Toll, Scotts eye off FreightLink

FreightLink

South Australian transport entrepreneur Allan Scott is eyeing the Adelaide-Darwin rail line, which has been put up for sale by FreightLink, with Paul Little’s Toll Holdings expected to join the party.

According to an ABC report, founder of Scott’s Transport has expressed his interest in operating the rail freight service, adding the rail corridor needs improvement in infrastructure to hand heavy freight.

“I think it’s an investment – we’re the biggest users of it and Toll [Holdings] are next, so what do we do?” he said.

“You know we can’t afford to lose it, we can’t afford to have it closed down and the banks are starting to call up the money, so something has to be done.”

While Freightlink has recently increased the number of weekly freight services to Darwin, the operator has been making losses.

Mr Scott, however, stressed the rail service should continue to operate to sustain a number of industries.

“A lot of our industry and a lot of our produce goes up on that rail and a lot of stuff from Melbourne goes on that rail, so it’s very important that it be kept going.”

SA agriculture minister Rory McEwen welcomed Mr Scott’s interest, saying it would provide the state’s industry with a significant boost.

“Mr Scott’s obviously a very experienced and successful freight operator in all its forms. He’s proved that around Australia and built a magnificent transport industry…based in Mt Gambier,” he said.

“To add a railway line to that would be a great part of his vision.”

Toll Holdings would partner Scott Group in a bid to buy FreightLink, a Toll spokesman also confirmed today.

Emirates flies high, earns lots

Sheiikh Ahmed Emirates Airlines

The Emirates Group has announced its 20th consecutive year of net profit, notching a new profit record despite soaring oil prices and challenging business conditions in the second half of its 2007-08 fiscal year.

Group net profits increased 54.1 per cent to AED 5.3 billion (US$ 1.45 billion) for the financial year ended 31st March 2008, on revenues of AED 41.2 billion ($ 11.2 billion) compared to the previous year’s AED 31.1 billion ($ 8.5 billion). The group net margin improved to 13.2 per cent from 11.4 per cent in the previous year.

The group also retained a robust cash balance of AED 14.0 billion ($ 3.8 billion), compared with AED 12.9 billion ($ 3.5 billion) the previous year. Emirates will pay a dividend of AED 1 billion ($ 272.5 million) to its owner, the Government of Dubai. In 2007-08, the group estimates a direct contribution of AED 22 billion ($ 6 billion), and another AED 25 billion ($ 6.8 billion) in indirect contribution to the UAE economy.

The 2007-08 Annual Report of the Emirates Group – comprising Emirates Airline, Dnata and subsidiary companies – was released in Dubai at a news conference hosted by Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive, Emirates Airline and Group.

The group’s latest record performance reflects its success in growing customer demand through the strategic expansion of its business operations across six continents, supported by ongoing investments in the latest technology, products and customer service while keeping a tight rein on costs. This is illustrated by the 21.2 million passengers who flew with Emirates in the latest financial year, 3.7 million more than in the previous year; as well as the expansion of Dnata’s international ground handling operations to 17 airports in seven countries.

Fuel costs remained the top expenditure for the 4th year running, accounting for 30.6 per cent of total operating costs compared with 29.1 per cent the previous year and 27.2 per cent the year before. 

The airline’s  fuel risk management programme continued to reap rewards, saving the company AED 888 million ($242 million) in 2007-08, as WTI crude oil prices hovered around the US$ 90 per barrel mark in the second half of the fiscal year, 50 per cent more than US$ 60 per barrel in the same period the year before. In total, the fuel risk management has saved in excess of AED 3.7 billion ($ 1 billion) since the financial year 2000-01. 

In his opening review in the 2007-08 Annual Report, Sheikh Ahmed highlighted some major milestones for the group which included the move of most of the company’s Dubai-based staff to the new Emirates Group Headquarters; the launch of 11 new passenger and freighter destinations across the globe including Emirates’ first South American destination; and the massive 2007 Dubai Air Show aircraft order which has been described as the largest in civil aviation history worth US$ 34.9 billion at list prices.

