January 31, 2022
Pacific National’s Freight business is Australia’s leading provider of long-distance rail transport services for containerised and bulk freight. Pacific National is the leading intermodal and steel freight operator in Australia and is also eastern Australia’s largest transporter of grain and other regional export products.
PN is the largest coal haulier in the Hunter Valley region in the state of New South Wales and the second-largest in the state of Queensland, with a strong market position in intermodal and non-coal bulk haulage operations. Whilst the energy transition is expected to lead to future shifts in coal consumption at a global level, coal transport logistics continues to be a core function at Pacific National.
“Road to Rail” is a key pillar of Pacific National’s growth strategy.
Through an extensive body of work aimed at understanding various customer segments and their needs, Pacific National has built an in-depth understanding of the drivers of modal choice, which in turn allows them to develop products and services which better fulfil those requirements. By using new information from the Road to Rail programme and adopting a customer-centric approach, PN’s aim is to make rail even more competitive and more attractive as a sustainable modal choice.
Pacific National's significant network of infrastructure and transport assets means that it is strongly embedded in Australia's transport and logistics system. PN were helped by the essential nature of rail transportation for Australia's mining industry, the low-cost position of the mines Pacific National services and the company's strong market position in rail underpinning the company's earning visibility.
Pacific National maintained the profitability of its contracts during the pandemic-related downturn. For Pacific National in 2020 adjusted revenue declined by 2%, while EBITDA dropped by 13%, with the EBITDA margin narrowing to around 30% due to a pandemic-related fall in demand at the intermodal business
Stable Outlook is supported by Pacific Nationals' take-or-pay coal contracts which have a weighted-average maturity of the contracts is 4.7 years, with a contract typically having a tenure of 9.8 years, and the renewal rate is 80%-90%.
The company continues to create partnerships to support its “Road to Rail” strategy Transport and logistics company, Linfox, entered into an option agreement with PN for strategic co-location at Adelaide Freight Terminal. The agreement is to combine Pacific National’s intermodal rail services with Linfox’s end-to-end freight delivery.
Pacific National is betting big on east-west freight strategy that complements its investment in Inland Rail through a significant intermodal hub development at St Marys on Sydney’s western outskirts.
The broad concept is to continue major east-west intermodal hub construction at Port Botany, Penrith, Parkes and Perth linked by rail which will offer customers, including regional exporters, more efficient and productive connections to rail heads, ports, and intermodal freight terminals where trains and trucks meet.
Pacific National is currently constructing inland regional Australia’s largest logistics terminal at Parkes – to run 1,800-metre freight trains double-stacked with containers to Perth – while also proposing the development of a major freight hub at St Marys, near Penrith.
St Marys operation has gained support from ACFS Port Logistics in a 25-year deal and the hub aims to act as a competitive alternative to Qube’s Moorebank hub. The proposed St Marys Freight Hub is also located within Sydney’s biggest catchment area for many of the country’s largest national distribution centres and warehouses which service Western Sydney – one of the most populous and fast-growing regions in Australia
This will also align with NSW government plans, including the Freight & Ports Plan 2018-2023, to establish a series of intermodal freight hubs in western and south-western Sydney to help drive modal shift from road to rail, deliver more efficient haulage services to and from Port Botany, and reduce heavy vehicle carbon emissions.
