Aurizon prepares to sell its Intermodal Division

 
  Big J Assistant Commissioner

Location: In Paradise
Why would they sell I don't understand at all since the company is in the freight business and selling intermodal would mean no interstate box forwarding. Makes no sense to me. Aren't they are rail company?
MetroFemme
They are business, to maximise their return to their shareholders. That is why you see these businesses for better and for worse they evolve.

The simple money is in rocks. The margins must be slim in that, but the turnover is huge with the long term contracts involved for the capital outlay.

I imagine intermodal is very competitive not just with other rail providers but with road too.

Other businesses do see the gap and have a strategy to be in the intermodal market (eg SCT). However we have seen them too enter the rock market as it is attractive for their assets.

I am a canetoad and yes I think it is sad that the privatised QR body is leaving their roots. I do feel for the employees impacted.

Apart from selling intermodal they are abandoning more freight in Qld. They have announced the closure of Mackay freight and sacking drivers and shunters. They are doing this at other locations as well. Obviously their board are sticking to black rock haulage and foregoing the other commodities. Sad day. While PNQ will pick up some of the gap I can see more of this going to road. I can't see how another player like Qube taking on the likes of sugar and Qld boxes.

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  bevans Site Admin

Location: Melbourne, Australia
Queensland Transport looks to becoming quite a mess for the customer.  I see some similarity to the V/Line days when the Kennett Government wound back V/Line and they dumped customers from rail never to return even when other operators entered the market.  They and burned the transport mode in the eyes of the customer.

The management at Aurizon are pushing freight to road and are increasing road risk for the average user.
  petan Chief Commissioner

Location: Waiting to see a zebra using a zebra crossing!

Other businesses do see the gap and have a strategy to be in the intermodal market (eg SCT). However we have seen them too enter the rock market as it is attractive for their assets.
Big J
SCT seems to want rail as shown by their new Bromelton terminal but as Big Jas has noted, they will haul what ever is attractive for their assets. Case in point is SCT does the Condong sugar mill traffic around my region.
  Sulla1 Chief Commissioner

The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.
  james.au Chief Commissioner

Location: Sydney, NSW
The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.
Sulla1

Its still not clear to me if the NG intermodal is or is not included in this intermodal sale.
  ParkesHub Chief Commissioner

Qube have gone into a capital raising exercise. It's a one share per 15 held at an 11% discount. Seems more than a co-incidence.
  fzr560 Chief Train Controller

Queensland Transport looks to becoming quite a mess for the customer.  I see some similarity to the V/Line days when the Kennett Government wound back V/Line and they dumped customers from rail never to return even when other operators entered the market.  They and burned the transport mode in the eyes of the customer.

The management at Aurizon are pushing freight to road and are increasing road risk for the average user.
bevans
The management at Aurizon are there to look after Aurizon's shareholders. Roads and the risks involved in using those road's, is the domain of the Qld Govt. The same people that took the filthy lucre when they decided to sell.
  bingley hall Minister for Railways

Location: Last train to Skaville
The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.

Its still not clear to me if the NG intermodal is or is not included in this intermodal sale.
james.au

I don't think it's clear to anyone except those how are bidding. Let's face it, we don't even know if the list of potential bidders is accurate.

I did hear that it was a sort of "make us an offer, but you don't have to buy both" kind of scenario - but that was 4th or 5th hand so I wouldn't put too much faith in that.
  james.au Chief Commissioner

Location: Sydney, NSW
The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.

Its still not clear to me if the NG intermodal is or is not included in this intermodal sale.

I don't think it's clear to anyone except those how are bidding. Let's face it, we don't even know if the list of potential bidders is accurate.

I did hear that it was a sort of "make us an offer, but you don't have to buy both" kind of scenario - but that was 4th or 5th hand so I wouldn't put too much faith in that.
bingley hall

Yeah part of me is thinking that this could be a big whacking stick they're taking to the business too to drive some costs out of it some how.  Threatening it with a sale is a sledgehammer way to do it.  But if what has been said about Aurizon practices on the interstate (e.g. a brand new Landcruiser in Junee just to collect crews and drive them to their accomodation which is not far away), then perhaps it is what is needed?
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
Queensland Transport looks to becoming quite a mess for the customer.  I see some similarity to the V/Line days when the Kennett Government wound back V/Line and they dumped customers from rail never to return even when other operators entered the market.  They and burned the transport mode in the eyes of the customer.

The management at Aurizon are pushing freight to road and are increasing road risk for the average user.
The management at Aurizon are there to look after Aurizon's shareholders. Roads and the risks involved in using those road's, is the domain of the Qld Govt. The same people that took the filthy lucre when they decided to sell.
fzr560
Seems yet another case where a corrupt or incompetent government sold its right and ability to govern for the greater good along with taxpayer owned assets that were held in trust for the community at large.

Thirty pieces of silver wasn't it ? Sad
  fzr560 Chief Train Controller

The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.

