Aurizon prepares to sell its Intermodal Division

 
  Sulla1 Chief Commissioner

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  james.au Chief Commissioner

Location: Sydney, NSW
Good - im glad to see this will be scrutinised in this way.
  x31 Chief Commissioner

Location: gallifrey
Good - im glad to see this will be scrutinised in this way.
james.au

What now will transpire?  Does the deal need to change to get through or will the deal fall over entirely?
  BrentonGolding Chief Commissioner

Location: Maldon Junction
Good - im glad to see this will be scrutinised in this way.

What now will transpire?  Does the deal need to change to get through or will the deal fall over entirely?
x31
If Aurizon goes ahead and closes the operation anyway as it is threatening to do then this will be a classic example of the ACCC cutting off it's nose to spite it's face. Or more precisely cutting off Aurizon's nose to spite it's face.

If Aurizon quits the market the result will be pretty much the same and Aurizon will lose a bunch of $$$

BG
  james.au Chief Commissioner

Location: Sydney, NSW
Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
  a6et Minister for Railways

Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
james.au
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
  james.au Chief Commissioner

Location: Sydney, NSW
Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
a6et
I have no idea what revenue/profit levels are.  @Sulla1 might have some figures though.

There were 3 elements to the Aurizion transaction
1. Close down SG Interstate Freighter network (done)
2. Sell Acacia Ridge to PN (on hold ACCC)
3. Sell NG Intrastate Freighter network to PN (on hold ACCC)

2 and 3 are the current issues.

I did think GWA but theyre definitely after SCT and QUBE IMO.
  BrentonGolding Chief Commissioner

Location: Maldon Junction
As discussed previously SCT highly unlikely to be interested in Acacia Ridge due to having it's own facility at Bromelton

BG
  x31 Chief Commissioner

Location: gallifrey
As discussed previously SCT highly unlikely to be interested in Acacia Ridge due to having it's own facility at Bromelton

BG
BrentonGolding

Why not make the terminal open access handing it back to Queensland Rail?

Would GWA be interested in the intermodal business?
  Dangersdan707 Chief Commissioner

Location: On a Thing with Internet
it was always bound to have The ACCC pissed off.
  james.au Chief Commissioner

Location: Sydney, NSW
As discussed previously SCT highly unlikely to be interested in Acacia Ridge due to having it's own facility at Bromelton

BG
BrentonGolding
Agreed - but the intermodal business may be a different story.
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
a6et
Where is Karagu, please - obviously new since my day?
  a6et Minister for Railways

As discussed previously SCT highly unlikely to be interested in Acacia Ridge due to having it's own facility at Bromelton

BG
BrentonGolding
That was my point when I mentioned the prospect of their intermodal terminal, (put the wrong name in) as the track is dual gauge from there.

It could give them an in for Qld NC line traffic from Vic and the other states. Its possible that with a direct NC transition at Bromelton to NQ, that they could run trains to Parkes and rather than truck from there, with enough traffic, could put a train through to Bromelton.
  a6et Minister for Railways

Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
Where is Karagu, please - obviously new since my day?
YM-Mundrabilla
I looked up the site on Google earth, tracking the railway line, and that location came up as being near the SCT Hub. I had forgotten it was Bromelton and that was the location that came up.

Actually I just realised that I also spelt the place name wrongly it should have been Kagaru.

Apologies all round
  fzr560 Chief Train Controller

Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
Where is Karagu, please - obviously new since my day?
I looked up the site on Google earth, tracking the railway line, and that location came up as being near the SCT Hub. I had forgotten it was Bromelton and that was the location that came up.

Actually I just realised that I also spelt the place name wrongly it should have been Kagaru.

Apologies all round
a6et
Are you sure there is NG access to SCT-Bromelton?
  Sulla1 Chief Commissioner

Okely dokely...

Acacia Ridge is currently owned by Aurizon, but managed by P&O to maintain its open access operations. Acacia Ridge is the only dual gauge intermodal terminal in Queensland. PN now operates the only standard gauge freight services to this yard, however all of its narrow gauge operations run out of PN's own Moolabin yard a few kilometres to the north, with road transfers used for transhipments. Acacia Ridge is Aurizon's primary narrow gauge intermodal yard in Brisbane although the Sea Freighters from Mackay and Rockhampton bypass it and run to Fishermans Island.

PN gets ownership of the yard if the ACCC approves the sale. It's current open access status will probably be a condition of the sale.

All of the Aurizon intermodal services run on QR's North Coast Line. Aurizon does not own the North Coast Line  (apart from around 120km in its coal network). Aurizon Intermodal handles around 1.5-million tonnes between Brisbane, Rockhampton, Mackay, Townsville and Cairns. Aurizon owns yards and terminals in Bundaberg (closed and removed), Rockhampton, Mackay, Merinda, Ayr (closed), Stuart (opened in December 2016), Innisfail and Portsmith. Most of these terminals are reportedly included in the sale to PN, although it has terminals in most of these locations already.

Other Aurizon container services on the Central and Mt Isa lines are operated by Aurizon's Bulk Division and will continue to operate under that division, although what container terminals they will use isn't clear...agreed access may be part of the PN sale. Bulk is also reponsible for cattle, grain and infrastructure trains running on the North Coast Line and these will also stay with Bulk.
  justapassenger Chief Commissioner

The narrow gauge only goes as far as Bromelton crossing loop, a few kilometres short of the SCT terminal. It would be a fairly small task to bridge that last little gap if it ever became necessary.

