Mining freight operator Aurizon has decided to divest its Intermodal business, following year on year financial losses.
Aurizon Intermodal – a containerised rail and road freight haulage business for retailers, wholesalers and freight forwarders – comprises two businesses, Queensland Intermodal and Interstate Intermodal.
Aurizon managing director and CEO Andrew Harding said the company decided to exit from the business because of “significant financial losses that have been sustained year on year”.
“The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market,” he said.
Harding added that exiting the business would allow the company to focus on the core and profitable parts of the company’s portfolio.
As part of the exit, Aurizon will sell two components of the Intermodal business and close the third.
The company signed an agreement to sell its Queensland Intermodal business to a consortium of Linfox and Pacific National. Around 350 worker positions will be transferred to the consortium under this agreement, as well as assets and commercial and operational arrangements.
Aurizon also signed a separate agreement with Pacific Coal to sell its Acacia Ridge Intermodal Terminal – a freight hub for freight train services to and from Queensland – which will involve the transfer of around 30 positions.
Both agreements are subject to approval by the Australian Competition & Consumer Commission (ACCC) and the Foreign Investment & Review Board.
The agreements will cost a combined $220 million and if Acacia Ridge does not complete the transaction within six months, Pacific National will pay Aurizon an additional $5 million.
The rest of Aurizon’s Intermodal business (outside of Queensland) will be closed by December this year, once all commercial arrangements with customers are finalised. Around 250 employee positions will be affected by the closure and Aurizon said it would consult with its workers on redundancy and redeployment options.
“Aurizon will work with its customers on transition arrangements and in the interim it will be business as usual, with the provision of safe and reliable services for customers particularly in the lead-up to the busy Christmas period,” the company said.