In August 2017, Aurizon announced it intended to exit its “loss making intermodal business through a combination of closure and sale”. It also announced that, subject to regulatory approval, it would sell QIB to a consortium of Linfox and Pacific National (PN), while its Acacia Ridge Terminal, south of Brisbane, would be sold to PN alone.

Both transactions were opposed by the Australian Competition and Consumer Commission (ACCC), on the grounds that Aurizon planned to sell the rail component of its QIB to PN, its only competitor in intermodal rail in Queensland. The ACCC launched proceedings against PN and Aurizon in the Federal Court alleging anti-competitive conduct. In August 2018, the court issued an interlocutory injunction compelling Aurizon to continue to operate QIB until further federal orders were announced.

Aurizon has now reached a new deal to sell QIB to Linfox alone. “The agreement is subject to the lifting of an interlocutory injunction on Aurizon, which will significantly increase the size of Linfox’s intermodal rail capability,” said Linfox. Specifically, the company pointed to:

• Linfox having access to all necessary QIB freight depots in Queensland including access to the Acacia Ridge Terminal.
• Trucks, trailers, rail wagons for intermodal containers and heavy lift assets.
• Transfer of existing customer contracts to Linfox.
• Transfer of approximately 190 existing Aurizon employees into the Linfox team.

“Under a separate 10-year commercial contract, Aurizon’s Bulk business will also provide rail linehaul services and some terminal services to Linfox using Aurizon locomotives,”  continued Linfox.

Peter Fox, the firm’s executive chairman, said; “Linfox is proud to be making another strategic investment in Australia. This significant acquisition will strengthen the Linfox network and increase competition in the Queensland logistics market. It will also bring certainty to Aurizon staff, regional communities and customers that would have been impacted if the Aurizon QIB business had closed.”

In a statement, the ACCC said: “The ACCC has considered the Linfox proposal, and has decided that a public review of the transaction is not required, as we do not consider the acquisition by Linfox will give rise to a substantial lessening of competition.”

Rod Sims, chairman of the ACCC, said: “Linfox’s operations in Queensland are relatively limited, and the transaction will mean there will remain two intermodal rail line-haul providers in Queensland, which is a good outcome for rail competition and Queenslanders.”

The ACCC was unimpressed by Aurizon’s claim that the only alternative to the initial deal was to shut down QIB. Sims said it did not consider this to be “rational”, given there were other options. “The sale of the Queensland intermodal business demonstrates why the ACCC must always question claims that businesses will be shut if we don’t approve a merger,” he said.

The fate of the Acacia Ridge terminal is still up in the air, as the ACCC is continuing with litigation over Aurizon’s plan to sell this facility to PN. 

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This complete item is approximately 500 words in length, and appeared in the October 2018 issue of WorldCargo News, on page 16. To access this issue download the PDF here.