Aurizon announces end of its Wilmar sugar contracts

 
  Sulla1 Chief Commissioner

However, for the best part of the last decade, CFCLA has been buying new build equipment, so acquiring "Queensland ready" rollingstock would not have been difficult...it just appears it hasn't been on the lease company's radar.


Has this new build equipment been BG or SG?

The Aurizon grain and cattle fleets regularly transit between the more restricted South West network and QR's other mainlines, plus the Aurizon network. The South Western and Western mainlines and branches are mostly restricted to 15.75-tonne axle loads (16-tonnes to the western mines and 10.75-tonnes between Charleville and Quilpie). This means all of Aurizon's and PN's 20-tonne axle load rollingstock and locomotives can't be used west of Brisbane. Aurizon's 2800 class are also out of gauge as well as too heavy to venture west of Progress Rail's Redbank Workshop.


What are the particular restrictions on loading gauge - is it just the Toowoomba tunnels?
james.au
One of the 2007-built VLs is on broad gauge...I'm not sure about the wagons, but I imagine bogie exchanging new-build standard and broad gauge container and grain wagons has occurred. Those same container wagons could probably also be used in Queensland if bogies were acquired, but the grain wagons couldn't if they haven't been designed to suit QR's kinematic envelope. The conversion of the PN wagons to narrow gauge has been ongoing since October last year, and so far only seven have been completed - so its not necessarily quick and easy to convert wagons for use in Queensland if an opportunity suddenly appears.

The Toowoomba Range tunnels are the major impediment west of Brisbane, but some bridges may cause problems for maxi-cube containers. The restricted axle loads still in place don't help either.

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  fzr560 Chief Train Controller

However, for the best part of the last decade, CFCLA has been buying new build equipment, so acquiring "Queensland ready" rollingstock would not have been difficult...it just appears it hasn't been on the lease company's radar.


Has this new build equipment been BG or SG?

The Aurizon grain and cattle fleets regularly transit between the more restricted South West network and QR's other mainlines, plus the Aurizon network. The South Western and Western mainlines and branches are mostly restricted to 15.75-tonne axle loads (16-tonnes to the western mines and 10.75-tonnes between Charleville and Quilpie). This means all of Aurizon's and PN's 20-tonne axle load rollingstock and locomotives can't be used west of Brisbane. Aurizon's 2800 class are also out of gauge as well as too heavy to venture west of Progress Rail's Redbank Workshop.


What are the particular restrictions on loading gauge - is it just the Toowoomba tunnels?
One of the 2007-built VLs is on broad gauge...I'm not sure about the wagons, but I imagine bogie exchanging new-build standard and broad gauge container and grain wagons has occurred. Those same container wagons could probably also be used in Queensland if bogies were acquired, but the grain wagons couldn't if they haven't been designed to suit QR's kinematic envelope. The conversion of the PN wagons to narrow gauge has been ongoing since October last year, and so far only seven have been completed - so its not necessarily quick and easy to convert wagons for use in Queensland if an opportunity suddenly appears.

The Toowoomba Range tunnels are the major impediment west of Brisbane, but some bridges may cause problems for maxi-cube containers. The restricted axle loads still in place don't help either.
Sulla1
Seven wagons in 3 months? Seriously? At this rate they will have 50 by the time tenders are called for the next contract. I'm all for giving people and companies the benefit of the doubt, but that number suggests some-one is taking the p#ss. How many people allocated to the task? 'Coupla 1st year apprentices?
  Sulla1 Chief Commissioner

UGL had a series of unexpected technical issues with the conversion. Several wagons a week was the planned output...but it shows that "Queenslanding" wagons isn't necessarily easy or quick. I believe the conversion rate is now, or about to be, back on track.
  fzr560 Chief Train Controller

UGL had a series of unexpected technical issues with the conversion. Several wagons a week was the planned output...but it shows that "Queenslanding" wagons isn't necessarily easy or quick. I believe the conversion rate is now, or about to be, back on track.
Sulla1
I hope the "detailing" wasn't the issue. The locals down my way can do a full repaint in about 15 minutes.Wink
  Toddy Train Controller

There is a rake of NQTY wagons at UGL Broadmeadow in Newcastle currently that may be connected to the gauge conversion for the Glencore contract?
  Sulla1 Chief Commissioner

The wagons being converted in Townsville have been recoded RNDY. It would be interesting if UGL Newcastle has become involved as well.
  kingcrystal Station Master

Have been following this news item over the last week or so.

