Aurizon will operate CBH Group’s rail service for the next six years, after the co-operative decided to end its contract with its current provider Watco Companies early.
Aurizon will operate CBH Group’s rail service for the next six years, after the co-operative decided to end its contract with its current provider Watco Companies early.
ASX-listed freight operator Aurizon has proposed an operating model that includes an additional three fleets on top of CBH Group’s existing ten, access to maintenance and operational facilities at Forrestfield, Narngulu, Merredin, Albany and Wagin, and an investment in Avon’s maintenance facility and yards to bring them back into operation.
Aurizon will be responsible for rail logistics planning services including train scheduling, tracking, maintenance, inventory control and crew management.
The agreement is for six years with two 2-year options to extend if Aurizon meets its contract KPIs.
Watco’s contract with CBH Group was due to expire in April 2022 after ten years, but both parties agreed to cut it short before the coming harvest.
Watco and Aurizon will begin a three-month transition period later this month.
CBH Group acting chief executive Ben Macnamara said the new rail service agreement was a high-capability model which delivered the best value for the co-operative and its growers.
“Aurizon presents the most effective and efficient model of maintenance, scheduling, and execution of rail services to meet the needs of the growing Western Australian crop,” Mr Macnamara said.
He told reporters this morning he could not reveal the dollar value of the contract because of commercial confidence but said the new contract was worth more than the previous one.
Mr Macnamara said the co-operative decided to end Watco's contract early to minimise the impact on its supply chain and allow for a smooth transition before harvest.
"We bought that forward because in the discussions and deliberations with Watco we thought it was right to do that before harvest as opposed to in the peak shipping months," he said.
Aurizon Bulk group executive Clay MacDonald said the company’s investment in additional trains and upgraded facilities would allow it to boost rail capacity for Western Australian grain growers, while maintaining safe and reliable services.
Aurizon general manager iron ore and central west Anna Dartnell said the company was engaged earlier this year to provide additional capacity for rail haulage during the most recent harvest.
“We are committed to safe, reliable and efficient operations for our customers and we are delighted that our performance has been now recognised with this long-term contract with a highly-valued customer,” Ms Dartnell said.
In April 2021, CBH opened a Request for Proposal Process for its above-rail operations where it invited several rail companies, including Watco, to submit proposals.
About 60 per cent of CBH Group’s grain travels to the port by rail.
The co-operative invested in its own fleet in 2011.
