AUSTRALIAN rail freight operator Aurizon has been awarded an 11-year contract by Team Global Express (TGE), formerly Toll Global Express, to operate intermodal services connecting Perth, Adelaide, Melbourne Sydney and Brisbane.
TGE will become a cornerstone customer for Aurizon, supporting its expansion into the growing east-west and north-south containerised freight markets.
“This is our biggest non-coal revenue contract to date and another step in achieving our ambition to double the earnings of our bulk business over the decade, delivering sustainable growth in non-coal areas of our company,” says Aurizon’s managing director and CEO, Mr Andrew Harding. “Together with TGE we have designed an innovative transport and logistics solution to best meet their end customer needs. We both share a strong commitment to helping achieve a zero emissions future and recognise the significant role rail can play in helping achieve that goal.”
Services will commence in April 2023, and by April 2024 will include five weekly return trains connecting Melbourne, Sydney, Adelaide and Perth, and two Brisbane - Sydney services.
Aurizon operated transcontinental intermodal services between 2006 and 2017 but struggled to maintain market share against incumbent operators Pacific National and SCT Logistics.
Based on historical volumes, TGE will account for approximately 70% of the capacity of these new services. In addition, Aurizon sees an opportunity to build on this foundation by attracting additional customer on these corridors.
Aurizon acquired One Rail Australia in July 2022 which includes a major bulk and container haulage business, together with a lease over the 2200km Tarcoola - Darwin line.
“That acquisition has been a key enabler in Aurizon being able to deliver a national service for customers such as TGE,” Harding says. “We are well positioned to expand our presence in a growing market and demonstrate the many strong competitive advantages of rail, including cutting greenhouse gas emissions and congestion-busting in our towns and metropolitan areas.”
In its recent half-yearly results, Aurizon detailed estimated capital investment of $A 430m ($US 296.7m) in key bulk business opportunities (of which $A 200m has been spent to date), including $A 320m in new locomotives and rolling stock. Around 50% of this funding is expected to be used to support the new containerised freight expansion opportunity. A further $A 120m over the 2023-25 financial period will be used for terminal infrastructure and additional intermodal wagons.
An in-depth report on the future of Aurizon appeared in the November issue of IRJ. Digital subscribers can read it here.