As far as Proserpine services are concerned, the comment in the first post in this thread about four services per day out of Mackay being lost is not correct; there are a lot less than 28 sugar trains per week. Molasses has not been rail-hauled out of Proserpine for several years so it can't be those making up the number quoted.

The sugar wagons to Mackay BST have not used plywood boxes for nearly 20 years now; steel 20ft QRST containers are used, two per PCUM wagon having a little more capacity than the old 4-box PYCM wagons.

ZRT is no longer the only road transport company as far as sugar transport is concerned in the Central region, with De Gunst and Cube having had some presence now.

Will be most interesting to see what happens, particularly now since the sugar branches are 20 tal rated.
  Sulla1 Chief Commissioner

The Proserpine Mill loads two trains most days...that adds up to four trains per day, each with their own train number. Twenty-four sugar trains are scheduled to run each week to and from Proserpine.
  kingcrystal Station Master

If you count the empty and loaded trains as different "services", yes.  

I would consider a "service" as the whole round trip; in practical terms, it is only 12 shipments of sugar, which is the important part for me.
  Sulla1 Chief Commissioner

I know what you're saying, but track capacity and crewing needs are measured by all the trains, not just the loaded half
  Fatty Deputy Commissioner

Location: Melbourne
Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.
  james.au Chief Commissioner

Location: Sydney, NSW
Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.
Fatty

Very informative, but one question (written as a few questions).  Aurizon might have been the last one left, but how big was the playing field?  Was it just two?  Or were there more?  Id be quite interested to know if Qube, SSR, CFCLA, GWA or others were at the table to begin with.
  Fatty Deputy Commissioner

Location: Melbourne
Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.

Very informative, but one question (written as a few questions).  Aurizon might have been the last one left, but how big was the playing field?  Was it just two?  Or were there more?  Id be quite interested to know if Qube, SSR, CFCLA, GWA or others were at the table to begin with.
james.au

I can only verify three. There may well have been more.


edit: You haven't mentioned anyone I know about.
  MetroFemme Assistant Commissioner

So Wilmer are the bad guys here?
  james.au Chief Commissioner

Location: Sydney, NSW
Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.

Very informative, but one question (written as a few questions).  Aurizon might have been the last one left, but how big was the playing field?  Was it just two?  Or were there more?  Id be quite interested to know if Qube, SSR, CFCLA, GWA or others were at the table to begin with.

I can only verify three. There may well have been more.


edit: You haven't mentioned anyone I know about.
Fatty

Interesting.

So, Aurizon, PN are two.  Wonder who the third one is....
  james.au Chief Commissioner

Location: Sydney, NSW
So Wilmer are the bad guys here?
MetroFemme

No one is (yet) a bad guy or good guy.  Its business - both sides are out to profit.  

Only problem becomes when one side isn't paying what it should - either through an imbalance in market power (e.g. monopolies) or market failure (e.g. when part of the cost isn't paid by one player.  in this case, added road damage costs, congestion costs etc if Wilmar goes to road).
  BrentonGolding Chief Commissioner

Location: Maldon Junction
So Wilmer are the bad guys here?

No one is (yet) a bad guy or good guy.  Its business - both sides are out to profit.  

Only problem becomes when one side isn't paying what it should - either through an imbalance in market power (e.g. monopolies) or market failure (e.g. when part of the cost isn't paid by one player.  in this case, added road damage costs, congestion costs etc if Wilmar goes to road).
james.au
True James but this seems to be a purely market-driven situation, there is no Gov't subsidy involved as far as I can see, trucks pay a charge to use the roads through registration (whether it is high enough is a whole different debate!).

Wilmar has put out a contract to tender but no Rail company seems to think it can fulfil that contract at Wilmar's price and make money on it so they all have said no thanks. So now Wilmar needs to decide if it puts the goods on road (which surely will cost more than the rail option) or ups the price it is prepared to pay to get it hauled by Rail.

They seem to have a while to sort this out so there is probably a deal of brinkmanship going on here.

