Railway transport costs are often higher than average in Australia, according to a new study.
Railway transport costs, which are used to fund the bulk of Australia’s rail transport, are estimated to be about $2,000 per passenger kilometre, compared with about $600 for the national average.
The cost of milk transport is also higher, at $1,500 per kilometre.
“If you are planning on buying a new or used milk tank and you are looking to travel on an Aussie railway, the cost is a lot higher than the national averages,” says Peter Lillis, a rail transport analyst at the Australian Tax Office.
Lillis says there is a good reason why this difference is so significant.
“[The average Australian’s] average milk transport cost is $2.99 per kilogram, which is about $200 more than the average cost of transporting the equivalent amount of milk from Australia to New Zealand,” he says.
But Mr Lilles says the difference is partly a function of the cost of freight.
In New Zealand, the average freight charge is $1.50 per kilo.
Australian milk transport charges are higher than New Zealand’s but the difference between them is only about $100.
Mr Lillises study suggests the difference in the cost per kilometer is driven by the fact that some Australian milk is shipped via the Pacific, while the majority of milk in New Zealand is shipped by the Atlantic.
There are three major shipping routes that pass through New Zealand.
It’s also the country’s main source of milk, with an estimated 70 per cent of milk produced on farms in New Zealand.
At the moment, the price of milk exported to New Zellas farm farms is the same as that of Australian milk, at about $6.30 per kilos per litre.
But that may change in the future.
New Zealand dairy farmers have been pushing for the price to be lowered.
They say they need to be able to pay more to get the milk they produce.