Its still not clear to me if the NG intermodal is or is not included in this intermodal sale.

I don't think it's clear to anyone except those how are bidding. Let's face it, we don't even know if the list of potential bidders is accurate.

I did hear that it was a sort of "make us an offer, but you don't have to buy both" kind of scenario - but that was 4th or 5th hand so I wouldn't put too much faith in that.

Yeah part of me is thinking that this could be a big whacking stick they're taking to the business too to drive some costs out of it some how.  Threatening it with a sale is a sledgehammer way to do it.  But if what has been said about Aurizon practices on the interstate (e.g. a brand new Landcruiser in Junee just to collect crews and drive them to their accomodation which is not far away), then perhaps it is what is needed?
james.au
I wouldn't get too hung up on the Landcruisers at Junee. You only need one flat battery in the old shA2box before the tax deductible lease on the Landcruiser starts to make sense. Like most, I'm surprised that Aurizon would consider getting rid of Intermodal but if you are looking for 15 percent return on investment, some stuff makes the cut and some doesn't. You can bet that the average owner-driver on the Bris-Melb run is not looking for 15 percent/pa.
  james.au Chief Commissioner

Location: Sydney, NSW
The 6000s and 2800s will probably form the bulk of any locomotives provided as part of the sale, but it's hard to tell how many. The Queensland narrow gauge intermodal traffic currently requires at least twenty 2800s each day.

Its still not clear to me if the NG intermodal is or is not included in this intermodal sale.

I don't think it's clear to anyone except those how are bidding. Let's face it, we don't even know if the list of potential bidders is accurate.

I did hear that it was a sort of "make us an offer, but you don't have to buy both" kind of scenario - but that was 4th or 5th hand so I wouldn't put too much faith in that.

Yeah part of me is thinking that this could be a big whacking stick they're taking to the business too to drive some costs out of it some how.  Threatening it with a sale is a sledgehammer way to do it.  But if what has been said about Aurizon practices on the interstate (e.g. a brand new Landcruiser in Junee just to collect crews and drive them to their accomodation which is not far away), then perhaps it is what is needed?
I wouldn't get too hung up on the Landcruisers at Junee. You only need one flat battery in the old shA2box before the tax deductible lease on the Landcruiser starts to make sense. Like most, I'm surprised that Aurizon would consider getting rid of Intermodal but if you are looking for 15 percent return on investment, some stuff makes the cut and some doesn't. You can bet that the average owner-driver on the Bris-Melb run is not looking for 15 percent/pa.
fzr560
The Landcrusier at June was just an example.  If true, it could be an indicator of the cost control elsewhere in the business.

Im reading in the press that the division is actually making losses, and has been for a while (or for ever).  Negative returns on investment are not desirable for anyone....
  Sulla1 Chief Commissioner

Intermodal has traditionally been a marginal business throughout the world. In the 1980s Santa Fe's intermodal business was losing money and Santa Fe's senior management was instead focusing on the huge profits to be made moving coal to Texas and California. A new manager (later to be made CEO of KCS) was appointed to intermodal and turned the business into the most profitable arm of the Santa Fe and later a massive profit component of the modern BNSF. The big new idea that changed everything? Dragging the head of one of the largest trucking companies in North America - JB Hunt - on to a freight train and ahowing him what rail could do. Before the trip was over the two were inking a deal to use rail as the long haul component of the JB Hunt trucking business. I wonder if anyone at Aurizon has heard this story?
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
Intermodal has traditionally been a marginal business throughout the world. In the 1980s Santa Fe's intermodal business was losing money and Santa Fe's senior management was instead focusing on the huge profits to be made moving coal to Texas and California. A new manager (later to be made CEO of KCS) was appointed to intermodal and turned the business into the most profitable arm of the Santa Fe and later a massive profit component of the modern BNSF. The big new idea that changed everything? Dragging the head of one of the largest trucking companies in North America - JB Hunt - on to a freight train and ahowing him what rail could do. Before the trip was over the two were inking a deal to use rail as the long haul component of the JB Hunt trucking business. I wonder if anyone at Aurizon has heard this story?
Sulla1
Or at PN for that matter..........
  james.au Chief Commissioner

Location: Sydney, NSW
Intermodal has traditionally been a marginal business throughout the world. In the 1980s Santa Fe's intermodal business was losing money and Santa Fe's senior management was instead focusing on the huge profits to be made moving coal to Texas and California. A new manager (later to be made CEO of KCS) was appointed to intermodal and turned the business into the most profitable arm of the Santa Fe and later a massive profit component of the modern BNSF. The big new idea that changed everything? Dragging the head of one of the largest trucking companies in North America - JB Hunt - on to a freight train and ahowing him what rail could do. Before the trip was over the two were inking a deal to use rail as the long haul component of the JB Hunt trucking business. I wonder if anyone at Aurizon has heard this story?
Sulla1

Don't know but they don't need to look to the US - that is precisely what SCT does here in Aus.

