<p>Revenue from the Australian Railroad Group’s (ARG) new Melbourne-Adelaide intermodal service has helped offset a drop in grain haulage business, the rail operator’s co-owner Genesee and Wyoming (GWI) has reported.</p> <p>ARG reported a 5.3% increase in revenue to US$86m for the second quarter of 2005.</p> <p>The revenue increase was largely due to an increase in third-party fuel sales, GWI said.</p> <p>ARG’s freight revenue remained largely unchanged from the comparable period last year, but the mix of business was significantly changed.</p> <p>A US$7.4m drop in grain revenue was offset by a US$3.7m increase in iron ore haulage, a US$1.5m increase in alumina and bauxite shipments and a US$2.3m increase in all other shipments – including the Melbourne-Adelaide intermodal service that started in June. </p> <p>GWI said the operating results had been adversely affected by a 39% increase in diesel fuel prices.</p> <p>The company also continued to incur significant hiring and training costs for locomotive drivers in preparation for increased shipments in 2005ቢ, the company said.</p> <p>However, GWI chief executive Mortimer B Fuller III said the outlook for ARG had "never been brighter".</p> <p>ARG’s free cash flow was expected to strengthen substantially in 2006, Mr Fuller said.</p> <br />
