Aurizon selling intermodal business to PN/Linfox

 
  LancedDendrite Chief Commissioner

Location: North Haverbrook; where the monorail is king!
IMO, the only reason the ACCC should be involved in this is due to the Acacia ridge yard.   It was relatively open access but with PN taking over it might not be.   That means the only possible container terminals in the brisbane area not controlled by PN are Clapham yard (which was previously used by toll) and the port of brisbane.
tazzer96
Where are the other rail operators that would use Acacia Ridge? With Aurizon gone, PacNat's the only user of the terminal. SCT uses their own terminal at Bromelton and is proposing to run port rail shuttles from there to the Port of Brisbane. ARTC seems to have some property adjacent to SCT Bromelton that they would likely end up turning into an open-access terminal, although Acacia Ridge would definitely have advantages as it's a going concern.

The NCLQ intermodal business is more deserving of scrutiny at this point in time. There needs to be some guarantees that there will be service improvements on the rail side and that the new consortium will not end up just putting more trucks onto the Bruce Highway.

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  RTT_Rules Dr Beeching

Location: Dubai UAE
As for the ACCC, yeah well PN have been there before. The ACCC's response then was less than perfect and I'm sure they will take this into account. The ACCC cannot stop Aurizon closing the interstate so no influence there.

As for ACCC trying to prevent or curve PN taking over Qld, you have to ask why bother? Much of the interstate is now single operator, as is NT, as is Tas, as is NZ. If they block the sale, its quite likely Aurizon will just close it down by stealth hand it over to PN over a 1-2 year period by not taking up new contracts and off-loading existing.  

Overall in this regard I don't believe the ACCC will have any significant impact on the sale apart from trying to justify their jobs.

After 20 years of open access on rail, the Australian market is proving to be a place that does not support much competition on rail outside major haulage tasks.

If the ACCC is doing its job it will look at whether there was a better deal from a competition perspective.  For example:

ARTC is mentioned as a bidder.  As noted up thread, possibly for Acacia Ridge (ARTC Bromelton hasn't been opened yet).  Now if ARTC was to own it it would most likely own it as an open access terminal which may provide easier access to operators.  If PN is unregulated here, it may not allow terminal operations, meaning rail carriers are shut out.  If ARTC looks at this and says that PN has paid a higher price to buy this, they may either block the sale, or put regulations in place to ensure access to third parties.

Similarly for the NCLQ.  If say SCT had a decent bid, but PN had a bigger one as it saw monopoly profits on the horizon, then ACCC may have a path of action if they see that this has the effect of lessening competition.

Lets see what the issues paper comes back with.
james.au

With regard to Acacia Ridge I suppose PN's response might be, "SCT built their own terminal, others can do so too or we are always open to offers to sub lease out any unused space in our existing facilities."

PN operated out of QR's terminal for many years, I think it would be difficult for them to suddenly close the gate on others.  

I doubt ACCC will get involved in the Qld NG rail operation at all, there would be no other bidders.
  james.au Chief Commissioner

Location: Sydney, NSW

With regard to Acacia Ridge I suppose PN's response might be, "SCT built their own terminal, others can do so too or we are always open to offers to sub lease out any unused space in our existing facilities."

PN operated out of QR's terminal for many years, I think it would be difficult for them to suddenly close the gate on others.  

I doubt ACCC will get involved in the Qld NG rail operation at all, there would be no other bidders.
RTT_Rules

Re AR - what would need to happen though is regulation be put in place.  They won't volunteer this unless they think the ACCC would require it.

Re the NCLQ, i think if the article in the Aus is to be believed, SCT may well have been a bidder for this.  What use would they have for AR given they have Bromelton now?  It would really suit SCT to have an NG service north of Brisbane that they could integrate with their SG services.  I think that a company like SCT would really relish this challenge and do it well given the ability it has elsewhere on the network.
  bingley hall Minister for Railways

Location: Last train to Skaville
Very sad, considering the history, however privatising enabled the government to blame the company for the actions that it needs to take. However I agree with other posters basically they are staking their claim to hauling rocks. So they are exposed entirely onto those commodity markets in the long term.