Its interesting that Toll is listed as a bidder, as this would seem to perfectly match what you're saying above.
  petan Chief Commissioner

Location: Waiting to see a zebra using a zebra crossing!
Aurizon Superfreighter Guide Week Commencing Monday 24th October 2016 goo.gl/mzPBwV
Full URL
https://www.aurizon.com.au/~/media/aurizon/files/what%20we%20do/services/intermodal%20freight/guides/aurizon%20superfreighter%20guide%20october%202016.pdf
  petan Chief Commissioner

Location: Waiting to see a zebra using a zebra crossing!
Acacia Ridge 2014 analysis
http://allsourceanalysis.com/wp-content/uploads/2014/12/ASA_DiscoveryReport_Sample.pdf
  james.au Chief Commissioner

Location: Sydney, NSW
Aurizon Superfreighter Guide Week Commencing Monday 24th October 2016 goo.gl/mzPBwV
Full URL
https://www.aurizon.com.au/~/media/aurizon/files/what%20we%20do/services/intermodal%20freight/guides/aurizon%20superfreighter%20guide%20october%202016.pdf
petan

Thats got some good info, but a shocking part is on page 22 for example.  Depart Melbourne in the evening, freight available Cairns Friday morning.  Lets say 84 hours...  A truck would be back in Melbourne in that time....

How does PN compare?
  ParkesHub Chief Commissioner

Intermodal has traditionally been a marginal business throughout the world. In the 1980s Santa Fe's intermodal business was losing money and Santa Fe's senior management was instead focusing on the huge profits to be made moving coal to Texas and California. A new manager (later to be made CEO of KCS) was appointed to intermodal and turned the business into the most profitable arm of the Santa Fe and later a massive profit component of the modern BNSF. The big new idea that changed everything? Dragging the head of one of the largest trucking companies in North America - JB Hunt - on to a freight train and ahowing him what rail could do. Before the trip was over the two were inking a deal to use rail as the long haul component of the JB Hunt trucking business. I wonder if anyone at Aurizon has heard this story?

Don't know but they don't need to look to the US - that is precisely what SCT does here in Aus.

Its interesting that Toll is listed as a bidder, as this would seem to perfectly match what you're saying above.
james.au
I'm not quite sure why you mention SCT? I'm not sure Toll are serious, they have Michael Byrne as CEO.
  petan Chief Commissioner

Location: Waiting to see a zebra using a zebra crossing!
Aurizon Superfreighter Guide Week Commencing Monday 24th October 2016 goo.gl/mzPBwV
Full URL
https://www.aurizon.com.au/~/media/aurizon/files/what%20we%20do/services/intermodal%20freight/guides/aurizon%20superfreighter%20guide%20october%202016.pdf

Thats got some good info, but a shocking part is on page 22 for example.  Depart Melbourne in the evening, freight available Cairns Friday morning.  Lets say 84 hours...  A truck would be back in Melbourne in that time....

How does PN compare?
james.au
Well James or anyone else, can you find the PN equivalent for us as I would be interested Smile
  james.au Chief Commissioner

Location: Sydney, NSW
Aurizon Superfreighter Guide Week Commencing Monday 24th October 2016 goo.gl/mzPBwV
Full URL
https://www.aurizon.com.au/~/media/aurizon/files/what%20we%20do/services/intermodal%20freight/guides/aurizon%20superfreighter%20guide%20october%202016.pdf

Thats got some good info, but a shocking part is on page 22 for example.  Depart Melbourne in the evening, freight available Cairns Friday morning.  Lets say 84 hours...  A truck would be back in Melbourne in that time....

How does PN compare?
Well James or anyone else, can you find the PN equivalent for us as I would be interested Smile
petan

Well, 2MB4 (PN) leaves Melbourne about 830pm Monday too, arrives Acacia Ridge Wednesday early morning (3am).  Thats where i hit a bit of a stop - the QR NCL timetables don't seem to be public.
  Big J Assistant Commissioner

Location: In Paradise
Is WA narrow gauge part of this?
  Sulla1 Chief Commissioner

There's no narrow gauge intermodal in WA, all those operations are remaining within Aurizon's core bulk freight activities.
  Sulla1 Chief Commissioner

There's no narrow gauge intermodal in WA, all those operations are remaining within Aurizon's core bulk freight activities.
  ParkesHub Chief Commissioner

Where Aurizon and especially PN come unstuck is the overall time it takes for the customer to get a box from A to B. The transit time is one issue but the main issue is the Cut Off Time at A to Freight Available Time at B. I seem to recall from my FCL days, the cut off time at Dynon was 5PM for an evening departure. Then PN pulled it back to 2PM! There's Sweet FA customers can get their freight stuffed into a box, shipped from wherever and make it into Sth Dynon by a 2PM cut off. Aurizon aren't any better.

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