He also noted that the continued ability to attract and retain the best talent for the company’s growing requirements will be one of the Group’s biggest challenges.

He said: “As we plan for the next decade, our biggest challenges will be to find more pilots, engineers, cabin crew and skilled staff across our various business units. Fortunately, Emirates has thus far been a strong employer brand, with more than three million unique visitors browsing job opportunities on our online recruitment website last year, from which we received over 288,000 applications for positions within the Group. Being based in Dubai also has its advantages as the city itself is already preparing to welcome 15 million visitors by 2010 and there is massive investment in infrastructure to serve and attract the increasing number of expatriates.”

He also reiterated the Emirates Group’s support for Dubai’s new low-cost airline, which has been established as a separate entity from the Emirates Group; and remarked on competition in the region, saying: “This is a big cake and admittedly, Emirates has a big slice of it, but there is plenty for the other airlines and we welcome them to the region.”

Emirates Airline’s revenues totalled AED 39.5 billion ($ 10.8 billion), an increase of 32.3 per cent from AED 29.8 billion ($ 8.1 billion) the previous year. Airline profits of AED 5 billion ($1.37 billion) marked a 62.1 per cent increase over 2006-07’s record profits of AED 3.1 billion ($844 million).

This result was due to improved yields and higher load factors on increased capacity; as well as other operating gains.

In 2007-08, the airline’s fleet expanded with 11 new Boeing 777s delivered, including Emirates’ first 777-200LR passenger aircraft. At the end of the financial year Emirates’ fleet reached 114 aircraft, including 10 freighters, boasting an average age of 67 months – one of the youngest commercial fleets in the skies.

The record aircraft order at the 2007 Dubai Air Show brings Emirates’ total order book, excluding options, to 182 aircraft at the end of March 2008, worth approximately US $58 billion.

During the year, the airline launched passenger services to seven new destinations – Newcastle, Venice, Sao Paulo, Ahmedabad, Toronto, Houston and Cape Town – and strengthened its existing network by adding services onto existing routes most notably to high-demand cities in China, India, Middle East and Africa.

Passenger seat factor increased to 79.8 per cent from 76.2 per cent the previous year. Traffic increased faster by 16.6 per cent to 14,739 million tonne kilometers as compared to the capacity increase of 13.7 per cent to 22,078 million tonne kilometers. While yield improved for the sixth consecutive year to 236 fils (64 US cents) per RTKM (Revenue Tonne Kilometre), up from 216 fils (59 US cents) in 2006-07; high jet fuel prices and rising costs drove breakeven load factor up to 62.7 per cent from 59.9 per cent last year.

Emirates SkyCargo performed well in what was a turbulent year for the air cargo industry, marking healthy revenue and tonnage carried despite high fuel prices, a U.S. slowdown from the sub-prime crisis, and bad weather affecting agricultural production in key areas. The division carried 1.3 million tonnes of cargo, an improvement of 10.9 per cent over the previous year’s 1.2 million tonnes and recorded a revenue increase of 20 per cent to AED 6.4 billion ($ 1.8 billion), up from AED 5.4 billion ($ 1.5 billion) in 2006-07.

Cargo revenue contributed 19 per cent to the airline’s total transport revenue, yet again one of the highest contributions of any airline in the world with a similar fleet. During the year, Emirates SkyCargo introduced freighter-only destinations to Djibouti, Hahn, Toledo and Zaragoza. At the end of the financial year, the freighter fleet was 10 aircraft – five leased and five owned. In all, Emirates SkyCargo carried freight in 114 aircraft, including bellyhold space in the passenger fleet, to 99 cities on six continents.

Dnata recorded strong revenue growth of 27.2 per cent to AED 2.6 billion ($718 million), compared with AED 2.1 billion ($565 million) the previous year. Profits reached AED 305 million ($83 million) despite a challenging year for airport and cargo operations with ongoing construction at Dubai airport and peak traffic congestion.

As Dnata moves into its 50th year of operation in 2008, it remains at the core of Dubai’s rapid traffic growth, handling 119,510 aircraft (up nine per cent), 35.6 million passengers (up 18.4 per cent), and 632,549 tonnes of cargo (up 18.2 per cent).

