New ownership, a new and diverse executive team, new leasing offerings for customers, and investment in new local manufacturing is the start of a new era for Australia’s leading provider of rollingstock solutions for the rail freight sector.
Formerly known as Chicago Freight Car Leasing Australia (CFCLA), Rail First is now backed by global investors CVC DIF and CBRE Investment Management.
Beata Lipman, Rail First Chief Executive Officer, noted that pandemic-induced constraints in global and domestic supply chains and recent geopolitical tensions surrounding world trade have shone a spotlight on Australia’s ability to efficiently service complex freight and logistics networks.
“Shortages of essential products during the Covid crisis exposed Australia’s lack of local manufacturing – in a 2021 submission to the Senate Economics References Committee, the Productivity Commission reported manufacturing accounts for less than 10 per cent of the Australian economy,” she said.
“Rail First is therefore immensely proud to be the only domestic manufacturer of rail container wagons in the country, in addition to being the only provider of rail freight leasing services in the country.
“Today our company has one of the largest fleets in the country with approximately $500 million in assets, including 80 freight locomotives and 1400 wagons.”
Rail First provides leasing and manufacturing services to a variety of customers, including rail operators, rail infrastructure owners and managers, and cargo owners.
“These are some of the leading freight and logistics companies in Australia,” Lipman continued. “Rail First also plays a pivotal role in maintaining and overhauling rollingstock – both locomotives and wagons – for many Australian rail freight operators.”
Future freight growth
Lipman said Rail First was well-positioned to benefit from forecast growth in the domestic freight task, notably the haulage of containerised freight via well wagons which enable the double-stacking of interstate intermodal train services.
“To help customers meet demand capacity in the containerised market, Rail First recently developed a new 48-foot intermodal well wagon which recently completed successful operating trials between Penfield and Flinders Port in South Australia.
Rail First is therefore strategically positioned at the junction of solid underlying intermodal containerised volumes, strong forecasted TEU growth, and state and federal government programs and projects designed to help shift more freight from road-to-rail and create greater resilience and reliability in rail freight networks.”
In terms of containerised freight volumes in Australia, in 2022-23, the Bureau of Infrastructure and Transport Research Economics reported about nine million TEUs were exchanged at the five principal container ports in Melbourne, Port Botany, Brisbane, Adelaide and Fremantle.
“To add to our diverse and growing customer base, our company also builds and leases hopper wagons used in the haulage of loose bulk commodities and materials like iron ore, grain, and track ballast,” Lipman said.
New team offers new solutions
In recent years, new ownership and management at Rail First has helped create a new culture at the company – including more women in executive roles – with a core focus on offering market-leading long-term solutions to customers. Lipman said greater diversity in the six-member executive team, with each executive having 20 to 30 years of expertise in transport and logistics, rail supply chain operations, manufacturing, construction and/or commercials, is putting customer needs at the centre of every decision.
“For example, two new offerings called ‘Purchase to Long Term Lease’ and ‘Manufacture to Long Term Lease’ have been designed to provide Rail First customers with the option to use and maintain the latest modern freight locomotives and rail wagons, allowing customers to allocate capital to other projects and business initiatives.
“These new products provide Rail First customers with the ability to rapidly ‘flex up’ their locomotive and rollingstock capacity, notably when new rail haulage contracts come to market or renewal of existing contracts are in play. In contrast, overseas companies have limited ability to quickly respond to these market dynamics.
“As part of long-term leases, Rail First customers also benefit from having full control of assets and favourable pricing discounts for longer lease periods and increased volumes.”
Road-2-Rail
Rail First is the only Australian manufacturer of 40-foot and 48-foot two-pack intermodal well wagons which cater for double stacking of containers used in the national freight and logistics market.
Lipman said a key objective of the future Melbourne–Brisbane Inland Rail project is to facilitate the deployment of double-stacked freight trains, up to 1800 metres in length.
“Customer demand for well wagons on double stack trains is also increasing on the critical east-west rail freight corridors between Adelaide–Perth and Parkes–Broken Hill–Adelaide–Perth.
