Sunday 23rd Sep, 2018

ACCC concerned about Pacific National acquiring Aurizon QLD intermodal assets

Photo: Shutterstock
Photo: Shutterstock

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

The competition watchdog is concerned about a reduction in options for freight forwarders on most interstate rail routes from two to one, and raised barriers to entry for rail companies if Pacific National controls the Acacia Ridge Terminal.

The ACCC noted that freight services company SCT Logistics would remain on interstate rail routes; however, it is vertically integrated with freight forwarding and does not generally haul many containers for other freight forwarders.

ACCC Chairman Rod Sims said Aurizon’s decision to sell the assets to its closest competitor, while shutting down its remaining intermodal business, would fundamentally change the market.

“We are concerned about the impact on competition in the freight industry,” he said.

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

“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.”

The ACCC noted that 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.

But, Mr Sims said the ACCC’s preliminary view was that such an undertaking wouldn’t resolve the concerns arising from the dominant provider of intermodal rail linehaul services national also owning the Acacia Ridge Terminal.

The ACCC’s full statement of issues can be found on its website, and the Commission has invited further submissions from interested parties in response to its statement of issues by 3 April 2018.

In commentary accompanying Aurizon’s half-year results released last month, CEO and managing director Andrew Harding said the company was aiming to sell the Queensland intermodal business and the Acacia Ridge Freight Terminal on or around the end of June.

But, if the regulator declined to allow the sale of the assets, Mr Harding said Aurizon would close the Queensland intermodal business, potentially impacting 350 jobs.

Also last month, Linx Cargo Care Group announced it would take over leasing and operation of the Enfield Intermodal Terminal in western Sydney, as Aurizon divests from its interstate intermodal business.

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