Freight news: CBH unveils plans to spend $400 million on new locomotives and wagons to ‘get grain to port’

CBH’s history-making investment into hundreds of locomotives and wagons is solely about “getting more grain to port” and will ultimately lead to less trucks on the road as the State’s harvest swells to 30 million tonnes, the co-operative’s boss says.

The farmer-owned business last week announced it would spend “upwards of” $400 million buying 17 narrow-gauge locomotives, and 200 standard-gauge and 450 narrow-gauge grain hopper wagons — with all set to be in WA by June 2026.

The narrow-gauge locomotives will be acquired from US-based freight Wabtec Corporation, while the 200 standard gauge and 450 narrow gauge wagons will be purchased from Chinese manufacturer CRRC Meishan.

In September last year, CBH launched a competitive request for proposal with “multiple train companies” to buy new locomotives and wagons to bolster its existing fleet.

Three months later, it announced it would buy seven new locomotives from global train-building company Progress Rail.

CBH chief executive Ben Macnamara labelled the latest purchases one of the “most significant things the co-operative has done” in its 90 year history and said they formed part of CBH’s Path to 2033 strategy.

The strategy is focused on increasing CBH’s monthly export capacity to reach a peak of 3 million tonnes by 2033, or sooner.

The move will more than double the amount rain trail rolling stock and nearly double its diesel-electric locomotive fleet as it eyes being able to receive crops of up to 30Mt — well above the current 21.7Mt record — by 2030.

HISTORICAL INVESTMENT

The announcement marks CBH’s biggest investment in grain on rail since 2010, when it made the bold move to enter the rolling stock space at a time when WA’s average grain crop was just 10Mt.

CBH invested $175 million in its inaugural fleet of 22 locomotives and 574 wagons in 2010, with the first load of grain on a CBH train rolling out of Merredin two years later on April 2012.

For the time being, the new locomotives and wagons will add to CBH’s existing fleet.

Mr Macnamara said the existing fleet would need to “be replenished” in the future, but was unable to say when this would occur.

Wabtec, a leading global provider of equipment, systems and digital solutions for the freight and transit rail sectors, will build 17 CM20ACi dual-cab, diesel-electric locomotives for CBH.

FUNDING THE PURCHASES

Mr Macnamara said the move would cost well in excess of $400 million and the money would come from CBH’s freight fund and by “leveraging” its balance sheet.

Record grain harvests and strong grain prices meant the co-operative posted its biggest annual profit of $497 million last year.

That cash will be split across buying the 17 narrow gauge locomotives, 650 wagons and the already-contracted seven standard locomotives CBH ordered from global train-builder Progress Rail late last year.

BIGGER CROPS

Mr Macnamara said crops of more than 20Mt were expected to become the norm in coming years, with an average 22 million tonne annual crop by 2033, and peak crop sizes of 30Mt.

CBH’s Path to 2033 Strategy is focused on incrementally increasing the co-operative’s monthly export capacity over three-time horizons to reach a peak of 3 million tonnes by 2033, or sooner.

The delivery of the Strategy is aligned with the objective of being able to safely receive an average 22 million tonne crop by 2033 and outturn 70 per cent of this in the first half of the shipping window.

CBH has come under fire in recent years after two record harvests in a row presented significant logistical challenges, resulting in the co-operative paying millions of dollars in demurrage fees due to delays to ship loadings.

It received more than 21Mt of grain last harvest, the biggest in its 90-year history.

CBH expects average crops to be about 22Mt by 2033, with peaks of up to 30Mt.

“Expanding our wagon rolling stock, in conjunction with the expansion of our standard-gauge and narrow-gauge locomotive fleets, is a significant step to improve our outloading capability,” Mr Macnamara said.

“By investing in our supply chain network, we are ensuring we can deliver tonnes to customers when needed and therefore return sustained value to Western Australian growers.”

JUST IN TIME

All of the new locomotives and wagons are expected to be in action in WA by June 2026, with Progress Rail’s seven standard locomotives expected to arrive by November 2024.

Five of Wabtec Corporation’s narrow-gauge locomotives will be in WA by March 2026, with the remaining 12 by June 2026.

The sheer size of CBH’s order with CRRC Meisham — for 200 standard gauge and 450 narrow gauge grain wagons — means its delivery will be staged in seven tranches with the first to arrive between September 2024. The rest are expected to arrive by June 2025.

The fleet’s standard gauge fleet is able to use about a third of WA’s freight rail network – most of which operates with a 23 or 24-tonne axle load.

The remainder, about 2500km, is narrow gauge with a mix of 16, 19 and 21-tonne axle load.

WHERE THEY’RE COMING FROM

Mr Macnamara said both companies were world leaders and the xxx

Wabtec, a leading global provider of equipment, systems and digital solutions for the freight and transit rail sectors, will build 17 CM20ACi dual-cab, diesel-electric locomotives for CBH.

Mr Macnamara said the acquisition would boost CBH’s narrow gauge locomotive fleet to 37.

“Expanding our narrow-gauge locomotive fleet, in conjunction with the expansion of our standard-gauge locomotive fleet, is a significant step to enhance our outloading capability,” he said.

Wabtec freight equipment president Rogerio Mendonca said the CM20ACi was the “perfect addition to CBH’s growing fleet”.

“These locomotives will provide CBH with low operational costs, high availability and proven

reliability needed to succeed in today’s competitive market.

CRRC Meishan is one of China’s leading manufacturers of quality rail equipment, specialising in the building and distribution of rail cars and grain hopper wagons worldwide.

“We are pleased to partner with CRRC Meishan, which is recognised internationally as a global leader in the design, manufacture and supply of quality grain hopper wagons,” Mr Macnamara said.

“Expanding our wagon rolling stock, in conjunction with the expansion of our standard-gauge and narrow-gauge locomotive fleets, is a significant step to improve our outloading capability.”

CRRC Meishan board chair Pan Shuping said the new hopper wagons would incorporate “innovative designs to allow low wagon tare weight and quick discharge rate”.

“CRRC Meishan is committed to working with CBH to bring reliable products for highly efficient operations.”

WHAT’S ON ORDER

• 17 narrow-gauge locomotives from Wabtec Corporation: Five to arrive by March 2026, remaining 12 to arrive by June 2026
• Seven standard locomotives from Progress Rail: Set to arrive by November 2024
• 200 standard gauge and 450 narrow gauge grain hopper wagons from CRRC Meishan: Seven tranches of wagons to arrive between September 2024 and June 2025