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DalyWaters
Deputy Commissioner
Joined: Oct 31, 2006
Last Visited: Nov 28, 2008
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Posted: Tue Aug 12, 2008 10:18 am
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| Quote: | Problem is is a catch 22 situation. QR under cuts ASCIANO in CQ, ASCIANO undercuts QR in Hunter, but the issue will be some mines won't care and want a 2nd player and will pay for it.
I think the two players will enjoy the duopoly as well which is an interesting situation as the above rail equipment is not compatible between CQ and Hunter nor just about anywhere else in Australia. So in both cases if the minor player was to grow faster than the market growth you could see the existing players rolling stock parked up. I personally doubt this will happen as I believe the small player in both areas will not exceed 25-33% of the market there within 10years for this very reason. |
Can you see that Asciano, considering its huge debt, is really risking its survival with the move into Queensland coal.
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RTT_Rules
Chief Commissioner
Joined: Jun 23, 2004
Last Visited: Nov 30, 2008
Location: Gladstone Qld
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Posted: Tue Aug 12, 2008 12:38 pm
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| DalyWaters wrote: | | Quote: | Problem is is a catch 22 situation. QR under cuts ASCIANO in CQ, ASCIANO undercuts QR in Hunter, but the issue will be some mines won't care and want a 2nd player and will pay for it.
I think the two players will enjoy the duopoly as well which is an interesting situation as the above rail equipment is not compatible between CQ and Hunter nor just about anywhere else in Australia. So in both cases if the minor player was to grow faster than the market growth you could see the existing players rolling stock parked up. I personally doubt this will happen as I believe the small player in both areas will not exceed 25-33% of the market there within 10years for this very reason. |
Can you see that Asciano, considering its huge debt, is really risking its survival with the move into Queensland coal. |
No not really, coal is predictable, the tonnes are contracted on a take or pay basis (if I read it right). If it borrowed the money on a sound business case to buy the rolling stock and cover ramp up then the move will only benefit ASCIANO's cash flow and debt situation, remember its flogging off poorer assests so once these are gone and CQ coal is up and running ASCIANO should be healthier than today. Based on teh debt issues raised, its probably unlikely they are moving into CQ on below cost and hoping for the best.
Regards
Shane
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SteelPan
Locomotive Fireman
Joined: Jun 11, 2006
Last Visited: Sep 11, 2008
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Posted: Fri Aug 22, 2008 11:04 am
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A 9/10ths dead slug would have more commercial hunger than QR. QR Coal is entering the last decade of its life. And, as QR Coal is the only financial justification for the last old Govt Railways Dept, at long last it will be broken up. Translink to run a Metro service (and actually EXPAND it, assuming no QT involvement), the private sector to run those freight services rail can actually be viable in and govt to subsidise regional passanger rail. Either way, QR is living on borrowed time.
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ShowMeTheMoney
Banned
Joined: Jul 31, 2006
Last Visited: Nov 26, 2008
Location: Banned
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Posted: Fri Aug 22, 2008 3:58 pm
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The East Coast rail operations are going to find it hard to compete against the Mining Giants in WA when it comes to retaining top class Freight Drivers.
I can see boy Drivers starting on the East Coast, then resigning after a few years of training and going west for twice the money.
It don't matter if PN or QR are competing for coal, because keeping Drivers will be the big fight for both of them.
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PI_Dash_9
Locomotive Fireman
Joined: Jan 22, 2007
Last Visited: Nov 6, 2008
Location: Karratha, WA
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Posted: Sat Aug 23, 2008 9:00 am
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| ShowMeTheMoney wrote: | The East Coast rail operations are going to find it hard to compete against the Mining Giants in WA when it comes to retaining top class Freight Drivers.
I can see boy Drivers starting on the East Coast, then resigning after a few years of training and going west for twice the money.
It don't matter if PN or QR are competing for coal, because keeping Drivers will be the big fight for both of them. |
We don't get too many drivers from over the east coast coming to work for rio or bhp. They don't hire drivers any more for starters, they only contract labor hire companies to supply drivers for them on short term contracts. Most of these don't last long, the turn over rate is incredible, as it doesn't take long to work out that the extra money is not worth the s**t you have to put up with working for these a***holes.
Also the word is starting to get round. They are finding it so hard to get drivers to come and work for them that they are now hiring tram and suburban drivers with absolutely no experience (most have never seen inside a loco before) as locomotive drivers.
If you think QR is a lousy operator you should see these mining companies in action, if they had competition they wouldn't last 5 minutes.