What are the implications for WA?
The history of hauling black rocks in Australia is linked to a chart that shows almost annual YOY growth and provided substantial returns for most of those operating in this business.
The history of hauling boxes and the financial returns does not show anywhere near the same growth or volumes and given a choice I'd know which one I'd be siding with.
RTT_Rules

Note that graph finishes in 2011 - coal has virtually flatlined since then. Still plenty to play with for a few years yet, but not such a bright future. Australia can keep its head stuck in the tar sands all it wants, but global developments elsewhere clearly show a need for a Plan B.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Very sad, considering the history, however privatising enabled the government to blame the company for the actions that it needs to take. However I agree with other posters basically they are staking their claim to hauling rocks. So they are exposed entirely onto those commodity markets in the long term.

What are the implications for WA?
The history of hauling black rocks in Australia is linked to a chart that shows almost annual YOY growth and provided substantial returns for most of those operating in this business.
The history of hauling boxes and the financial returns does not show anywhere near the same growth or volumes and given a choice I'd know which one I'd be siding with.

Note that graph finishes in 2011 - coal has virtually flatlined since then. Still plenty to play with for a few years yet, but not such a bright future. Australia can keep its head stuck in the tar sands all it wants, but global developments elsewhere clearly show a need for a Plan B.
bingley hall
If you referring to exports, no, or rather hardly and what gave you that idea?

2011 to 2015, Qld total coal exports increased from 164mtpa to 221mtpa, all three major grades increased exports. So the only way it could remain flat over this time is if NSW cut back production by 60mtpa, which I doubt.

I couldn't find a graph for Australia coal exports that went later than 2011-12, but I have excel data on Qld exports for this time period and some of the increases in include the likes of Germany, France and Switzerland.

All projections for coal exports only show an increase in coal production well beyond 2030. The "hype" from those with their heads already in the sand on reality, or rather the clouds does not mitigate the real world demand and requirements to keep the lights on, cars rolling out, trains and infrastructure production, a aviation industry that has no external threat to growth.

Plan B is nice, but for the investors in Aurizon, coal exports will see most if not all of them out.
  GS4 Train Controller

What struck me as odd about selling locos was that Aurizon had only about 6 months ago taken delivery of another 2 6000 class GE's. Obviously its probably another facet of a very large short sighted decision.

or ..........

Could Aurizon use these locos for the Adani line in Qld.  There is no definite proof of what gauge that line will be yet. I think when we see sleepers cast and being delivered we will finally know for sure.  I think the railfan part of us would like to see SD70's or AC4400's but couldn't Aurizon use 6000's to at least construct the line and early haulage on the line.

Why not sell the loss making part of your business and retain and utilise valuable assets for an expansion of your core competence ?
  Fatty Assistant Commissioner

Location: Melbourne
Very sad, considering the history, however privatising enabled the government to blame the company for the actions that it needs to take. However I agree with other posters basically they are staking their claim to hauling rocks. So they are exposed entirely onto those commodity markets in the long term.

What are the implications for WA?
The history of hauling black rocks in Australia is linked to a chart that shows almost annual YOY growth and provided substantial returns for most of those operating in this business.
The history of hauling boxes and the financial returns does not show anywhere near the same growth or volumes and given a choice I'd know which one I'd be siding with.

Note that graph finishes in 2011 - coal has virtually flatlined since then. Still plenty to play with for a few years yet, but not such a bright future. Australia can keep its head stuck in the tar sands all it wants, but global developments elsewhere clearly show a need for a Plan B.
bingley hall
I agree. Betting the future of a company on fossil fuels is absolutely idiotic. No matter which imaginary statistics the coal lovers pull out the industry is will be seeing a massive downturn in the not too distant future.
  Fatty Assistant Commissioner

Location: Melbourne
Very sad, considering the history, however privatising enabled the government to blame the company for the actions that it needs to take. However I agree with other posters basically they are staking their claim to hauling rocks. So they are exposed entirely onto those commodity markets in the long term.

