ACCC seeks to take Acacia Ridge sale to High Court

The Australian Competition & Consumer Commission (ACCC) has sought leave to appeal to the High Court Pacific National’s purchase of Aurizon’s Acacia Ridge Terminal.

In May, the Full Federal Court, on appeal, found that the sale would not substantially lessen competition in the rail freight sector.

If the ACCC’s appeal is successful, it will be the first time that the High Court has heard a case with Australia’s merger laws.

Pacific National has criticised the ACCC’s pursual of the case, which had been heard and ruled upon twice at the Federal Court level.

“Pacific National was looking forward to completing the transaction and adding the Acacia Ridge Terminal to its network of efficient freight terminals, and this will once again be delayed while the ACCC seeks to further appeal what Pacific National considered was a comprehensive and correct decision by the Federal Court,” said a Pacific National spokesperson.

Aurizon has said in a statement that it would continue to operate the Acacia Ridge terminal and expected the leave application to be heard and decided before the end of 2020.

The ACCC has been pursuing the case as it sees the case as a test of Australia’s merger laws. In addition, the ACCC is attempting to seek a finding as to whether a court can accept an undertaking after finding a proposed acquisition is anti-competitive.

“We are seeking special leave to appeal to the High Court because it is vital for Australian businesses and consumers that competition laws are effective in protecting the competitive process,” said Simms.

Pacific National had offered to make an access undertaking which the Federal Court had initially accepted. On appeal the Full Federal Court found that the undertaking was not needed.

Simms said that the Full Federal Court’s decision did not recognise the impact of Pacific National’s purchase of the Acacia Ridge terminal.

“We believe that the Full Federal Court’s decision does not recognise the full impact of the proposed acquisition on competition in this vitally important industry.”

ARA

ARA pushing for rail to take a greater share of Australia’s growing freight task

The Australasian Railway Association (ARA) will conduct a research program to grow rail’s share of freight, improve productivity in the sector, and increase rail freight infrastructure investment.

The project is part of the ARA’s strategic plan for rail freight and ports, released on June 25.

CEO of the ARA, Caroline Wilkie, said that there is the need for more freight to be carried by rail.

“A strong and resilient freight network makes the best use of all available modes of transport and there is certainly a case for greater use of rail in the future.”

To get more freight onto rail, the ARA’s rail freight and ports executive committee will promote the value of rail to policy and decision makers, provide-evidence based findings that can guide investment, and assist rail operators to improve their service offering.

“A truly national approach will be essential to make sure we get the most from rail investment and create stronger connections between our cities and regions,” said Wilkie.

The strategic plan outlines clear benefits to shifting freight to rail, noting that a one per cent improvement in freight productivity could generate $8-20 billion in savings for the national economy over 20 years.

In addition, one freight train can replace 110 trucks off roads, and rail is nine times safer than road freight.

Communicating these benefits will be key as Australia’s freight task is expected to grow.

“Our national freight task is expected to rise 35 per cent by 2040 and rail will play a critical part in meeting this demand,” said Wilkie.

Work by the ARA will progress in two phases. The first will identify issues and establish the benefits of rail freight. This will be done by reviewing Australia’s supply chain, to see why freight rail has lost mode share, and updating the 2017 Value of Rail Report to demonstrate the positives of rail.

The second phase will put specific guidance on how to get more freight onto rail into the hands of government and industry. The rail freight and ports executive committee will produce white papers for industry and for government to make the case for greater rail freight.

Alongside this work, the ARA will continue to advocate for rail through policy submissions and involvement in policy development.

Woolworths

Woolworths commits to Moorebank distribution centre

Woolworths has agreed to be a new, major tenant at the Moorebank Logistics Park in south west Sydney.

The supermarket giant has partnered with Qube, which is the manager of the Moorebank Logistics Park, to build a national and regional distribution centre across over 75,000sqm.

Qube managing director Maurice James said that a key advantage of the site was its rail connection.

