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FCL Transport: NSW government must act to make Blayney rail services sustainable

Updated Thursday, 29 July, 2004

In excess of 100 extra trucks will be forced to cross the Blue Mountains every day, unless the NSW government acts decisively to avert the cessation of rail services from Blayney to Sydney¡¦s Ports, according to national transport operator, FCL Interstate Transport Services.



FCL Blayney, Australia¡¦s largest inland container port, competitively services multinational export industries, transporting 55,000TEU a year to Sydney¡¦s ports.



Since 1994, FCL has invested more than $10 million in its Blayney rail operation, and a total of more than $21 million in Central West NSW.



On 20 July, Pacific National (PN) announced that it would cease its port container services in and out of Port Botany, to divert its locomotive and wagon assets elsewhere.



As a result of negotiations instigated by FCL Managing Director Bill Gibbins late last week, PN CEO Stephen O¡¦Donnell granted a moritorium on both the closure of services of 1 October, and in the meantime a proposed 66% hike in linehaul rates on 1 August.



PN and FCL came to an agreement that neither the closure of the service, or the rate increase, would be implemented without 30 days of notice.



Mr Gibbins agreed to work with PN to endeavour to bring about a cost effective scheduling of rolling stock, enabling a reasonable return on investment for both parties.



Mr Gibbins said first and foremost the NSW Government needs to address rail track access and curfew restrictions that result in a 580km round trip between Blayney and Sydney taking longer than 24 hours.



¡§People have got to recognise the lesser of two evils,¡¨ said Bill. ¡§One train at night or 100 trucks all night long on the Great Western Highway to Sydney,¡¨ said Mr Gibbins.



¡§Presently, two separate sets of wagons and locomotives are required to maintain a daily service, when only one set is required if these issues are addressed.



¡§In excess of $10 million of rolling stock assets is currently required to meet Blayney¡¦s current service requirement, which is not sustainable,¡¨ he said.



Mr Gibbins said since the sale of Freightcorp to private interests, all government Community Service Obligation (CSO) subsidies have been phased out.



¡§As a result of no CSO subsidies, transport rates need to reflect the real cost of running trains. This is going to result in increases of around 20-25%, bringing rail rates almost level with those of road rates,¡¨ said Mr Gibbins.



¡§However, to cap rate increases at 20-25%, at least $500,000 will need to be invested in extending the Blayney Terminal to accommodate 100TEU trains.¡¨



Mr Gibbins said critical to the keeping Central West NSW freight on rail is FCL customers¡¦ acceptance of rate increases.



Bill Gibbins said customer acceptance was not implausible, as the Blayney terminal enables exporters to interface with shipping companies on a more ¡¥user-friendly¡¦ basis than road transport.



¡§Once they get over the initial shock, I am hoping they will still see value in rail,¡¨ said Mr Gibbins.



¡§Exporters face any number of production hiccups that can delay or stall container loading at the last minute. A local supplier can call a halt to the proceedings immediately at little or no cost. However, If 50 trucks are half way across the Blue Mountains, and a similar number are on site waiting to be loaded, the cost of demurrage on these vehicles will be prohibitive.



¡§I hope all of the requirements can be met,¡¨ said Bill. ¡§If not, FCL¡¦s fall back is to cancel its wharf trains, and service our remaining customers by road. The result will have a significant impact on the environment, and on business investment in the bush.¡¨



Mr Gibbins said FCL would still service the Cadia mine trains, as Newcrest Mining Ltd had already negotiated an acceptable rate increase with PN.



¡§FCL will continue to operate in Blayney, regardless of the outcome,¡¨ said Bill. ¡§Its just a matter of being a predominately rail operator, or not,¡¨ he said.



In 2003, FCL won an award for ¡¥Energy Efficiency Best Practice¡¦ from the Australasian Fleet Managers Association, for minimising fleet emissions by transporting predominately by rail.





BACKGROUND



FCL Interstate Transport Services is Australia¡¦s largest privately owned rail freight forwarder with an annual turnover in excess of $160m.


Operating for thirty years, and one of the nation¡¦s 'Top 5' transport companies, FCL is a pioneer in interstate containerised transport and is consistently re-investing profits into extending its branch network, developing leading-edge equipment fleet, and customised transport and logistics solutions to meet customers needs.


Last year FCL handled more than one million tonnes of freight.  



WHERE DOES FCL OPERATE?


Headquartered in Victoria, FCL has an expansive national network, with 16 strategically placed branches and agents located close to railheads, ports and customers in all capital cities, including regional offices in Central West NSW (Parkes, Blayney, Orange), North Queensland (Townsville) and Tasmania (Bell Bay) and the Northern Territory (Darwin, Alice Springs, Katherine, Tennant Creek).



FCL BLAYNEY¡¦S KEY CUSTOMERS INCLUDE:


„h Masterfoods (Bathurst)


„h Nestles (Blayney)


„h Electrolux (Orange)


„h Henning Hartas (Oberon)


„h Best Western Grain




Media Enquiries:



Mark Nunan


Communications Manager


FCL Interstate Transport Services Pty Ltd

P: (03) 9396 9052


E: markn@fcl.com.au