What are the implications for WA?
The history of hauling black rocks in Australia is linked to a chart that shows almost annual YOY growth and provided substantial returns for most of those operating in this business.
The history of hauling boxes and the financial returns does not show anywhere near the same growth or volumes and given a choice I'd know which one I'd be siding with.

Note that graph finishes in 2011 - coal has virtually flatlined since then. Still plenty to play with for a few years yet, but not such a bright future. Australia can keep its head stuck in the tar sands all it wants, but global developments elsewhere clearly show a need for a Plan B.
I agree. Betting the future of a company on fossil fuels is absolutely idiotic. No matter which imaginary statistics the coal lovers pull out the industry is will be seeing a massive downturn in the not too distant future.
  x31 Chief Commissioner

Location: gallifrey
Very sad, considering the history, however privatising enabled the government to blame the company for the actions that it needs to take. However I agree with other posters basically they are staking their claim to hauling rocks. So they are exposed entirely onto those commodity markets in the long term.

What are the implications for WA?
The history of hauling black rocks in Australia is linked to a chart that shows almost annual YOY growth and provided substantial returns for most of those operating in this business.
The history of hauling boxes and the financial returns does not show anywhere near the same growth or volumes and given a choice I'd know which one I'd be siding with.

Note that graph finishes in 2011 - coal has virtually flatlined since then. Still plenty to play with for a few years yet, but not such a bright future. Australia can keep its head stuck in the tar sands all it wants, but global developments elsewhere clearly show a need for a Plan B.
I agree. Betting the future of a company on fossil fuels is absolutely idiotic. No matter which imaginary statistics the coal lovers pull out the industry is will be seeing a massive downturn in the not too distant future.
Fatty

One wonders what the 5 year growth plan for Aurizon might now look like given intermodal and other traffic is being shut down for short term cash management in a period where intermnodal volumes and the national freight task is growing and growing and growing with coal without growth.
  james.au Chief Commissioner

Location: Sydney, NSW
Their 5 year outlook probably looks a lot more cash positive than it did before the decision to shut down intermodal.
  tazzer96 Deputy Commissioner

What struck me as odd about selling locos was that Aurizon had only about 6 months ago taken delivery of another 2 6000 class GE's. Obviously its probably another facet of a very large short sighted decision.

or ..........

Could Aurizon use these locos for the Adani line in Qld.  There is no definite proof of what gauge that line will be yet. I think when we see sleepers cast and being delivered we will finally know for sure.  I think the railfan part of us would like to see SD70's or AC4400's but couldn't Aurizon use 6000's to at least construct the line and early haulage on the line.

Why not sell the loss making part of your business and retain and utilise valuable assets for an expansion of your core competence ?
GS4
Assuming the adani mine even goes ahead (which it won't), it won't use any existing loco's in australia.  It was proposed to be built to at least 30 TAL and and very heavy haulage locomotives. They announced it would certainly be standard gauge.
  Big J Assistant Commissioner

Location: In Paradise
Thanks for all of the replies. RTT what you said makes sense. Also Sulla thanks for explaining the WA situation.
Cheers
Jas
  LDP007 Beginner

i feel for all the drivers who tried to make it work.
  interfail42202 Beginner

Many a good driver lost! Drivers who knew more about the company and operations then the managers did! It all starts from the top! the culture at eagle street is driven with maids who walk around carting tea to high managers! Rainbow shoe laces, award nights,the aurizon choir the list goes on! red tape, incompetent managment is what closed down the interstate intermodal! paying 7 million a year for a 10 year lease at enfield is what closed Intermodal! Paying UGL for trip optimiser (auto pilot) which didnt work is what closed intermodal!. Paying for incab cameras is what closed intermodal! The whole culture at aurizon Stinks! a culture where anyone can do anyones job! where managers come in and have no idea how operations work! Harding talks about how intermodal made money in 3 years out of the 10. I bet its between 2013- to 2016. The managers then had an idea. they then bought in managers from North QLD coal, on time running went from 90% to about 27%. Once again we can go around preaching rainbow shoe laces and the purple day for the LGBTIQ, but the fact is they never supported this business 100% and focused on coal and other minerals.