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Heavy Hauler
Chief Train Controller
Joined: Dec 20, 2005
Last Visited: Dec 1, 2008
Location: 7 Underground
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Posted: Sat Aug 23, 2008 5:02 pm
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| PI_Dash_9 wrote: |
If you think QR is a lousy operator you should see these mining companies in action, if they had competition they wouldn't last 5 minutes. |
A mate who drives for a major company in PH and has previous experience with PNQ & QR has said the same thing.
sneer
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Controller
Deputy Commissioner
Joined: Sep 04, 2004
Last Visited: Nov 30, 2008
Location: Port Hedland W.A.
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Posted: Sat Aug 23, 2008 7:03 pm
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| PI_Dash_9 wrote: | | ShowMeTheMoney wrote: | The East Coast rail operations are going to find it hard to compete against the Mining Giants in WA when it comes to retaining top class Freight Drivers.
I can see boy Drivers starting on the East Coast, then resigning after a few years of training and going west for twice the money.
It don't matter if PN or QR are competing for coal, because keeping Drivers will be the big fight for both of them. |
We don't get too many drivers from over the east coast coming to work for rio or bhp. They don't hire drivers any more for starters, they only contract labor hire companies to supply drivers for them on short term contracts. Most of these don't last long, the turn over rate is incredible, as it doesn't take long to work out that the extra money is not worth the s**t you have to put up with working for these a***holes.
Also the word is starting to get round. They are finding it so hard to get drivers to come and work for them that they are now hiring tram and suburban drivers with absolutely no experience (most have never seen inside a loco before) as locomotive drivers.
If you think QR is a lousy operator you should see these mining companies in action, if they had competition they wouldn't last 5 minutes. |
I can't speak about Rio or FMG, but I do know the operators of the other mining company in the Pilbara are absolutley sh_t when it comes to running a railway and no one in their right mind would run their own business like these people run theirs, otherwise you would be bankrupt in no time. It is only the high prices of iron ore that is covering up the overrun operating costs of this railway, mainly contributed to mismanagement......nothing to be proud of, I can tell you.
All gave some, Some gave all
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bunza
Assistant Commissioner
Joined: Aug 26, 2005
Last Visited: Dec 1, 2008
Location: Gold Coast
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Posted: Tue Aug 26, 2008 4:20 pm
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If you don't mind me asking, where do they go wrong that the railway is run so shambolically?
Overstaffing?
Understaffing?
Poor organisation of staff and overtime being thrown every which way?
Poor fleet utilisation?
Maintenance?
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RTT_Rules
Chief Commissioner
Joined: Jun 23, 2004
Last Visited: Nov 30, 2008
Location: Gladstone Qld
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Posted: Wed Aug 27, 2008 12:38 pm
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| bunza wrote: | If you don't mind me asking, where do they go wrong that the railway is run so shambolically?
Overstaffing?
Understaffing?
Poor organisation of staff and overtime being thrown every which way?
Poor fleet utilisation?
Maintenance? |
I'll think if you look into it properly its a complex issue driven by
- record and unforcast demand for iron ore,
- Strong focus to meet customer demand rather than risk loosing their commanding positions in the iron ore market
- location and getting people to actually want to work there,
- the culture of the whole Pilbra mineral workers, ie 12mths is a longtermer in most roles, (Note: I've seen many come to the east coast and either love it or get itchy feet after 6-12mths as they are not used to same job for so long)
- Due to high turn over and limited HR selection due to location, there would be plenty of people doing roles that they probably normally would be doing had that role existed in say Sydney etc.
- Neither BHP or Rio are primarly rail operators, they are both miners and mineral processing companies. ie consider this iron ore boss of Rio has the one worlds largest tonnes and heaviest railways in his portfolio, coal, aluminium and copper don't.
- Rio has only just recently taken over and merged its "Pilbra Iron Ore" Division so still dealing with
- Also note Rio is trying to prevent a take over from BHP and the one way to do this is keep profits up as Rio's shareholders and QE2 will believe they are getting a better deal with Rio, than with BHP. BHP's reserves are not as good long term as Rio is part of the reason for the move.
For many of the above reasons both Rio and BHP are working on automating and remote operate mobile equipment and plant that is normally done from the job location. ie Rio is moving to driving trains from Perth, running coal processing plant in the Hunter in Newcastle or Sydney, likewise coal plants in CQ and iron ore plants WA from Perth or east coast. This helps reduce salary and over costs by reducing people in remote areas and they are hoping to reduce turn over. And yes reduce over numbers.
