train tracks
 
BRISBANE, QUEENSLAND, AUSTRALIA – Pacific National has entered into agreement with Aurizon to purchase the Acacia Ridge Intermodal Terminal in Brisbane, Queensland, Australia.

The Acacia Ridge Terminal has both a standard gauge terminal (supporting interstate transport), which was used by both Pacific National and Aurizon, and a narrow-gauge terminal (supporting transport within Queensland) used only by Aurizon. Pacific National’s Queensland rail operations currently use a separate terminal at Tennyson, which is owned and operated by Pacific National.

This transaction includes the transfer of 30 Aurizon employees, as well as assets, commercial and operational arrangements.

“The Acacia Ridge Terminal supports Pacific National’s (PN) goal of providing consistent and reliable freight rail services to our customers,” said Dean Dalla Valle Pacific National’s chief executive officer (CEO).

He said the Acacia Ridge Terminal supplements Pacific National’s national network of terminals and provides security for Pacific National’s interstate operations out of the terminal for the long
term.

Separately Pacific National has signed a binding agreement to buy the Aurizon Queensland Intermodal business as part of a consortium with Linfox.

This transaction includes the transfer of approximately 350 Aurizon employees, as well as assets, commercial and operational arrangements to the Linfox and Pacific National consortium.

The parties are aiming to finalize these transaction by the end of fiscal year 2018, both transactions are subject to:

Approval by the Australian Competition & Consumer Commission

Approval by the Foreign Investment & Review Board

“Queensland Intermodal supports PN’s strategic objective to grow in important markets and allows for PN to offer new northbound services and southbound services within Queensland on day one,” Dalla Valle said.

The ACCC has raised preliminary competition concerns about Pacific National’s proposed acquisitions of Aurizon’s Queensland intermodal freight haulage business and intermodal rail terminal at Acacia Ridge in Brisbane.

Currently, Pacific National and Aurizon are the only providers of intermodal rail linehaul services in Queensland and compete closely with each other.

Pacific National is the largest provider of intermodal rail freight services in Australia. Aurizon previously also competed with Pacific National and SCT on interstate routes.

The interstate rail network is a standard gauge rail track, while the rail network north of Brisbane is narrow gauge and requires specific locomotives and wagons. supply chain solutions to a diverse range of customers.

Rod Sims ACCC chairman
Rod Sims, ACCC chairman
"Aurizon’s decision to sell its Queensland intermodal operations and the Acacia Ridge Terminal to its closest competitor, while shutting down its remaining intermodal business, will fundamentally change this market,” said Rod Sims, ACCC chairman. “We are concerned about the impact on competition in the freight industry." 

The ACCC has published a Statement of Issues outlining concerns about the reduction of intermodal rail linehaul providers from two to one in Queensland, raised barriers to entry for rail companies if Pacific National controls the Acacia Ridge terminal, and the reduction in options for freight-forwarders on most interstate rail routes from two to one.

Although freight services company SCT Logistics will remain on interstate rail routes, it is vertically integrated with freight forwarding and does not generally haul many containers for other freight forwarders.

The ACCC has received extensive feedback from interested parties who say there is no close alternative to rail for many types of freight, particularly to and from far north Queensland.

"We are concerned the proposed acquisitions would lead to increased prices and reduced service for freight hauled between Brisbane and Far North Queensland," Sims said.

The ACCC is also concerned about Pacific National’s proposal to acquire the Acacia Ridge Terminal.

"The Acacia Ridge Terminal is an important infrastructure asset, and would be a key component in the strategy of any potential supplier of intermodal rail freight that wants to compete with Pacific National," Sims said.

Pacific National has offered a section 87B undertaking that it would not discriminate in providing access to the Acacia Ridge Terminal if the acquisition went ahead.

The ACCC is consulting on the proposed undertaking as part of the Statement of Issues consultation.

"The ACCC’s preliminary view is that a section 87B undertaking won’t resolve the concerns arising from the dominant provider of intermodal rail linehaul services nationally also owning the Acacia Ridge Terminal," Sims said.

The ACCC invites further submissions from interested parties in response to the Statement of Issues by April 3. The ACCC’s final decision is expected to be announced on May 24.