Like LDP007 said we the driver ran that place due to mangers with no idea! Good luck to all of those who have shares in AURIZON.. just better hope renewable energy doesnt kick off in Australia in big way!
  james.au Chief Commissioner

Location: Sydney, NSW
It is interesting that both of the above posts are claiming that the drivers were influential
we the driver ran that place
.  Does that mean that you take responsibility for its closure too??  Or is that just blamed on management??  To me perhaps could be read that  management couldn't get employees (not just drivers) under control who didn't really know how to run the place and in the end decided to shut up shop to deal with it.....

And yes, i know I've probably just started a flame war here.


You mention they never really supported the business.  What could they have done differently?
  fzr560 Chief Train Controller

It is interesting that both of the above posts are claiming that the drivers were influential
we the driver ran that place
.  Does that mean that you take responsibility for its closure too??  Or is that just blamed on management??  To me perhaps could be read that  management couldn't get employees (not just drivers) under control who didn't really know how to run the place and in the end decided to shut up shop to deal with it.....

And yes, i know I've probably just started a flame war here.


You mention they never really supported the business.  What could they have done differently?
james.au
No flame war. Just another perspective. Drivers core responsibility is to stop for the "red ones". That's priority 1, 2 and 3. Should they not meet that responsibility they are called to account and forced to explain why they should keep their job. They are accountable. I fully understand the frustration felt by people when they appear to be the only people in the business that need to own their mistakes. I also understand the frustration of people who, not only perform their own duties but some-one else's as well.
    I have no direct knowledge of arrangements at Aurizon, however I suspect the billion plus dollars that previous management wasted in the Pilbara would have benefited other parts of the business. Any accountability there? Only a golden parachute.
  james.au Chief Commissioner

Location: Sydney, NSW
I have no direct knowledge of arrangements at Aurizon, however I suspect the billion plus dollars that previous management wasted in the Pilbara would have benefited other parts of the business. Any accountability there? Only a golden parachute.
fzr560

Agreed there - that looked to me to be ego driven and way outside of the core business of running a train operation.
  bingley hall Minister for Railways

Location: Last train to Skaville
Many a good driver lost! Drivers who knew more about the company and operations then the managers did! It all starts from the top! the culture at eagle street is driven with maids who walk around carting tea to high managers! Rainbow shoe laces, award nights,the aurizon choir the list goes on! red tape, incompetent managment is what closed down the interstate intermodal! paying 7 million a year for a 10 year lease at enfield is what closed Intermodal! Paying UGL for trip optimiser (auto pilot) which didnt work is what closed intermodal!. Paying for incab cameras is what closed intermodal! The whole culture at aurizon Stinks! a culture where anyone can do anyones job! where managers come in and have no idea how operations work! Harding talks about how intermodal made money in 3 years out of the 10. I bet its between 2013- to 2016. The managers then had an idea. they then bought in managers from North QLD coal, on time running went from 90% to about 27%. Once again we can go around preaching rainbow shoe laces and the purple day for the LGBTIQ, but the fact is they never supported this business 100% and focused on coal and other minerals.

Like LDP007 said we the driver ran that place due to mangers with no idea! Good luck to all of those who have shares in AURIZON.. just better hope renewable energy doesnt kick off in Australia in big way!
interfail42202

Unfounded assertions on people's sexuality to get your point across.

