EDITORIAL: Pacific National exit a blow for competitive rural chains

By: Jason Whittaker

It seems cruel to even mention it as farmers battle devastating drought, but the endless Big Dry has at least

It seems cruel to even mention it as farmers battle devastating drought, but the endless Big Dry has at least one big advantage: there's less pressure on Australia's crumbling, bottlenecked transport networks.

When it rains, if it rains, many of Australia's rural supply chains simply won't be able to cope with the increased volumes.

It means Pacific National's exit strategy for grain haulage — a business losing about $3 million ever week — is something less than a disaster.

PN is likely to quit on farmers to chase lucrative coal contracts in Queensland. It will "downsize, sell or close" rural operations, Asciano chief Mark Rowsthorn said late last year, as part of a corporate restructure designed to arrest a falling share price.

Grain groups like AWB aren't overly concerned. There simply isn't the farm output to worry about decreased rail capacity.

But it is concerned about a competitive, viable transport marketplace. With better weather conditions predicted, and the crop that comes with that, having grain haulage served by one small rail provider, if any, along with road transport is a recipe for inefficient and costly handling and distribution.

Governments will be under pressure to secure PN's services and ensure trucking isn't made to pick up the slack. But the issue of managing viable rural supply chains is only going to intensify.

We're back, on Tuesday just this once as we lurch into a new year of delivering unparalleled intelligence on logistics management in print and online. There's some exciting developments ahead in 2008: expanded coverage on key issues, special in-depth editions, new event and industry alliances. ChainMail returns to your inbox, as usual, on Monday night, while the January/February edition of SupplyChain Review will be out in the first week of next month.

As always, we're driven by your feedback. You can contact SupplyChain Review Editor Jason Whittaker on (07) 3854 2514.

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