Soaring freight costs engulfing flood-hit Kimberley region

Businesses in Western Australia’s remote Kimberley Region fear they could be engulfed in an economic crisis with soaring freight prices in the region.

Red Range Stock Supplements co-owner Sophie Cooke, with sons Ben and Tom, in the east Kimberley town of Kununurra, Western Australia. Picture: Nathan Dyer

Businesses in Western Australia’s remote Kimberley Region fear they could be engulfed in an economic crisis in the months ahead, with soaring freight prices in the region prompting increasingly desperate calls for government help.

The cost of shipping goods to the region has almost doubled since last month’s record-breaking flooding, which knocked out the key bridge on the only arterial link between the eastern and western parts of the region.

While the WA government began subsidising the freight cost of goods deemed to be essential, a wide range of products needed by businesses across the region have not qualified for that assistance.

The Kimberley’s economy relies heavily on agriculture and tourism, both of which are being severely hampered by the flood damage, and some business owners worry that their businesses simply may not be able to survive a prolonged period of higher transport costs.

The Fitzroy River bridge at Fitzroy Crossing. Picture: Andrea Meyers

East Kimberley Chamber of Commerce and Industry chief executive Clare Smith said freight costs had doubled and in some cases tripled since the floods, while some freight operators had stopped servicing the region altogether.

“It’s looking pretty dire,” she said.

She said farmers in the region were grappling with how to approach their upcoming growing season, given the uncertainty about whether they will be able to afford to get their crop to market.

The Kimberley’s remoteness made it one of the most costly places to live even before the floods. Ms Smith said she was worried the increased costs would add further economic pressure at a time when people could least afford it.

“We really need some support from the government because businesses will either go under, stop operating, or they will just pass on the cost to the consumer, which is going to increase the cost of living here higher than it already is,” she said.

The infrastructure disruptions mean trucks heading from Perth to the East Kimberley now need to head to the region via South Australia and the Northern Territory, adding more than 3000km to each one-way journey. That is more than the driving distance from Melbourne to Cairns.

Rebuilding the bridge could take years, although there are hopes that a low-level crossing capable of handling heavy haulage may be in place within months.

Russell Cooke and his wife Sophie run three businesses out of the East Kimberley town of Kununurra, all of which are suffering as a result of the freight disruptions.

Between them, the businesses – which employ dozens of staff – are responsible for the shipping of tens of thousands of tonnes of materials and thousands of head of cattle across the Kimberley each year but now find themselves isolated from both suppliers and customers as a result of the flood damage to the bridge at Fitzroy Crossing.

The family’s freight bill runs into the millions of dollars each year, meaning they could be millions of dollars out of pocket if current freight costs persist and no government assistance is forthcoming before the low-level crossing is in place.

The aftermath of the Kimberley flooding at Fitzroy Crossing, Western Australia. Aerial imagery: Nearmap

One of the Cooke family’s businesses, Red Range Stock Supplements, supplies specialist feed to cattle stations across the Kimberley and Pilbara. Around half of the ingredients in the supplements are shipped in from suppliers that are on the other side of the Fitzroy River.

In one instance, to help a customer in the Pilbara, Red Range has now resorted to sending materials from Kununurra into WA’s southwest and mixed them manually with other materials there to make a supplement which will then be shipped up to the Pilbara. The cost of the exercise, Mr Cooke says, is “astronomical” and unsustainable but he doesn’t want to let his customers down.

The Cookes also have a contract to supply cattle to the Kimberley Meat Co’s processing facility near Derby, while around three quarters of the customers for the family’s turf business are between Broome and Port Hedland. The damaged bridge means all those customers are effectively unreachable.

Mr Cooke says that while the government is rightfully focused on getting the most essential items into the region first, businesses such as his will not be able to cope without some sort of assistance.

“I’m really hoping that the government can help us because without some assistance to put us on an equal playing field, it will put us out of the competition,” he said.

Broome-based Liberal upper house MP Neil Thomson says it is clear that the government’s freight subsidies need to be broadened.

He said the Kimberley already had many economic challenges even before the flood, making it more important to help those businesses currently struggling.

“There is a need for a broadbased freight subsidy to cover the additional costs,” he said.

“Otherwise you will see businesses go to the wall and a decline in industries that are sorely needed.”

A WA government spokeswoman said addressing the significant increase in freight costs was a “priority issue”.

“We are working across industry and government to identify options to mitigate freight costs to ensure supply chain and business continuity,” she said. Main Roads, she said, was working as quickly as possible to put in temporary solutions to reconnect roads and open up supply routes.