I bet you root donkeys on your day's off Razz
  Donald Chief Commissioner

Location: Donald. Duck country.
No assursions made, just comments about the way Aurizon and many other companies play the LGBTI card, spending money on non company needs.   Then having to sell off bits of the company to stay afloat.
  RTT_Rules Dr Beeching

Location: Dubai UAE
If Australia stopped burning coal completely tomorrow, the impact on rail operations would be minimal and replaced by coal exports within 12mths based on current growth figures.
  james.au Chief Commissioner

Location: Sydney, NSW
No assursions made, just comments about the way Aurizon and many other companies play the LGBTI card, spending money on non company needs.   Then having to sell off bits of the company to stay afloat.
Donald

I seriously doubt that the small, relatively minuscule amounts spent on LGBTI (and other community) issues could have saved the intermodal division.....  Seriously come on.
  br30453 Chief Train Controller

If Australia stopped burning coal completely tomorrow, the impact on rail operations would be minimal and replaced by coal exports within 12mths based on current growth figures.
RTT_Rules
Agree, as most don't understand that the majority of export coal is coking coal, a necessary input to steel making.
  fzr560 Chief Train Controller

No assursions made, just comments about the way Aurizon and many other companies play the LGBTI card, spending money on non company needs.   Then having to sell off bits of the company to stay afloat.

I seriously doubt that the small, relatively minuscule amounts spent on LGBTI (and other community) issues could have saved the intermodal division.....  Seriously come on.
james.au
That's not what was written. Just as "Shiny cars at Junee" is not a comprehensive report on the shortcomings of the business, Rainbow Day is a snapshot of the lack of focus of the administrative side of the business. If the business is profitable, if trains are running on time, if the customers are all happy, then a company may be justified in involving itself in things other than moving smeg from A to B. Until then, perhaps social issues are best left at the reception desk.
  james.au Chief Commissioner

Location: Sydney, NSW
That's not what was written. Just as "Shiny cars at Junee" is not a comprehensive report on the shortcomings of the business, Rainbow Day is a snapshot of the lack of focus of the administrative side of the business. If the business is profitable, if trains are running on time, if the customers are all happy, then a company may be justified in involving itself in things other than moving smeg from A to B. Until then, perhaps social issues are best left at the reception desk.
fzr560

There is a clear absence of any concrete, convincing evidence of any management action not taken that could have taken to turn the business around.  There are clear indications that conditions may have been too costly supported by anecdotes here like the "shiny cars at Junee".

All I'm hearing is the complaints from those in the business that are going to lose their jobs.  Now, I'm not unsympathetic, thats not something that anyone wishes to have happen to them, but I do have to wonder, what more could all of the company have done to reduce the costs across the business, and not just sit in their present conditions and expect heavy lifting to be done elsewhere.

This is the classic labour vs capital battle, but in most cases when labour and capital are working together, both are better off.
  fzr560 Chief Train Controller

That's not what was written. Just as "Shiny cars at Junee" is not a comprehensive report on the shortcomings of the business, Rainbow Day is a snapshot of the lack of focus of the administrative side of the business. If the business is profitable, if trains are running on time, if the customers are all happy, then a company may be justified in involving itself in things other than moving smeg from A to B. Until then, perhaps social issues are best left at the reception desk.

There is a clear absence of any concrete, convincing evidence of any management action not taken that could have taken to turn the business around.  There are clear indications that conditions may have been too costly supported by anecdotes here like the "shiny cars at Junee".

All I'm hearing is the complaints from those in the business that are going to lose their jobs.  Now, I'm not unsympathetic, thats not something that anyone wishes to have happen to them, but I do have to wonder, what more could all of the company have done to reduce the costs across the business, and not just sit in their present conditions and expect heavy lifting to be done elsewhere.

This is the classic labour vs capital battle, but in most cases when labour and capital are working together, both are better off.
james.au
There is no battle. Some people now have a means of supporting their families and some don't. I suggest most of those that don't have a means of supporting their families, more than met the terms of their contract. How would you describe a reduction in on-time running from 90% to 27%? A plot by the workers to get redundancy?

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