Aurizon prepares to sell its Intermodal Division

 
  BrentonGolding Chief Commissioner

Location: Maldon Junction
My concern would be the propensity of Linfox Management to move the rail based carriage to truck in line with their current business practices?
I wouldn't worry too much about that. Linfox Intermodal is the old FCL Transport. It provides a carriage service to other Linfox divisions and sends as much by rail as it can. Divisions such as FMCG (Fast Moving Consumer Goods) still send B-Dubs interstate. Arnotts in Huntingwood NSW is a good example of this. It's really up to each division President to maximise his/her division's profitability. Intermodal is run by Ian Strachan and he's a good operator, I've worked with him. Can't say the same about the insipid CEO Mark Mazurek though. If Ian get's the support from the Board, you should see a fair bit of rail action.

Edit: The Linfox Board has also mandated significant and on-going reductions in carbon emissions. Rail is part of that strategy.
ParkesHub
Indeed and to quote the AFR article "Linfox said the acquisition would increase the scale and scope of its services throughout Queensland and "strategically position" it for the future growth of the proposed inland rail line"

Doesn't sound like a move from Rail to road to me, sounds more like re-positioning for the future.

BG

Sponsored advertisement

  a6et Minister for Railways

I think that this is a great outcome considering the alternatives (closure or near monopoly).

Would this have happened without ACCC action? Probably not.

While the ACCC are from perfect, at least they are effective. Watching the Banking Royal commission, ASIC and other financial regulators, they need to lead and be an effective regulator. They do need to use the BIG stick sometimes. ACCC are not afraid to take on the big end of town and their silks to create change.

While the deal with Linfox could have some negative effects too, but at least it gives transport customers choice. A great outcome.

My concern would be the propensity of Linfox Management to move the rail based carriage to truck in line with their current business practices?
I wouldn't worry too much about that. Linfox Intermodal is the old FCL Transport. It provides a carriage service to other Linfox divisions and sends as much by rail as it can. Divisions such as FMCG (Fast Moving Consumer Goods) still send B-Dubs interstate. Arnotts in Huntingwood NSW is a good example of this. It's really up to each division President to maximise his/her division's profitability. Intermodal is run by Ian Strachan and he's a good operator, I've worked with him. Can't say the same about the insipid CEO Mark Mazurek though. If Ian get's the support from the Board, you should see a fair bit of rail action.

Edit: The Linfox Board has also mandated significant and on-going reductions in carbon emissions. Rail is part of that strategy.
ParkesHub
Its a sad memory I know when you mention the Arnott's factory at Huntingwood, a move they had to make out of Nth Strathfield, I can remember the amount of vans, and not just the 4 wheelers that were sent out of there 5 days a week to various country areas, a joining up again with rail would be good, there is a proposal but a while away yet for a new bulk goods terminal in the Erskine Park area when the new line from St Mary's goes ahead, few years away but if Linfox are eager to capture a lot back to rail who knows what can happen.

But, I wont hold my breath on that aspect of recapturing traffic though.
  freightgate Minister for Railways

Location: Albury, New South Wales
Linfox are a trucking company and they will put freight on the cheapest route. Expect some to go to road. Keen to understand how much Linfox traffic on rail into Brisbane from the south can be sent further north on rail ?
  ParkesHub Chief Commissioner

I think that this is a great outcome considering the alternatives (closure or near monopoly).

Would this have happened without ACCC action? Probably not.

While the ACCC are from perfect, at least they are effective. Watching the Banking Royal commission, ASIC and other financial regulators, they need to lead and be an effective regulator. They do need to use the BIG stick sometimes. ACCC are not afraid to take on the big end of town and their silks to create change.

While the deal with Linfox could have some negative effects too, but at least it gives transport customers choice. A great outcome.

My concern would be the propensity of Linfox Management to move the rail based carriage to truck in line with their current business practices?
I wouldn't worry too much about that. Linfox Intermodal is the old FCL Transport. It provides a carriage service to other Linfox divisions and sends as much by rail as it can. Divisions such as FMCG (Fast Moving Consumer Goods) still send B-Dubs interstate. Arnotts in Huntingwood NSW is a good example of this. It's really up to each division President to maximise his/her division's profitability. Intermodal is run by Ian Strachan and he's a good operator, I've worked with him. Can't say the same about the insipid CEO Mark Mazurek though. If Ian get's the support from the Board, you should see a fair bit of rail action.

Edit: The Linfox Board has also mandated significant and on-going reductions in carbon emissions. Rail is part of that strategy.
Its a sad memory I know when you mention the Arnott's factory at Huntingwood, a move they had to make out of Nth Strathfield, I can remember the amount of vans, and not just the 4 wheelers that were sent out of there 5 days a week to various country areas, a joining up again with rail would be good, there is a proposal but a while away yet for a new bulk goods terminal in the Erskine Park area when the new line from St Mary's goes ahead, few years away but if Linfox are eager to capture a lot back to rail who knows what can happen.

