AusRAIL, Market Sectors

`Strategic’ FCL runs rule over sale prospects

<p>Rail forwarder FCL Interstate Transport Services is up for sale again after being at the centre of Patrick Corp’s ultimately unsuccessful defence against Toll Holdings.</p> <p>The <em>Australian Financial Review</em> reported that a decision on a buyer could come as soon as this month. </p> <p>QR is believed to be among the parties interested in FCL, which would give the rail operator instant volume on its planned entry to the east-west corridor, and damage Toll’s Pacific National.</p> <p>Other buyers believed to be short-listed include Linfox, K&#38S Freighters and SCT. </p> <p>Patrick had attempted a $137m purchase in May 2005, which would have allowed it to compete head-on with Toll as a rail forwarder, as well as a rail operator. </p> <p>The Australian Competition and Consumer Commission vetoed the deal, but FCL still became a cornerstone of the Patrick defence after the stevedore negotiated an option to keep the sale alive as an alternative long-term vertical integration plan for Patrick. </p> <p>Observers say the results of the sale of FCL, the only major piece of the transport industry in play after Toll’s move on Patrick, will have a major influence on the future shape of the rail industry. </p> <p>&#8220It’s the last one out there that changes the way people do things,&#8221 a rail operator said.</p> <p>Both QR and SCT could use their own rail space to handle FCL business, while Linfox or K&#38S Freighters would have a choice of staying with Pacific National, or going to QR.</p> <p>Pacific National also operates out of FCL’s Parkes hub in western New South Wales, which could cause problems if the company changed hands. </p> <p>QR has already started intermodal co-operation with P&#38O in a joint venture to run Brisbane’s Acacia Ridge terminal, and the pair are believed to be looking at the Macarthur Intermodal Shipping Terminal in Sydney’s southwest. </p> <p>At the time of the planned sale to Patrick last year, FCL managing director Bill Gibbins said that margins in the transport industry had become too thin for smaller operators.</p> <p>Canterbury Partners is advising FCL on the sale.</p> <br />