During 2007-08, Dnata continued to expand its international ground handling operations, investing in ground handling businesses in Switzerland, Australia and China, to bring its reach to 17 airports in seven countries. It opened FreightGate-5 in Dubai Airport Freezone to handle premium freight, and also saw operations at Dubai Terminal 2 increased with the opening of a 37,000 square foot extension that will serve 700 more flights per week and an annual throughput of approximately 5 million passengers.

As of 31st March 2008, the Group employed 35,286 staff, representing 145 different nationalities. During the year, the Group hired more than 7,000 people including some 2,000 cabin crew and 400 new flight deck crew.

For the full report and accounts, visit: www.ekgroup.com.

Photo: Sheikh Ahmed bin Saeed Al-Maktoum

Queensland Rail not for sale

Queensland Transport Minister John Mickel has decided not to privatise Queensland Rail but has foreshadowed job losses whilst it is restructured, according to a report in The Financial Review.

Mr Mickel is reportedly in favour of more joint ventures with the private sector, and has admitted the rail operator will need to improve its performance in light of Asciano’s Pacific National taking aim at the hitherto monopoly that QR had on Queensland coal transport.

The statement follows recent Queensland Government announcements on the sale of Cairns and Mackay airports and its 12.5 per cent share of Brisbane airport.

First Boeing 777 Freighter emerges

Boeing 777F leaves the factory for the first time

Progress continues on the first Boeing 777 Freighter as the company’s newest cargo aeroplane was towed out of its factory in Everett, Wash. and onto the flight line on Tuesday night. Work will continue on the 777 Freighter to prepare for flight test this northern summer and to paint it in the Boeing livery.

The 777 Freighter is claimed to fly further and provide more capacity than any other twin-engine cargo aircraft. Boeing will deliver the first 777 Freighter to its launch customer Air France in the fourth quarter of 2008. The 777 Freighter is based on the 777-200LR Worldliner passenger aircraft and is built using the same production line as all other models of the 777. Eleven customers around the world have ordered 78 of the 777 Freighters.

 

Mega-logistics centre unveiled

National private development company Walker Corporation has unveiled its master plan for a billion dollar industrial mega‑centre at Ipswich with vital access to a national transportation grid.

The 335 hectare integrated business precinct, to be known as Citiswich, will feature a mix of industrial, commercial, residential, open space and business uses in a master-planned estate. It is set to become one of the leading developments of its kind, according to Walker Corporation.

Situated at the junction of the Ipswich Motorway, Warrego Highway and the Cunningham Highway, only 22 kilometres from the CBD and eight kilometers from Ipswich, Citiswich will connect businesses to the major transport and economic flows to and from the south-east corner of the State.

The Citiswich site which is now being developed by Walker Corporation was formerly known as Bremer Business Park.

Walker Corporation will spend about $250 million on land development in seven stages over the next 8-12 years, and ultimately Citiswich is expected to provide the base for industries employing up to 5,000 people.

Included in the infrastructure works is a link between Brisbane Road and the Warrego Highway, which will create a huge benefit for local traffic flows.

Development approvals for Stage One are expected to be finalised by the new year, with the first land settlements expected by the middle of next year.

Walker Corporation Queensland general manager, Peter Saba, said Citiswich would offer options for either land purchase or purpose-built facilities for leasing.

“Citiswich will offer businesses an outstanding opportunity to capitalise on the current shortage of available land and building alternatives in south-east Queensland,” he said.

“The name Citiswich makes a distinct reference to its strategic location near Ipswich and its exceptional transport connectivity.

“Citiswich will cater for all sectors of industry ranging from local operators up to large scale national and international businesses.

”"Lots in the first stage will range from 4,000 sqm to 12 hectares, and in later stages, Citiswich will offer lots from as small as 1,000 sqm.

“Citiswich is an ideal location for manufacturing industries, distribution and logistics operators, warehouse and storage facilities, construction and service industries, mining companies and research and technology firms.”