“We’re delighted Woolworths has recognised the significant competitive advantages available to tenants at the Moorebank Logistics Park,” he said.

“The benefits of railing containers direct from Port Botany to a terminal co-located with warehousing across a site the size of the Sydney CBD will deliver Woolworths time and cost efficiencies.”

The recently developed Moorebank Logistics Park has a direct rail link to Port Botany and there are plans to develop an interstate rail terminal in the future. When complete, 1.5 million TEUs will be able to be transported between Port Botany, Moorebank, and the national rail freight network.

Moving more freight via rail will reduce heavy truck movement on Sydney roads, with Woolworth’s estimating that rail access will remove least 26,000 truck movements in NSW per year.

Australian Logistics Council CEO Kirk Coningham said the agreement between Qube and Woolworths showed the benefits of investing in rail.

“ALC has been a long-time advocate for the development of the Moorebank Logistics Park and its direct rail connection to Port Botany. This allows more freight to be moved via rail, helping to alleviate road congestion, which in turn delivers environmental benefits through reduced emissions.”

According to Qube, rail from Botany to Sydney’s south west enables containers to be delivered to the warehouse, unpacked and dispatched on the same day as the container is unloaded at the port.

Woolworths Group CEO Brad Banducci said that locating at Moorebank would improve the company’s operations.

The new facilities will help us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling.”

The move to Moorebank is a consolidation of Woolworth’s distribution sites at Yennore, Mulgrave, and parts of Minchinbury.

Both the national and regional distribution centres are subject to NSW government planning approval and are expected to open in 2023 and 2024, respectively.

Port of Melbourne scheme

Rail freight competitiveness scheme gets a $4m extension

The Victorian government has boosted a scheme that helps to shift freight from road to rail with a $4 million injection.

The funding will extend the Mode Shift Incentive Scheme (MSIS) to 30 June 2021, and takes the total investment in the scheme to $24m over six years.

According to the Victorian government, the MSIS has already taken the equivalent of 28,000 truck trips off Victorian roads and onto rail.

“We’re moving more freight more efficiently and keeping our state connected by reducing rail costs and making it easier to get Victorian products to our ports,” said Minister for Ports and Freight Melissa Horne.

The MSIS provides incentives to freight operators to move more freight via rail. Current recipients of the scheme are Linx Portlink on the Shepparton corridor, Wimmera Container Line on the Horsham corridor, Westvic Container Export on the Warrnambool corridor, and Seaway Intermodal on the Mildura corridor.

Horne said the scheme improves the cost competitiveness of freight.

“This scheme benefits the community by getting trucks off roads which locals use every day and supporting industry through cost-effective movement of freight.”

Chair of the Freight on Rail Group, Dean Dalla Valle welcomed the Victorian government’s decision.

“A big thank you to Minister Horne for listening to industry and giving the scheme a critical lifeline during these unprecedented and uncertain times,” Dalla Valle said.

“The benefits of the scheme stretch well beyond regional freight businesses; the scheme helps to take trucks off local and regional roads, driving better road safety outcomes for the community, and is an investment in the future of regional rail freight jobs.”

Dalla Valle said the extension of the MSIS would benefit regional Victorian businesses.

“Australian regional exporters operate in highly competitive international markets and ending this scheme would have driven up freight costs and severely impacted many regional businesses,” he said.

“By continuing the scheme, the Andrews Government is helping to protect many regional jobs across the freight supply chain and putting the state’s economy on the right track towards recovery.”

The MSIS is one of a number of initiatives to ensure that Victoria’s growing freight task is handled by rail. By 2051, freight volumes in the state are expected to triple, and the government is also investing in improving access to the Port of Melbourne, building new intermodal terminals as Truganina and Beveridge, and funding the Port Rail Shuttle.

Achieving sustainability

Australia’s largest rail infrastructure project, Inland Rail and Australia’s largest rail freight operator, Aurizon, share how they’re meeting sustainability targets.