If it gets to the point where it is all going to go to road then the Gov't needs to decide whether to intervene in this market driven outcome and impose ether extra costs or a straight prohibition in order to stop the damage to roads and amenity which would arise out of road haulage.

BG
  Fatty Deputy Commissioner

Location: Melbourne
They seem to have a while to sort this out so there is probably a deal of brinkmanship going on here.
BrentonGolding

Yes, this is exactly what's going on with both the rail haulage contract and the contracts with cane growers. There's plenty of time for it to play out.
  Expost Deputy Commissioner

Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.

Very informative, but one question (written as a few questions).  Aurizon might have been the last one left, but how big was the playing field?  Was it just two?  Or were there more?  Id be quite interested to know if Qube, SSR, CFCLA, GWA or others were at the table to begin with.

I can only verify three. There may well have been more.


edit: You haven't mentioned anyone I know about.

Interesting.

So, Aurizon, PN are two.  Wonder who the third one is....
james.au
Could it have been QR?
  Fatty Deputy Commissioner

Location: Melbourne
Having read the last three pages I think the point that has been missed is that Aurizon was the last rail operator left negotiating with Wilmar. I have it on very good advice that the only reason that Aurizon walked away is because Wilmar would not budge on price and that the price they wouldn't budge on meant that Aurizon would make a loss on the contract. I spoke to someone who was involved in negotiations for another operator and they confirmed that Wilmar are driving a very hard bargain. The operator they were negotiating for walked away much earlier than Aurizon.

I'd be surprised if this is the end of the story given the current state of Wilmar's other very public negotiations and the hesitance of the government to put and extra 2500 trucks a week on the Bruce highway during tourist season.

Very informative, but one question (written as a few questions).  Aurizon might have been the last one left, but how big was the playing field?  Was it just two?  Or were there more?  Id be quite interested to know if Qube, SSR, CFCLA, GWA or others were at the table to begin with.

I can only verify three. There may well have been more.


edit: You haven't mentioned anyone I know about.

Interesting.

So, Aurizon, PN are two.  Wonder who the third one is....
Could it have been QR?
Expost

I'd be very surprised if QR were involved as a potential operator but stranger things have happened.
  1771D Junior Train Controller

Queensland Rail is passenger only now thanks to the break-up of the business by Hockridge with himself gifted leadership of the freight business by Bligh.  This is only part of the sorry tale but probably should be discussed elsewhere.
  qredge Deputy Commissioner

Location: Marsden Qld
I heard that maybe WATCO could be the third party or maybe Qube as they have expressed an interest in the coastal intermodal
  bevans Site Admin

Location: Melbourne, Australia
Queensland Rail is passenger only now thanks to the break-up of the business by Hockridge with himself gifted leadership of the freight business by Bligh.  This is only part of the sorry tale but probably should be discussed elsewhere.
1771D

The ALP in Queensland were warned by the unions this guy would make a right royal mess of the company and jobs.
  james.au Chief Commissioner

Location: Sydney, NSW
I heard that maybe WATCO could be the third party or maybe Qube as they have expressed an interest in the coastal intermodal
qredge

Do Watco have spare rolling stock?  I thought CBH owned them anyway.
  james.au Chief Commissioner

Location: Sydney, NSW
True James but this seems to be a purely market-driven situation, there is no Gov't subsidy involved as far as I can see, trucks pay a charge to use the roads through registration (whether it is high enough is a whole different debate!).

Wilmar has put out a contract to tender but no Rail company seems to think it can fulfil that contract at Wilmar's price and make money on it so they all have said no thanks. So now Wilmar needs to decide if it puts the goods on road (which surely will cost more than the rail option) or ups the price it is prepared to pay to get it hauled by Rail.

They seem to have a while to sort this out so there is probably a deal of brinkmanship going on here.

If it gets to the point where it is all going to go to road then the Gov't needs to decide whether to intervene in this market driven outcome and impose ether extra costs or a straight prohibition in order to stop the damage to roads and amenity which would arise out of road haulage.

BG
BrentonGolding

The subsidy is the road.  I am not a betting person, but i would put money on the fact that whatever an individual truck pays in its rego as its road user charge is not the amount it would be charged if it was on a mass-distance basis.

Your last paragraph is interesting.  I wonder if there is any mechanism by which a government could charge a road user charge for specific roads to recover additional road damage costs in a situation like this?

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