But, I wont hold my breath on that aspect of recapturing traffic though.
a6et
Going off topic for a moment. I worked on the refurbishment of Arnotts Huntingwood. Even when it was completed, it was a dog of a site. Cramped, etc. Only one thing going for it: It's right next to the biscuit making and a conveyor belt moves the new product across into the store. Actually, the storage is so bad that Linfox moves the biscuits off site to a new warehouse in Bungarribee about 1km away....a continual stream of trucks back'n'forth! Stupidity.
  ParkesHub Chief Commissioner

Linfox are a trucking company and they will put freight on the cheapest route. Expect some to go to road. Keen to understand how much Linfox traffic on rail into Brisbane from the south can be sent further north on rail ?
freightgate
Linfox are like Toll, SCT, etc. A logistics company. If it stuck to trucking, it's be out of business by now.
  a6et Minister for Railways

I think that this is a great outcome considering the alternatives (closure or near monopoly).

Would this have happened without ACCC action? Probably not.

While the ACCC are from perfect, at least they are effective. Watching the Banking Royal commission, ASIC and other financial regulators, they need to lead and be an effective regulator. They do need to use the BIG stick sometimes. ACCC are not afraid to take on the big end of town and their silks to create change.

While the deal with Linfox could have some negative effects too, but at least it gives transport customers choice. A great outcome.

My concern would be the propensity of Linfox Management to move the rail based carriage to truck in line with their current business practices?
I wouldn't worry too much about that. Linfox Intermodal is the old FCL Transport. It provides a carriage service to other Linfox divisions and sends as much by rail as it can. Divisions such as FMCG (Fast Moving Consumer Goods) still send B-Dubs interstate. Arnotts in Huntingwood NSW is a good example of this. It's really up to each division President to maximise his/her division's profitability. Intermodal is run by Ian Strachan and he's a good operator, I've worked with him. Can't say the same about the insipid CEO Mark Mazurek though. If Ian get's the support from the Board, you should see a fair bit of rail action.

Edit: The Linfox Board has also mandated significant and on-going reductions in carbon emissions. Rail is part of that strategy.
Its a sad memory I know when you mention the Arnott's factory at Huntingwood, a move they had to make out of Nth Strathfield, I can remember the amount of vans, and not just the 4 wheelers that were sent out of there 5 days a week to various country areas, a joining up again with rail would be good, there is a proposal but a while away yet for a new bulk goods terminal in the Erskine Park area when the new line from St Mary's goes ahead, few years away but if Linfox are eager to capture a lot back to rail who knows what can happen.

But, I wont hold my breath on that aspect of recapturing traffic though.
Going off topic for a moment. I worked on the refurbishment of Arnotts Huntingwood. Even when it was completed, it was a dog of a site. Cramped, etc. Only one thing going for it: It's right next to the biscuit making and a conveyor belt moves the new product across into the store. Actually, the storage is so bad that Linfox moves the biscuits off site to a new warehouse in Bungarribee about 1km away....a continual stream of trucks back'n'forth! Stupidity.
ParkesHub
That's the whole stupidity of it, where the car sidings are now and over on that side of the line where factories of different types are there was a network of sidings in there that had a shunting trip there all day working them before heading to Clyde just after the peak hour suburbans.  Campbells had a big warehouse at Marayong and they wanted to have a train out of there morning and evening for country destinations.

Also IIRC EPT built CDY's and some other open wagons there as well.
  james.au Chief Commissioner

Location: Sydney, NSW
My concern would be the propensity of Linfox Management to move the rail based carriage to truck in line with their current business practices?
I wouldn't worry too much about that. Linfox Intermodal is the old FCL Transport. It provides a carriage service to other Linfox divisions and sends as much by rail as it can. Divisions such as FMCG (Fast Moving Consumer Goods) still send B-Dubs interstate. Arnotts in Huntingwood NSW is a good example of this. It's really up to each division President to maximise his/her division's profitability. Intermodal is run by Ian Strachan and he's a good operator, I've worked with him. Can't say the same about the insipid CEO Mark Mazurek though. If Ian get's the support from the Board, you should see a fair bit of rail action.

Edit: The Linfox Board has also mandated significant and on-going reductions in carbon emissions. Rail is part of that strategy.
Indeed and to quote the AFR article "Linfox said the acquisition would increase the scale and scope of its services throughout Queensland and "strategically position" it for the future growth of the proposed inland rail line"

Doesn't sound like a move from Rail to road to me, sounds more like re-positioning for the future.

