Aurizon (formerly QR National) is Australia’s largest freight operator, transporting more than $50 billion worth of Australian export each year. It is amongst the world’s largest rail transporters of export coal from mine to port, transporting 500,000 tones of coal a day from around 50 mine sites across six major Australian coal chain system. Aurizon is committed to Australia’s iron ore industry, still on track to treble iron ore business by 2014. At the same time, it is providing seamless end to end intermodal transport and logistics solutions to keep the customers’ freight moving in right direction. In the past year, Aurizon completed $1.1 billion infrastructure project and delivered on time and on budget, also its intermodal business operates across five mainland states, from 40 freight distribution centers and delivering goods across the country.
Yet Aurizon wants to continue stretching as far and wide as the horizon of Australia and building the great story of success in the future.
This report is going to focus on Aurizon (formerly QR National) and their strategic positions against competitors in the rail freight industry. Other companies’ performances will be taking into account as comparison to indicate both success and deficiency of Aurizon. This report will look at the business models developed by Aurizon, along with the different structures and growth strategies used by the company to determine the correlation between successful implementation of business model and superior performance.
Freight rail transport is a significant business which heavily relay on one country’s infrastructure such as ability to develop and implement efficient route and consummate construction of railways. Many rail systems have turned to computerized scheduling for trains which has helped add more train traffic to the rails. Overall, many businesses transport their goods and products by rail if they are traveling long distance because it is cheaper to transport in large quantities by rail than by truck; however shipping remains a viable competitor where water transport is available. Economies of scale can be achieved because less labor and energy is required to haul the same amount of cargo.
As the global demand for coal, iron ore and other mineral resources increases over time, thus leads to an increase in demand of national freight transportation. Continued demand for mining, manufacturing and agriculture is expected to cause this freight task to double by 2020 (Bureau of Infrastructure, Transport and Regional Economics, 2012).
The figure 1 illustrates the recent trends of Australian rail freight (Bureau of Infrastructure, Transport and Regional Economics, 2012); the rail freight remains relative steady growth despite that the main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost much of the freight business to road transport. Many governments are now trying to encourage more freight onto trains, because of the environmental benefits that it would bring; rail transport is very energy efficient (Greene, Scott. 2009). Many arguments of transport refer to problems such as: freight productivity; urban road congestion; social inclusion and access; safety; security; energy and climate futures. Growth and change of rail freight transportation is expected to increase the scale of these issues.
The challenges of the transport which are qualitatively different from Australia’s historical experience and issues faced in other countries. One is the implications of ‘patchwork’ growth on a range of infrastructure issues (Infrastructure Australia 2012), in particular servicing the needs of growth in Australia’s north and north-west while the most Australians population lives in the south and east (Infrastructure Australia 2012). Another is whether Australia’s largest cities will exceed the size where it is practical to simply scale-up…