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Pacific National's customers have accused the dominant rail freight carrier of using its market power to gouge them.
Freight forwarding companies said yesterday the Toll Holdings and Patrick Corp joint venture, which controls 75 per cent of the rail market, had forced them to accept increases of up to 300per cent in the past 12 months, with further hikes to come.
The comments follow a warning from the national rail regulator against Toll's proposed takeover of Patrick, saying the companies had abused a near-monopoly in rail to increase the price of freight services.
The Australian Rail Track Corporation has made a submission to the Australian Competition and Consumer Commission accusing PN of boosting profits by failing to pass on cost savings to customers.
John McNamara, intermodal general manager of freight company CRT Group, said his company had no choice but to accept the higher charges from PN.
CRT, which was acquired by Queensland Rail in July, uses PN to carry rail freight between its warehouse in Melbourne's Altona and the wharves at Port Melbourne.
Mr McNamara said PN had recently advised it of a 30 per cent increase in charges, effective from January 1.
This was set to be followed by a further 30 per cent hike just six months later, with rates ultimately doubling over five years.
"There is no doubt that PN is very aggressive in the marketplace. When you're a dominant force, you don't have to focus on your customers as you do when there's competition," he said.
PN chief executive Stephen O'Donnell said the price rises were necessary because the company was covering only 80per cent of its costs on the route.
The general manager of a freight company operating in Tasmania, where PN controls the rail network, said he was forced last November to accept price hikes of between 20 and 300 per cent. "They really slugged the shorter sectors -- they were the ones that went up most of all, and we were left with no alternative but to take the majority of our container freight off the rails and put it on the road," he said.
The manager requested anonymity, saying he was worried about the consequences for his business if Toll succeeded in its takeover bid for Patrick.
"This increase came completely out of the blue and was done on 30 days' notice," he said, adding that no explanation had been offered for the increases. In addition, PN used three-year-old fuel prices as a "base rate" when calculating fuel surcharges, amplifying the impact of rising fuel costs on customers and inflating revenues for PN.
The manager said he had also seen invoices sent to Toll from PN, which is operated at arm's length from its shareholder companies, which showed Toll was being charged substantially less for PN's rail services.
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