Successful management of sustainability- related targets requires a collaborative effort. Once the 1,700km rail network is complete, Inland Rail will be the backbone of Australia’s national freight rail network. The scale and the significance of the project creates an opportunity to set new benchmarks and standards in environmental and socio- economic performance.

Similarly, as the operator of a rail network distributed across regional Australia, Aurizon’s has the potential to contribute to sustainability in the communities in which it operates. The company’s sustainability strategy sets out that it aims to achieve resilience and resourcefulness through the transportation of bulk goods and commodities. While environmental strategies are an essential focus for both Aurizon and Inland Rail’s network, social sustainability is key facet of their approach to sustainability.

Most directly, social sustainability is promoted by both network managers in the design, maintenance and construction of rail track and associated infrastructure. As Inland Rail is transitioning from the design phase to construction, the company is primarily focused on benefiting regional towns along the alignment over the next stages of the project. Meanwhile, Aurizon is ensuring it is sustaining employment and enhancing businesses in the non-metropolitan areas of its rail network.

Creating opportunities for the development of a skilled local workforce through construction and operation is helping to deliver key national priorities for infrastructure and economic policy. In Inland Rail and Aurizon’s respective rail transport system, linking communities and strengthening the rail and national supply chain industries go hand in hand.

INLAND RAIL’S SUSTAINABLE PRIORITIES
Richard Wankmuller, Inland Rail CEO, stated in last year’s annual sustainability report that Inland Rail’s focus on social, environmental, and economic sustainability ensures the organisation is continuously striving to deliver the best possible outcomes for communities and the natural environment. Wankmuller acknowledged in the 2018-19 report that the once-in-a-generation rail project is only in its early phase, enabling Inland Rail to provide a unique opportunity to influence the effectiveness, benefits, and outcomes from its model for future rail infrastructure.

With the first stage of construction of the 103km Parkes to Narromine project expected to be completed in mid-2020, the billions of dollars invested to create the Brisbane to Melbourne rail freight network is also an investment for local communities and affected landowners to mitigate long-term economic and environmental impacts and create ongoing community benefits. With the separate sections of Inland Rail’s alignment at under varying stages of development, going forward, the sustainability program will commence annual public reporting of environmental and socio- economic benefits realised during the design and construction of the program.

According to Rebecca Pickering, Inland Rail director of engagement, environment, and property, Inland Rail is aiming to establish a new sustainability benchmark for environmental and socio-economic performance for Australian Rail Track Corporation (ARTC) operations and the rail industry more widely. “Our engineers don’t need prompting about Inland Rail’s sustainability opportunities. Largely in this design phase, the team is driving smarter and innovative strategies that have never been seen in the industry before,” she said.

Pickering credits the wider strategic business framework of Inland Rail for empowering regional and local communities to take advantage of the thousands of jobs and millions of dollars of procurement that will be generated during construction of the Inland Rail alignment. “To achieve our vision, we need to be innovative, agile and global in our thinking. Sustainability provides a framework to drive and support this culture,” she said.

Pickering said the environmental, social, and cultural outcomes are of equal importance to Inland Rail’s economic objectives. “We’ve already achieved success in managing impacts and creating connectivity in regional communities. A major chunk of recent success is the ability to provide sustainable jobs, which has been crucial during the current state of the economy,” she said. At the peak of construction, Inland Rail will create more than 16,000 direct and indirect jobs. An additional 700 ongoing jobs will be created once Inland Rail is operational. Pickering said $89 million has been spent with local businesses on-top of wages and every stage of construction is another opportunity to improve engagement and achieve ongoing sustainability.

“Not everything is set in stone, it’s a changing landscape so it’s super exciting and inspiring to connect so many regional communities. Recycling of materials, further consultation, and exceeding sustainability requirements are a focus as our strategies evolve,” Pickering said.

