvements to rail infrastructure including line upgrades, new freight hubs and integration with road transport
- Testing the sensitivity of the road and rail network to natural disasters or other disruptions and their impact on freight access to markets
- Optimising supply chains in the private sector
- Forecasting freight volumes, supply chain dynamics and bottlenecks under future production and climate scenarios
- Testing regulatory changes such as driver fatigue, road and rail pricing and tolls
- Comparing infrastructure investment options that maximise transport cost reductions.
TraNSIT has been used to improve infrastructure in the following ways:
- Informed 60 road upgrade submissions for the Northern Australia Beef Roads Fund
- Informed the $3.5 billion Roads of Strategic Importance program
- Assisted the planning of 'future freight' at a regional scale for different locations across Australia
- Identified capacity constraints to air freight for horticulture in Australia
- Addressed supply chain inefficiencies and cross border bottlenecks in Indonesia and Vietnam
- Estimated average transport reduction costs of $76 per tonne for shifting transport of east coast agriculture from road to rail, or $31 per tonne to shift from coastal rail to inland rail
- Estimated transport cost (plantation to processing or port) of $23 billion for 800 million cubic metres over 25 years, for all Australia's plantation forestry
- Determined cost reductions of up to $10 per tonne in grain transport in NSW from upgrades to intermodal freight facilities combined with road upgrades, rail track upgrades and new train combinations
- Provided input into regional freight and supply chain plans across Australia
- Provided a new capacity to estimate the impact of road improvements for the Australian tourism industry
- 'Transit Web' provides government and industry with the capacity to test infrastructure and regulatory scenarios
- The Supply Chain Benchmarking Dashboard. This is an interactive web tool that provides industry and governments with a shared picture of supply chain performance for evaluation and identification of potential areas for action or collaboration. The tool is a key Commonwealth action under the National Freight and Supply Chain Strategy.
Related to this page
- Better roads for beef transport in northern Australia
- Boosting Australia's freight and supply chain performance
- Dr Andrew Higgins
- National Freight and Supply Chain benchmarking project
- TraNSIT report: Unlocking options for efficient logistics infrastructure in Australian agriculture
- TraNSIT report: Modelling the supply chain of Australia’s plantation forestry
- TraNSIT web report: An easy and flexible way of using the TraNSIT outputs