BG
BrentonGolding
The Inland is going to lead to some interesting discussions on these boards once it is running that is for sure.

And this deal might lead to some interesting ones in the mean time.
  james.au Chief Commissioner

Location: Sydney, NSW
Linfox are a trucking company and they will put freight on the cheapest route. Expect some to go to road. Keen to understand how much Linfox traffic on rail into Brisbane from the south can be sent further north on rail ?
Linfox are like Toll, SCT, etc. A logistics company. If it stuck to trucking, it's be out of business by now.
ParkesHub
I think the three of these are showing a bit of a spectrum:

Trucking companies - manages logistics, no further explanation needed
Toll - manages logistics, outsources all rail activity (wagons/train ownership and operations etc) to a loco provider (PN in this case)
Linfox - wagon ownership, outsources haulage (to both AZ and PN)
SCT/Fletchers/Crawfords - integrated ownership and operations
SSR - very limited exposure (now none post Carrington transferring to PN)

Rail wise (intermodal only):
PN+AZ - provide hook and pull to other operators
SCT - integrated logistics
Watco - TBA....
  bevans Site Admin

Location: Melbourne, Australia
I really do hope this is going to be positive for the customers across the entire east coast but specifically Queensland north coast line.  Am I right in assuming Linfox will only get Queensland based assets?
  james.au Chief Commissioner

Location: Sydney, NSW
I really do hope this is going to be positive for the customers across the entire east coast but specifically Queensland north coast line.  Am I right in assuming Linfox will only get Queensland based assets?
bevans
Yes.

There are no other assets on the table.

Though, if Linfox had volumes to run its own trains im sure Aurizon Bulk might find a few locos from somewhere to haul them....
  bingley hall Minister for Railways

Location: Last train to Skaville
ACCC have said they will not block the sale of the intermodal business to Linfox.

https://www.railexpress.com.au/aurizon-sells-queensland-intermodal-to-linfox/
  neillfarmer Train Controller

I must be dumb. First one company AZ can't make any money hauling containers in Queensland. So they sell the operation to another company Linfox, who will then get the first company to do the work for them. If there isn't enough meat on the bone for one dog, how are two going to survive?
  Big J Assistant Commissioner

Location: In Paradise
I must be dumb. First one company AZ can't make any money hauling containers in Queensland. So they sell the operation to another company Linfox, who will then get the first company to do the work for them. If there isn't enough meat on the bone for one dog, how are two going to survive?
neillfarmer
Aurizon is out, they are only the contractor providing loco services, like hiring a sub contractor for a truck to pull their trailer.

Linfox will concentrate all of their loadings on their trains. PNQ will lose those loads.

The question is, will this be profitable for Linfox rather than Aurizon?

The benefit for Linfox is that they won't have direct legacy costs that Aurizon had from being spun off from the public entity. However Aurizon will charge Linfox for those hook services, so it depends on that commercial deal how hard Linfox got Aurizon to wear those legacy costs or how much Linfox will be paying Aurizon for those. I suspect that Aurizon is probably is wearing some of that cost, as this removes a long term problem for them.  

The Alternative for Aurizon would be a protracted legal battle ($$$) to force the sale to PN or the big $$$ for complete write off for a closure of the service. This will be cheaper for them, so they went this way.
  BrentonGolding Chief Commissioner

Location: Maldon Junction
I must be dumb. First one company AZ can't make any money hauling containers in Queensland. So they sell the operation to another company Linfox, who will then get the first company to do the work for them. If there isn't enough meat on the bone for one dog, how are two going to survive?
neillfarmer
Us mere mortals will never know but Aurizon clearly wanted out of everything bar Bulk as it believes the margins are higher and the job easier than other areas of the rail business. So if they wanted to they could have been cost shifting within the business to make intermodal look worse than it was and therefore justify the shut down.

There could of course be myriad other things such as the above mentioned legacy costs, lazy business practices, fat in middle and other management positions etc that a new player may be able to weed out.

Andrew Harding for whatever reason come hell or high water wanted out of Intermodal and he doesn't seem to care what he has to do to get there.

BG
  Sulla1 Chief Commissioner

I must be dumb. First one company AZ can't make any money hauling containers in Queensland. So they sell the operation to another company Linfox, who will then get the first company to do the work for them. If there isn't enough meat on the bone for one dog, how are two going to survive?
Us mere mortals will never know but Aurizon clearly wanted out of everything bar Bulk as it believes the margins are higher and the job easier than other areas of the rail business. So if they wanted to they could have been cost shifting within the business to make intermodal look worse than it was and therefore justify the shut down.

There could of course be myriad other things such as the above mentioned legacy costs, lazy business practices, fat in middle and other management positions etc that a new player may be able to weed out.