AURIZON’S SUSTAINABLE FUTURE
Aurizon’s reporting of its environmental, social, and financial sustainability has given an insight into how the ASX-listed company is managing the impact of a widely dispersed railway network throughout central Queensland. According to its 2019 sustainably report, Aurizon is committed to continuing its strong track record in supporting a highly efficient and globally competitive supply chain for Australian commodity exports, especially for coal. Aurizon takes a direct approach to reporting environmental, social and governance (ESG) disclosures to stakeholders with the publication of its annual Sustainability Report. In August 2019, Aurizon maintained a ‘Leading’ rating for the fifth consecutive year from the Australian Council of Superannuation Investors (ACSI) for corporate sustainability reporting in Australia. Having received this rating for over four consecutive years, Aurizon has again been considered a ‘leader’ by ACSI, along with 45 other ASX200 companies.

Andrew Harding, Aurizon CEO and managing director said it’s important that the company creates a business that is not only strong commercially and performs well for customers, but also plays a positive role in the regional communities. “It is a genuine demonstration that while we develop our business and operations to ensure the company’s ongoing success, it is the strength, resilience and resourcefulness of our people that are key to our sustainability,” Harding stated in the opening to Aurizon’s most recent sustainability report.

An Aurizon spokesperson said the company’s current priority and focus is sustainably managing the business through the COVID-19  pandemic.“Understanding our material impacts is necessary to develop our strategy and operate sustainably, and that addressing these impacts is key in creating sustainable value for our stakeholders,” the spokesperson said.

Sustainability is central to Aurizon’s response to the current challenging times. “Our core value is safety, and Aurizon has implemented a range of proactive and practical measures to protect the health and safety of employees as well as provide business continuity to our customers. We cannot achieve operational performance objectives or maintain our social licence to operate unless we ensure the safety of our employees, our contractors, and our communities,” the spokesperson said.

Aurizon reset its strategic framework in 2018. Since the re-modelling to ensure the sustainable success of the business, the new Strategy in Action framework has been driving focus in Aurizon’s short-term activity within a framework of what is required for long-term growth and success. “We strive to ensure that our sustainability framework reflects significant economic, environmental, and social priorities that may influence strategic decision-making or have significant impacts on our business and our key stakeholders. As such, we continuously assess the material issues that affect our business, our stakeholders, and our operating environment,” the spokesperson said.

In taking a broad approach to sustainability, both Aurizon and Inland rail demonstrate the importance of resilient freight rail transport networks to the ongoing vitality of regional communities.

Northland Line

Upgrades begin to allow more freight on Northland Line

Major works on New Zealand’s Northland Line have begun to enable more freight to be carried by train and faster passenger services.

The $204.5 million worth of works include replacing bridges, improving tunnels, and upgrading the rail line to Whangarei. Once complete, hi-cube containers will be able to be pulled on the Northland Line, enabling more freight to be carried by rail.

Services have been halted between Swanson, west of Auckland and Whangarei to allow for track occupancy and major civil works. Over the route, five bridges will be replaced and tracks will be lowered in 13 tunnels.

KiwiRail chief executive Greg Miller said that works are hoped to be completed by the end of the year.

“The work will be completed in stages, with the first objective being able to carry hi-cube containers through the tunnels between Whangarei and Auckland by Christmas.”

“Being able to carry hi-cube containers will also allow freight that can currently only come in and out of Northland by road, to instead go by rail. That additional transport option could help cut transport emissions and reduce the number of trucks on the roads,” said Miller.

Miller said that the delayed start was due to restrictions imposed by coronavirus (COVID-19).

“While our teams were able to continue design and planning work during the lockdown, COVID-19 halted most work on the ground. We’ve also been waiting on the arrival of specialist track laying equipment which has been held up by pandemic disruptions,” he said.

“This type of work can only be done while the line is shut. I regret the inconvenience for our freight customers and thank them for their patience. Once the line is upgraded, we will be able to offer more reliable train services to better meet their needs.”

Local businesses will be involved in the upgrade works, with Northland subcontractors tapped to provide supplies and carry out works.