Citiswich has direct access to the Bremer River and will include public open space, parklands and recreational facilities. With significant landscaping, wide buffer zones and set‑backs it will have a minimal visual impact on the surrounding area.

Citiswich has a frontage to the Warrego Highway, offering high-exposure premises for light industry, commercial activities and corporate headquarters.

Mr Saba said Citiswich would eventually be one of the major industrial areas servicing south-east Queensland.

“As industries look to establish a corporate foothold in south-east Queensland or to relocate from more expensive and congested city sites, Citiswich will provide an ideal alternative in a strategic and highly accessible location,” he said.

QR revamped, but is it for sale?

Rail transport and logistics company, QR Limited, has announced plans for a new corporate structure and new appointments to its senior management team. 

QR Chairman, John Prescott, said the proposal involved the development of specific business entities within QR to improve focus and outcomes for its newly redefined Freight, Passenger, Network and Services businesses.

Mr Prescott said the objectives of the changes were to:

    * Improve safety, customer service and operating performance; and

    * Provide flexibility for QR to continue exploring opportunities with potential private sector partners for its freight business, where they would bring scope, scale or expertise.   

“We need to have better focus on customer outcomes, be more closely aligned with markets in which we operate and improve our financial performance,” Mr Prescott said.

“The new structure recognises that QR has a portfolio of businesses operating in distinctly different markets. They need to be separate, customer-focussed and absolutely accountable for safety, performance and bottom line results.

“Each business will have a profit and loss statement and balance sheet, and be responsible for cash management and other results.”

The new structure sees the establishment of the four major business units named above, supported by a focussed corporate core of four functions: Finance, Risk, Human Resources and, in a major new initiative, Marketing. These changes will be bolstered by significant new management appointments announced today by QR’s new CEO Lance Hockridge. These include:

    * Deborah O’Toole as Chief Finance Officer, commencing at QR this week

    * Stephen Cantwell as Group Executive General Manager QR Freight (previously Chief Operating Officer),

    * Michael Carter as Executive General Manager QR Network (previously Acting Group General Manager Network Access), and

    * Glen Mullins as acting Executive General Manager Services (previously Group General Manager of Infrastructure Services)   

“Stephen Cantwell will add management strength and expertise to the freight business. Stephen has done an outstanding job in rolling out QR’s national freight strategy to date. We believe he is well respected by customers and will bring a strong focus to this critical area.”

Mr Hockridge also said he expected to shortly announce the appointment of the senior marketing executive. The new business model is expected to be in place by early 2008.

“All the work done has reinforced QR’s potential in building a successful national transport business but significant changes are needed. We are not simply restructuring QR, we are building a new business,” Mr Prescott said. “We’ve built a national platform in recent years, it’s now time to put in place the strengths to carry each business forward.”

The restructure is widely seen as the first step in a possible partial sale or sharemarket float next year.

Asciano chases mining boom, ditches agriculture

Asciano Group, the infrastructure, port and rail operator arm of Toll Holdings up until its recent forced separation, has outlined plans to offload its rural businesses and expand into the burgeoning coal transport market.

Asciano also ended speculation about a possible $20 billion takeover bid for logistics firm Brambles, saying that it "no longer sees its 4.09 percent stake as a long-term investment".

Chief executive Mark Rowsthorn said it would focus on coal transport as the decade-long drought had made its rural businesses unprofitable.

"Due to their cyclical nature they are not businesses we can stay in for the long term. This current situation cannot be tolerated."

Asciano plans to reduce its grain operations and sell or close its rural container business at a cost of $50 million. Rowsthorn said the restructure will reduce exposure to volatile cyclical sectors and will produce annual benefits of $40 million.

Asciano said the restructured business would see fiscal 2008 earnings before interest, tax, depreciation and amortisation (EBITDA) of $695-705 million.

The company also said it was actively looking for port and rail acquisitions in Europe, Saudi Arabia, the United Arab Emirates and India, adding it was shortlisted among four bidders for some Saudi port facilities.

Customs DVD to help exporters

The DVD, Exports Reporting, targets five common export compliance and reporting errors, and provides step-by-step guidance on how to report export information correctly the first time round.

