FreightLink misses mark on revenue projections

<p>FreightLink has admitted that projections for some areas of its Adelaide-Darwin freight business will be lower than originally anticipated. </p> <p>The company has adopted a revised business plan following a lengthy review of the first year of operations and has pinpointed a number of factors that have forced changes to its intentions.</p> <p>"Now that we have a more accurate understanding of future growth and new business opportunities it is clear that in some areas of the business, projections will be lower than originally anticipated," FreightLink CEO John Fullerton said.</p> <p>"There have been a number of reasons for this, one of them being the capacity constraints on the interstate rail network limiting our ability to get freight into Adelaide for transhipment to Darwin.</p> <p>"The capacity problem has been widely recognised within the industry and action is being taken to rectify this, but it will take time."</p> <p>Although the first-year haulage of almost 600,000 tonnes had exceeded expectations, the cargo mix and revenues generated were not in line with the original business plan, Mr Fullerton said. </p> <p>However the long-term business prospects of the company were "very sound" and it was not unusual for a company to review and change plans 12 months into operations of a "large greenfields project", he said.</p> <p>FreightLink says it has now been able to assess customers’ response to operations get an insight into the factors affecting the timing and take-up of new business and to identify emerging opportunities.</p> <p>"But FreightLink is only going to fulfil its potential if the new business plan is implemented," Mr Fullerton said.</p> <p>Part of its new plan will include more capital investment to match the future cargo requirements.</p> <p>"We’re planning to spend $14m on the purchase of 100 well wagons, to enable double-stacking and to modify existing wagons to carry fuel products in late 2005," he said.</p> <p>The company will also build a new rail siding 160km north of Tennant Creek for the 600,000 tonnes a year of manganese that is to be railed from the Bootu Creek mine to port of Darwin starting later this year.</p> <p>"New business opportunities are emerging in the minerals area, something not factored into the original business plan," Mr Fullerton said.</p> <p>The company said its international strategy is ahead of schedule, with 16000 tonnes exported so far to Indonesia, East Timor, Malaysia, Vietnam and Thailand. </p> <p>It has worked with the Northern Territory Government, businesses and shipping lines to try and attract more regular services into the port of Darwin from southeast Asia and China, he said.</p> <p>"We have high expectations that the frequency of shipping services, the volume of freight available and its pricing can be finalised to ensure that long-term, sustainable operations can be introduced," Mr Fullerton said.</p> <p>FreightLink said it has recently introduced new pricing for the general freight market and will work with customers to ensure the services remained competitive on the corridor and that volumes will build.</p> <br />