“Local firm United Civil Construction has the contract to replace two of the bridges, all the ballast materials for the track upgrades are being supplied by Clements in Whangarei, and Busck, also in Whangarei, are supplying thousands of concrete sleepers,” said Miller.

In 2021, works on the Northland Line will continue, including the reopening of the line between Kauri and Otiria and the construction of a container exchange at Otiria.

Inland Rail to grow northern NSW by $160m in first 10 years

An in-depth report on the benefits of Inland Rail to northern NSW has found that the rail line will support $160 million worth of value of goods and services across 16 local government areas in its 10th year of operations.

In particular, sectors including food, grain, transport, and logistics are expected to benefit from additional investment once Inland Rail begins operating from Goondiwindi to Narromine.

The findings are part of an ongoing study conducted by accounting firm EY on behalf of the Department of Infrastructure, Transport, Regional Development and Communications into the regional opportunities that will be derived from Inland Rail’s operation. Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said that the report should motivate industry to invest in regional NSW.

“Inland Rail will provide benefits in regional communities for decades to come so we want to see industries expand outside metropolitan areas by taking advantage of the significant infrastructure we are delivering, lower land costs, resources and the ready and willing regional workforce.”

An overall report was released in March, which found that the rail line will deliver a boost of $11.5 to $13.3 billion in the first 50 years of operation.

The Northern NSW Regional Intelligence Report delves into the particular benefits that northern NSW will receive from Inland Rail. Already, the region contributes $11.5bn in gross value to the state and handles 50 million tonnes of freight a year.

In terms of jobs, the report estimates that 5,000 jobs will be created in construction across NSW, and by the 50th year of operations 360-470 full time equivalent positions will be created just in northern NSW.

In investment terms, construction will bring $2.5bn in gross state product to NSW, and by the 50th year of operations $320-360 million in gross regional product would be added to northern NSW.

Finance Minister Mathias Cormann said that the project would enable efficient access to global markets.

“Giving businesses and communities along Inland Rail’s path access to fast, efficient and cost-competitive freight transport will connect them to new markets and will drive new investments from industries looking to expand in our regions.”

The report highlights some investments that are currently underway. These include the Northern NSW Inland Port, which is taking $300,000 of NSW government funding for the Narrabri Shire Council to undertake an optimisation study for an intermodal facility near the Inland Rail route. Other potential investments include the expansion of food and livestock processing and growth in mining investment.

Federal member for Parkes Mark Coulton said that Inland Rail will empower regional industries.

“The time is now for industry to start planning for the coming decades and strategically position themselves to build resilience in their supply chains and take full advantage of the huge benefits Inland Rail is going to offer.”

“Inland Rail could be pivotal in shaping and sustaining long-term economic growth and prosperity in the regions along the corridor,” write the authors of the report. “With the right policy settings, Inland Rail can deliver economic growth through two response pathways – supply chain efficiencies and value chain growth.”

Grain

Bumper winter grain harvest sparks calls for rail upgrades

A forecast record grain crop is leading to calls for improvements to the regional freight network in Victoria.

Advocacy group Rail Futures Institute has identified the Sea Lake and Manangatang lines, the Korong Vale group, as ripe for improvement to shift a bumper winter crop.

“We are urging a fast allocation of funding so that these labour-intensive works can be actioned between July and October of this year so that this important freight link can again be made available to handle the forecast bumper grain harvest from November 2020,” Rail Futures Institute president John Hearsch said.

According to the Australian Bureau of Agriculture and Resource Economics and Sciences, this year’s winter crop is forecast to reach 7.4 million tonnes, 16 per cent above the ten year average to 2018-2019 and double last year’s crop.

With a limited capacity on freight lines between Dunolly and Ballarat, extra grain may have to be hauled by truck, costing growers.

