Pacific National will have “ready-made” customers such as Coles and Bunnings when it opens a proposed freight hub in western Sydney later this year that will compete with Qube’s new Moorebank terminal, says Pacific National chief executive Dean Dalla Valle.
The rail freight operator has signed a 25-year contract with logistics group ACFS, which trucks goods for consumer and retail groups, to move the goods from a proposed new freight terminal at St Marys in western Sydney to the companies’ warehouses.
The proposed hub hopes to have trains running to and from Port Botany by December, if it can secure planning approvals to start construction for the $35 million first stage in July.
Mr Dalla Valle told The Australian Financial Review that the rail group, which is owned by five international investment funds after being split from Asciano in 2016, would not be “peddling for people” like logistics group Qube.
“We have a logistics company [ACFS] who actually has contracted work, who is now doing it on the road and wants to take it off and put it on rail,” Mr Dalla Valle said.
Qube is building its own freight hub at Moorebank, in south-western Sydney, that also will shuttle goods on rail to and from Port Botany. But Qube is still signing up customers to occupy new warehouses.
Qube is building one warehouse for Target that is due to be finished this year, as well as two others (one will be operated by Qube on behalf of several tenants while the other will be leased to third-party tenants).
St Marys is almost 60 kilometres from Port Botany, further away from the port than Moorebank, but is closer to existing warehouses used by retailers and consumer goods companies such as Costco, Ikea, Myer and LG.
It will be the first import-export terminal in Australia for Pacific National, which already has freight hubs in most states (including a terminal at Chullora in Sydney) and moves goods on rail across Australia, but will initially only handle imports.
Pacific National aims to move goods on rail to St Marys within 90 minutes and have them at company warehouses within three hours.
Pacific National is building another freight hub at the central NSW town of Parkes, which is on the proposed inland rail route and has rail connections to Perth. When the Parkes hub is completed, Pacific National expects to move agricultural goods from regional centres to Port Botany for export via St Marys.
Pacific National is also trying to buy an intermodal terminal near Brisbane, in Acacia Ridge, from its rival Asciano but is waiting on the outcome of a Federal Court decision after the Australian Competition and Consumer Commission tried to block the deal alleging it would restrict competition.
Mr Dalla Valle said Pacific National, which has used the Acacia Ridge terminal for many years, had managed to expand its operations while the terminal was under Asciano’s ownership. “Yet others are saying, if we own it, nobody else can grow their business,” he said. “We’ve proven the complete opposite.”
Qube, which also wants to buy the Acacia Ridge terminal, has told the competition watchdog it would be challenging for the group to enter the interstate intermodal market if the terminal was controlled by Pacific National.
Mr Dalla Valle, who is chairman of industry lobby group Freight on Rail Group, has been pushing for the regulations governing rail operators to be simplified to make it easier to compete with trucking groups, which secure transport contracts by offering cheaper prices.
He said experienced NSW freight train drivers have to go through 18 months of extra training to operate on similar rail corridors in other states or territories while less experienced truck drivers can shift from operating different kinds of vehicles in just two days.
Pacific National’s rail shuttle from St Marys to Port Botany could take up to 80,000 trucks a year off the roads, Mr Dalla Valle said.