Anyway, my 2.2 cents worth, complex issue driven by profits and keeping both organisations in a strategic place in the iron ore market. Easy answer would be let world buy iron ore elsewhere, longterm that would not be good for the company nor employees as you become a market follower, not leader ie get dictated the price, not set it. But the current situtaion is not good either and to think operating costs is being covered up by high prices and ignored would be very very wrong. Rio is very concerned that record profits could easily become record losses if costs are not improved and prices dive suddenly due to high salaries and inefficent operating practices.
Over to Controller...
Regards
Shane
Last edited by RTT_Rules on Thu Aug 28, 2008 5:43 am; edited 1 time in total
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DalyWaters
Deputy Commissioner
Joined: Oct 31, 2006
Last Visited: Nov 28, 2008
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Posted: Wed Aug 27, 2008 12:52 pm
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What are you trying to say with all that?
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PI_Dash_9
Locomotive Fireman
Joined: Jan 22, 2007
Last Visited: Nov 6, 2008
Location: Karratha, WA
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Posted: Thu Aug 28, 2008 8:36 pm
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The biggest problem is as stated they are miners not rail operators. Rio ran their railway fine before the boom. Since the boom they have grown from a small railway with only eight trains running around in a relatively large rail system to a busy railway with thirty consists. The rail system has out grown management, both the General Manager and Operations Manager have no previous rail experience. It is time for Rio to admit that they are now out of their league and seek help from a rail operator. This could easily be achieved by sourcing some managers with experience in rail. They could easily afford to source them.
As far as this being the worlds largest heavy haul railway, they actually move more tonnes in Qld coal, and coal is about half the weight of iron ore. So QR are actually moving probably twice the volume of product compared to Rio.
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ParkesHub
Chief Commissioner
Joined: Jul 29, 2003
Last Visited: Nov 30, 2008
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Posted: Wed Sep 17, 2008 4:39 pm
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With Arseiano hitting a low of $3.13 today (down from $4.58 earlier in the week), you'd have to wonder if they can afford to proceed at the moment, at least until the stock market recovers. Maybe, the contracts to buy the infrastructure are already in motion?
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Controller
Deputy Commissioner
Joined: Sep 04, 2004
Last Visited: Nov 30, 2008
Location: Port Hedland W.A.
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Posted: Thu Sep 18, 2008 2:51 am
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| PI_Dash_9 wrote: | The biggest problem is as stated they are miners not rail operators. Rio ran their railway fine before the boom. Since the boom they have grown from a small railway with only eight trains running around in a relatively large rail system to a busy railway with thirty consists. The rail system has out grown management, both the General Manager and Operations Manager have no previous rail experience. It is time for Rio to admit that they are now out of their league and seek help from a rail operator. This could easily be achieved by sourcing some managers with experience in rail. They could easily afford to source them.
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You are right on the money there PI_Dash_9..both Rio and BHP are mining companies with a railroad attached to them and how you describe the Rio rail operations is the exact same as BHP. We have a rail manager who doesn't even know the names and locations of rail sidings...never had any railway experience before, but supposedly knows everything about it. The trouble with them getting good Railway Managers from other systems is that when these managers see what the place if like and what the higher management expect these managers to do, they just knock the jobs back, no matter how much money they are offered. One of the main problems with this mob here is that the manager's are not allowed to manage....HR and the lawyers call the shots
All gave some, Some gave all
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colinw_mk2
Station Master, Kippa-Ring
Joined: Sep 05, 2007
Last Visited: Nov 28, 2008
Location: Platform 1, Kippa-Ring
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Posted: Thu Sep 18, 2008 9:56 am
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| Controller wrote: | | HR and the lawyers call the shots |
Seems to be a universal trend. I've seen a lot of that in my various jobs over the last 20 years, although thankfully in my current job its mainly HR rather than lawyers.
I do not understand how HR get into such a dominant position in many corporations, when they have a such a narrow field of expertise and are are completely external to the company's operations and value-stream.
Dummy spit completed. Normal service has been resumed.
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Controller
Deputy Commissioner
Joined: Sep 04, 2004
Last Visited: Nov 30, 2008
Location: Port Hedland W.A.
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Posted: Thu Sep 18, 2008 2:36 pm
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| colinw_mk2 wrote: | | Controller wrote: | | HR and the lawyers call the shots |
Seems to be a universal trend. I've seen a lot of that in my various jobs over the last 20 years, although thankfully in my current job its mainly HR rather than lawyers.
I do not understand how HR get into such a dominant position in many corporations, when they have a such a narrow field of expertise and are are completely external to the company's operations and value-stream. |
I can't speak for other organisations, but I do know for a fact that HR and lawyers at the place I work, were brought in to try and smash the unions.
All gave some, Some gave all
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