“Well-wagons provide Rail First customers with the capability to ‘move more boxes with less’. The increase in productivity and cost efficiency helps to shift freight from road-to-rail. In doing so, our sector can act as a powerful agent in helping to reduce traffic congestion, vehicle emissions, and road accidents.”
Another positive development in the interstate intermodal marketplace is the $1 billion-plus Network Investment Program jointly funded by the Australian Government and the ARTC.
“The Network Investment Program will help deliver critical upgrades to enhance the national rail network,” said Lipman.
“The result of these government-sponsored projects and funding initiatives is that Rail First and its customers will benefit from a broader reform agenda supporting rail freight networks and operations.”
Locally manufactured rollingstock
With the Australian Government implementing the Future Made in Australia and National Rail Manufacturing plans, Rail First is a prime example of what can be achieved in cut-throat global markets with a focused and skilled workforce.
Lipman said the benefits to Rail First customers of leasing locally manufactured rail rollingstock are many and varied, including the important role of helping to support and build critical trade and engineering skills in Australia.
“Rail First sources steel for the manufacture of its rail freight wagons from the BlueScope Port Kembla Steelworks via a South Australian company called Adelaide Profile Services,” she said.
“Local manufacturing provides shorter lead times in the customisation and delivery of rail rollingstock, reduced cost risks associated with having to import materials into Australia, less embedded carbon emissions than offshore manufacturing, and better visibility of safety standards and quality control during the production process for customers.”
Lipman said local manufacturing of rail rollingstock also generates skilled jobs in the Australian supply chain and helps to support other domestic industries like the steel sector.
“For example, it requires approximately 45 tonnes of steel and 1200 work hours (50 days) to manufacture a 48-foot well wagon. Today, the Rail First manufacturing and assembly facility at Islington, Adelaide employs 90 highly trained staff, including engineers, welders, fitters and turners, metal fabricators, electricians and spray painters.
“In total, Rail First employs 140 essential workers, including staff based in regional New South Wales in Goulburn, involved in the maintenance and overhaul of rail rollingstock.”
250th wagon delivered
In 2024, Rail First hit the milestone of manufacturing its 250th 40-foot intermodal wagon – with the ARTC taking delivery of the rail wagon at Islington.
Lipman said in line with the ARTC’s ongoing commitment to continuously maintaining and upgrading its vast interstate and Hunter Valley networks, the government enterprise is rolling out a fleet of 36 modern 40-foot ‘skel’ wagons from Rail First to haul long lengths of rail steel.
“A distinct advantage the ARTC saw in supporting the local manufacture of rail wagons is that the typical lead time for delivery of the final product is only six months.
“Overseas companies struggle to match both the speed and standards of our manufacturing and delivery processes.
“Additionally, Rail First provides its customers with strategically located maintenance facilities in New South Wales and South Australia for rollingstock needing repair or overhaul.”
New $100 million investment
Recently Rail First invested $100 million to acquire 12 new energy-efficient UGL CF44 freight locomotives for its customer base. Under a lease agreement with Rail First, Melbourne-based SCT Logistics, the country’s largest private freight operator, has taken delivery of six of the new CF44 locomotives.
Lipman said the locomotives are being used by SCT Logistics to help increase rail freight capacity between the east and west coasts and grow interstate volumes on north-to-south rail lines between Melbourne, Wodonga and Brisbane.
At the time of the announcement of the leasing deal, Managing Director of SCT Logistics Geoff Smith said the company is looking to an expanded fleet of new energy-efficient locomotives to help meet the country’s goal of net zero emissions by 2050, and the company’s decarbonisation objectives, which includes transitioning freight from road to rail.
“A key advantage to these locally manufactured locomotives is that SCT Logistics can continue expanding its distribution network, grow its freight volumes and remain focused on reliability,” Smith said.
The new Australian-made UGL CF44 freight locomotives have one of the most fuel-efficient engines in the market, with each locomotive capable of hauling a rake of wagons 1800 metres in length – equivalent to removing approximately 160 large trucks from the road.
“Transport is the third largest source of national emissions and rail is 16 times more carbon efficient than the road equivalent,” Smith said
.png){kind=small}