Andrew Harding for whatever reason come hell or high water wanted out of Intermodal and he doesn't seem to care what he has to do to get there.

BG
BrentonGolding

I think you're right on the money BG. Bulk crews have had different work agreements since the ARG days, which may have also encouraged unwinding the old QR-oriented Intermodal and putting the remanents into Bulk. Intermodal also had an extensive road-haul delivery network left over from the Q-Link days that PN didn't have - an additional opertating cost that could have been used to tip the books in an unfavourable direction - even though that road delivery network and staff are now a key component of the Linfox purchase.
  MikeFromMitcham Beginner

I'm just trying to get some clarification about Aurizon's Dynon Terminal; has that gone to QUBE now?
  james.au Chief Commissioner

Location: Sydney, NSW
Two interesting documents lodged on the Federal Court website today - though I am not sure what they really mean.
Both documents refer to being able to view subpoenaed documents from QUBE and the Port of Brisbane.  Im not sure what legal processes are still under way, ACCC must still be pursuing the case.
  ParkesHub Chief Commissioner

Interestingly, 2 new terminals are also moving to Linfox. Longreach and Emerald. Far from the east coast....maybe Mt Isa will also follow.
  BrentonGolding Chief Commissioner

Location: Maldon Junction
I'm just trying to get some clarification about Aurizon's Dynon Terminal; has that gone to QUBE now?
MikeFromMitcham
I can't seem to get on to VicTrack's website ATM but I am pretty sure that North Dynon is Open Access and is used by Qube and PN now that Aurizon is no longer using it.

Qube were certainly using it before Aurizon exited the Interstate Intermodal business.

***edit finally got it to work, https://www.victrack.com.au/services-and-capabilities/property/freight-access ***

BG
  Sulla1 Chief Commissioner

Interestingly, 2 new terminals are also moving to Linfox. Longreach and Emerald. Far from the east coast....maybe Mt Isa will also follow.
ParkesHub
I believe the Cloncurry and Mt Isa Terminals will fall outside of this agreement, not having been part of the intermodal network for several years. The future use of Longreach will be interesting, as it will provide a theoretical rail to road trucking footprint into the North West and the Northern Territory for freight moving in and out of Brisbane, something that hasn't been exploited by Aurizon and its predecessors or rail competitors.

The existing Warrego/Landsborough/Barkly Highway Corridor between Brisbane and the Northern Territory Border - that Longreach sits in the middle of - is carrying between 1.0-million and 5.0-million tonnes per annum west of Roma and between 5.0-million tonnes to 10-millon tonnes per annum east of Roma, so there's room for combined rail/road hauls out of Longreach if Linfox wanted to pursue options for greater rail use.
  ParkesHub Chief Commissioner

Interestingly, 2 new terminals are also moving to Linfox. Longreach and Emerald. Far from the east coast....maybe Mt Isa will also follow.
I believe the Cloncurry and Mt Isa Terminals will fall outside of this agreement, not having been part of the intermodal network for several years. The future use of Longreach will be interesting, as it will provide a theoretical rail to road trucking footprint into the North West and the Northern Territory for freight moving in and out of Brisbane, something that hasn't been exploited by Aurizon and its predecessors or rail competitors.

The existing Warrego/Landsborough/Barkly Highway Corridor between Brisbane and the Northern Territory Border - that Longreach sits in the middle of - is carrying between 1.0-million and 5.0-million tonnes per annum west of Roma and between 5.0-million tonnes to 10-millon tonnes per annum east of Roma, so there's room for combined rail/road hauls out of Longreach if Linfox wanted to pursue options for greater rail use.
Sulla1
Cloncurry and Mt Isa are definitely outside the agreement. Linfox currently have a small presence in Mt Isa and Cloncurry due to the BHP loadings. That's assuming they still hold the shipment contracts.
  james.au Chief Commissioner

Location: Sydney, NSW
The existing Warrego/Landsborough/Barkly Highway Corridor between Brisbane and the Northern Territory Border - that Longreach sits in the middle of - is carrying between 1.0-million and 5.0-million tonnes per annum west of Roma and between 5.0-million tonnes to 10-millon tonnes per annum east of Roma, so there's room for combined rail/road hauls out of Longreach if Linfox wanted to pursue options for greater rail use.
Sulla1
These are not small volumes - I assume intermodal type traffic?  I wonder if Watco might want to tap into them too?
  x31 Chief Commissioner

Location: gallifrey
I'm just trying to get some clarification about Aurizon's Dynon Terminal; has that gone to QUBE now?
MikeFromMitcham

Aurizon used the North Dynon Terminal which is open access.  Qube, SSR and PN use this terminal.

Sponsored advertisement

Display from: