Direct links key to cutting Pilbara freight costs

Pilbara businesses could halve their transportation costs, save time and be more competitive if more direct freight links were established in the region, according to two complementary reports released last week.

In separate but related studies, the City of Karratha and the Pilbara Development Commission examined why better freight links were needed in the region and how they could be established, with a focus on direct maritime and air links to Asia.

The City’s study into freight by sea, air and road, especially to Asia, found if a direct freight service was established, freight costs for businesses could be reduced by up to 50 per cent and delivery times shortened by up to 70 per cent.

It also noted up to 90 per cent of freight entering the Pilbara came via Perth or even the Eastern States, travelling up to 8000km — about the width of Russia — further than it needed to.

The PDC study, which focused on maritime freight, found a direct service could boost the Pilbara’s gross regional product by 1.14 per cent, or $120 million a year — adding up to $693 million by 2030 — and create about 30 new jobs in the region.

It concluded reducing freight costs for local businesses would allow them to become more competitive, promote new jobs and business activity, and encourage investment in the region.

Australian Floating Decks director Paul Toussaint-Jackson, who compiled the City study, said establishing more direct freight links, especially to Asia, should be a priority.

“It makes sense in the 21st century for a connected community to not only have good internet connections but also the shortest practical supply chain to both its supplier and export markets, and in a region that’s so remote, it is especially important — it’s fundamental,” he said.

Mayor Peter Long said he hoped the studies’ findings would lead to real change.

“The Pilbara is completely reliant on imported goods of every kind to support industry and community life — whether it is a toothbrush or a mining truck,” he said.

“Each year, more than 6.5 million tonnes of freight flows in and out of the Pilbara, which is carried over great distances because of our remote location.”

“The establishment of direct freight links would significantly reduce costs for Pilbara-based businesses as well as create additional opportunities for new businesses to establish, particularly those with export potential.”

Regional Development Minister Alannah MacTiernan said the Government’s next step would be to explore whether the market supported the push for better freight services. “These two studies show there could be significant regional economic savings and opportunities if a direct maritime freight service to the Pilbara was established,” she said.

“The next step is to establish if there is appetite to both sell and buy maritime freight services into the Pilbara.”

PDC acting chief executive Trish Barron said given the “compelling case” presented by both reports, the PDC would now undertake a further study to investigate how potential new industries and businesses could be helped by the reduced costs more direct freight could bring.