It probably won't, SCT are succeeding because they have worked out how to cherry-pick the business they want and leave the rest to be fought over by the trucking industry and the ex-government rail operators.
  Jack Le Lievre Chief Train Controller

Location: Moolap Station, Vic
Aurizon have already closed down the operation on the SG network so that horse has bolted - thouhg SCT is there to pick up the traffic.

I suspect that if the PN sale is disallowed, Aurizon might have to shop it around a bit more and even lower the price to attract the attentions of, say, SCT.  I think this would be the best outcome.  QUBE is another possibility and given they already have pretty big trucking operations in that area, might also make for a decent alternative.
What is the revenue and profit level on the NG traffic?  I may have missed something but does the sale just mean for the North Coast line to Cairns or does it include the other freight traffic on other lines?

While its likely a very good opening for the likes of perhaps Qube or SCT, would GWA be interested in it?

If SCT were interested and put a play for it, given the line at Karagu is dual gauge it could make it easy for SCT to have a rail transhipping facility there for traffic to the North.  
Other question is does Aurizon own any such yards that are dual gauge facilities that could allow for transhipping for NC traffic?
Where is Karagu, please - obviously new since my day?
I looked up the site on Google earth, tracking the railway line, and that location came up as being near the SCT Hub. I had forgotten it was Bromelton and that was the location that came up.

Actually I just realised that I also spelt the place name wrongly it should have been Kagaru.

Apologies all round
Are you sure there is NG access to SCT-Bromelton?
fzr560
Narp, the Dual Gauge only runs as far as Bromelton Loop 6km North of SCT, Bromelton.

http://www.sa-trackandsignal.net/Pdf%20files/ARTC/AR343.pdf
  neillfarmer Chief Train Controller

Kagaru was a crossing loop between Greenbank and Bromelton. It had been there for a very long time but was retired when the CCT and loop extensions were built. The narrow gauge line south within the SG line is not complete, I think there is a couple of turnouts to install at Greenbank?
Aurizon have repeatedly said they will walk away from the Qld intermodal if the ACCC does not approve the sale.
I think the ACCC are in error here, the market is the freight task between SEQ and NQ. The competitors are road transport and PN. Plenty of competition.


Neill Farmer.
  james.au Chief Commissioner

Location: Sydney, NSW
Aurizon have repeatedly said they will walk away from the Qld intermodal if the ACCC does not approve the sale.
I think the ACCC are in error here, the market is the freight task between SEQ and NQ. The competitors are road transport and PN. Plenty of competition.


Neill Farmer.
neillfarmer

The ACCC are not in error for doing their job and investigating potentially anticompetitive behaviours.

From the AFR article provided by @Sulla1:

Australian Competition and Consumer Commission chairman Rod Sims told The Australian Financial Review it would examine whether any "understandings" were reached between Aurizon and Pacific National over the shutting down of Aurizon's interstate intermodal business.
---
"Of course your nearest competitor pays you the highest price, but that's not a competitive outcome," he said. "We've had a lot of complaints from companies saying this means the price they pay for rail will go up and that road does not provide an effective substitute."
Australian Financial Reveiw

It is in PN's interest to buy their competition and to create a monopoly they may pay the highest price, not because the underlying business is worth that value, but buying it to create a monopoly is.  If they are disallowed from purchasing, and Aurizon has to sell to others at a different price, this price might better reflect the asset value as a standalone business.  But if potential buyers were locked out of that (eg SCT, QUBE) because PN offered a higher price from the get go, then that is anticompetitive.  

A potential result of this ACCC investigation is that the sale of intermodal is disallowed and another operator buys it - keeping the competition on the track.  If it is QUBE, id suspect their road haul would end up on rail, strengthening the rail market....
  Sulla1 Chief Commissioner

The issue is Aurizon has committed to shutting down the Intermodal Division if the sale doesn't go through. The ACCC won't be able to stop a shut down or the divestment of surplus rollingstock. The immediate impact of a closure will be almost all of Aurizon's freight going to road as PN won't have sufficient rollingstock to pick up the surplus without access to additional equipment (Aurizon's). The ACCC may be right to question the sale, but if it prevents the sale the road industry will win and PN may take years to regain the lost volume...if ever.
  james.au Chief Commissioner

Location: Sydney, NSW
The issue is Aurizon has committed to shutting down the Intermodal Division if the sale doesn't go through. The ACCC won't be able to stop a shut down or the divestment of surplus rollingstock. The immediate impact of a closure will be almost all of Aurizon's freight going to road as PN won't have sufficient rollingstock to pick up the surplus without access to additional equipment (Aurizon's). The ACCC may be right to question the sale, but if it prevents the sale the road industry will win and PN may take years to regain the lost volume...if ever.
Sulla1
Thats what they've said they'd do, but that would perhaps take longer and cost more than if they accepted a lower price from another operator....

I think it is useful for the ACCC to test this threat - as that is what it is - and call the bluff of Aurizon management.

I wouldn't be surprised to see other operators than PN look to buy the surplus rolling stock too if Aurizon does go through with this threat.
  Sulla1 Chief Commissioner

As long as Andew Harding remains CEO of Aurizon the threst of closure will not be a bluff...the closure will happen and the losses will be recovered through individual real estate and equipment sales.
  bevans Site Admin

Location: Melbourne, Australia
Qube could also come in and take some of the freight from road if it goes that way.  What is wrong with this Andrew Harding guy?

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