AusRAIL, Market Sectors

Patrick move on FCL has benefits, says rival Little

<table width="413" border="0"> <tr> <td><p>Toll Holdings chief executive Paul Little said that it was inevitable and expected that Patrick Corporation would move into rail container freight forwarding.</p> <p>However, the freight industry will benefit from the increased consolidation of ownership, he said. </p> <p>Patrick said last week that it is in talks to buy Australia’s largest east-west domestic container freight operator FCL, putting it into competition for rail freight with Toll, its co-owner of the Pacific National rail network. </p> <p>Mr Little said that Patrick’s move was a natural extension of its 50% ownership of Pacific National. </p> <p>The competitive impact would see some offset from consolidation benefits in the industry as a whole, he said. </p> <p>He also said that Toll and Patrick already compete squarely in the Bass Strait shipping and forwarding business, in auto logistics, and in conventional stevedoring. </p><p>&nbsp</p><p>Last year, Patrick made a huge $800m bid to buy the Star Track Express parcels business, a major rival for Toll in the express freight sector. </p> <p>Mr Little said that Patrick as an owner of Virgin Blue would have wanted to put freight on its aircraft. </p> <p>Toll Holdings yesterday (Thursday, March 18) met Northern Territory chief minister Clare Martin to discuss the progress of the Adelaide-Darwin railway where Toll is a major user. </p> <p>Mr Little said Toll had reluctantly accepted a rate increase from rail operator FreightLink, and had been the last user to do so. </p> <p>"We remain very concerned at the narrow gap between road and rail pricing, which is only around 5% to 10%," he said. "If a promised increase in October 2005 erodes the differential yet again, you would have to wonder why we would pay as much, if not more, than road and for a slower transit time. </p> <p>"The stability of our cost base is very important to us and our customers into the future, and we could get to a point where we are not able to use the railway." </p> </td> </tr> </table> <br />