"It is extremely important for Customs to find innovative ways of delivering business improvements. The launch of today’s educational DVD will provide a resource that is designed to assist industry efforts with voluntary compliance in their export reporting process," National Director Compliance, Peter White said.

"By following the principles laid out in the DVD, exporters can avoid the delays that occur when Customs has to verify data. Reducing errors will increase productivity and allow Customs greater opportunities to target high risk non compliance."

In October, a preview of the DVD was enthusiastically received at the Customs Brokers and Forwarders Council of Australia (CBFCA) national conference.

Council Executive Director Stephen Morris said it was a great direction for Customs to take in training, both for CBFCA members and exporters.

"Training staff is one of the biggest challenges for companies in this sector and with such technical data entry and reporting requirements, it’s fantastic to now have an easily accessible and effective product that our members and exporters can show their staff," Mr Morris said.

Request for copies of the Exports Reporting DVD can be sent to:

Email stan.pragnell@customs.gov.au; or telephone

Union supports shift to seafreight

A national carbon-pricing scheme would result in fewer freight trucks on the nation’s roads, an independent report into the greenhouse impact of Australian transport has found.

The Australia Institute study found that a shift from roads to sea freight would deliver cleaner environmental outcomes and assist Australia meet Greenhouse reduction targets.

The report found that road transport accounts for less than 40 per cent of the domestic freight task, but is responsible for over 80 per cent of freight emissions.

In comparison, shipping accounts for 22 per cent of the freight task and only four per cent of emissions.

Maritime Union of Australia national secretary Paddy Crumlin said the report shows that Australian shipping should be part of the solution to meeting the challenges of climate change.

"The Howard Government’s neglect of Australian shipping is yet another example of this Prime Minister failing to address and plan for the inevitabilities of climate change," said Paddy Crumlin.

"Instead, this Government has undermined shipping – by far the most environmentally friendly transport mode – for more than a decade.

"As a result Australia’s shipping fleet is aging, its market share has been depleted and the potential for emissions reductions has been severely hampered," said Mr Crumlin.

"The environmental advantages of getting freight off our roads and onto ships are clear – not to mention the obvious safety benefits for road users."

"Australia needs transport policy that recognises the integral role of shipping and provides for Australia’s future economic and environmental sustainability," he said.

Institute urges bigger role for coastal shipping

A new report released today by the Australia Institute shows coastal shipping is a greenhouse friendly transport mode and that the drift away from shipping in the domestic freight market is contributing to rising greenhouse gas emissions.

The report, Climate Change and Australian Coastal Shipping, by Institute Deputy Director Andrew Macintosh found that coastal shipping has the lowest emission intensity of the three major freight transport modes (road/rail/ship). When the modes are broken into subgroups, it ranks second behind private rail as the most energy efficient mode.

“Shipping is an energy efficient and green transport mode, yet it is losing market share to less efficient modes, which is ultimately increasing freight emissions,” Mr Macintosh said.

Shipping’s share of the non-urban freight market has fallen from 37 to 26 per cent over the past 15 years. A large proportion of the market share lost by shipping has gone to road transport, which is the most inefficient of the three major modes.

“When operating in non-urban markets, trucks have emission intensities that are at least four to five times higher than those associated with shipping,” Mr Macintosh said.

“Road transport accounts for less than 40 per cent of the total domestic freight task, but is responsible for over 80 per cent of freight emissions. In comparison, shipping accounts for 22 per cent of the freight task and only four per cent of emissions.”

The report found that the introduction of a moderate price on greenhouse gas emissions via a carbon tax or emissions trading scheme is unlikely to result in a large increase in shipping’s share of the domestic freight market.

“Due to shipping’s competitive position, it is unlikely that the imposition of a moderate carbon price will lead to a rebound in shipping’s market share,” Mr Macintosh said. “In the short- to medium-term, achieving a substantial reduction in freight emissions will require significant improvements in the emission intensity of road transport and/or aggressive government intervention to encourage the transfer of freight from road to either rail or ships.”

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