“In offering a second option for Korong Vale Group grain trains to go south, the number of broad gauge trains proceeding via Dunolly and Maryborough can be reduced, releasing more train paths for standard gauge trains from the Mildura and Murrayville lines, which can only reach Geelong, Portland, or Melbourne via Ararat and so must travel through Maryborough,” said Hearsch.

Rail Futures Institute points out that the 41km of track in need of an update involves replacement of sleepers, repairs to areas damaged by floods in 2007 and 2011 and reactivation of the rail junctions at Inglewood and Eaglehawk. The relatively minor improvements could also be completed using locally sourced materials, said Hearsch.

Other benefits would include the potential extension of regional passenger services from Bendigo to Marong and a connection between Bendigo rollingstock manufacturing and repair workshops and the rail network in north-western Victoria.

The Victorian government is currently finalising an updated businesses case for the stalled Murray Basin Rail Project, which intended to upgrade the Korong Vale group lines. Once complete, the business case will be presented to the federal government for consideration for funding further stages.

In a changed world, freight sector shows its agility

The Australian Logistics Council’s CEO, Kirk Coningham, explains how the industry has been on the front foot during a time of crisis.

Like every other industry, Australia’s freight and logistics sector has spent recent weeks grappling with the realities of doing business in a changed world.

While for many this has meant transitioning to working from home arrangements, contemplating shifts from bricks and mortar retail arrangements to online sales in retail, and a changed focus for hospitality businesses towards takeaway and delivery sales, the challenge for this sector is somewhat different.

The simple reality is this; those on the front line of Australia’s freight logistics industry can’t work from home. Our ports, stevedores, road, rail, and air freight operators are working tirelessly to keep supply chains flowing and make sure Australian communities can access the goods they need day-to-day.

As challenging as the COVID-19 crisis is, it would be far worse without the dedicated support and service offered by those working in Australia’s logistics industry.

All levels of government have made it clear that freight transport and logistics remain an essential service. In turn, this means that those who are working around the clock to support households and communities at this challenging time deserve the strongest levels of support and flexibility from governments and from the wider community.

In the difficult circumstances that all of us are currently enduring, the health and security of our workforce must remain paramount.

As instances of panic buying occurred in the early days of the COVID-19 event, it was distressing to hear instances of transport workers and in-store retail personnel being accosted by angry consumers.

The current situation is having an impact on the day-to-day lives of all Australians – and perhaps it is inevitable that this is causing frustration and irritation for some. However, taking those frustrations out on delivery drivers or retail workers is completely unacceptable.

Far more positive has been the determined and collegiate way in which all parts of the supply chain have worked effectively to address challenges as they have arisen, to ensure that freight can continue getting to the places it needs to go, efficiently and safely.

This has included working to remove barriers that prevented overnight deliveries to supermarkets and retail outlets such as noise curfews that stopped heavy vehicle access and the use of loading docks. Industry worked quickly with state and territory governments around Australia to either remove these curfews or have their enforcement suspended for the duration of the COVID-19 crisis. This helped stock levels to recover and reduced the occurrence of panic buying.

The decision of several state and territory governments to effectively close their borders posed significant potential threats to the efficiency of freight movement on both road and rail.

Again, it was impressive to see the way that representatives of both modes set aside commercial considerations and worked collaboratively with industry groups to ensure restrictions on cross-border movement caused as little delay to freight movement as possible.

Perhaps the most difficult aspect of the COVID-19 situation is the uncertainty over its duration. Naturally, this causes anxiety in the community and makes business planning especially difficult.

However, what is certain is that in addition to ensuring the community can continue to access essential goods, the freight and logistics sector also has a vital role to play in providing economic opportunity.

Already, there is evidence of some pick-up in consumer demand and economic activity in China, which will remain a critical export market for Australia.

As we look to sustain Australian businesses and create employment opportunities, our freight sector will be essential in supporting our exporters’ efforts to get their goods into recovering markets. Governments and local communities must understand the importance of their task as part of Australia’s economic recovery, and provide every support possible to help our workforce achieve it.