Linfox CEO Mark Mazurek calls for rail investment after Inland Rail disappointment

The boss of transport and logistics giant Linfox is calling for more investment in the nation’s ageing rail network as it beefs up its own rail business.

Linfox’s new $90m freight terminal at Regency Park, in Adelaide’s north.

The boss of transport and logistics giant Linfox is calling for more investment in the nation’s ageing freight rail network after a derailing of the ambitious multibillion-dollar Inland Rail project earlier this year.

An independent review of the project found the estimated cost of delivering the proposed 1700km railway line from Melbourne to Brisbane had almost doubled from $16.4bn to $31.4bn, prompting the federal government to prioritise completing an initial stretch from Beveridge, in Melbourne’s north, to Parkes in NSW by 2027.

Linfox Australia and New Zealand chief executive Mark Mazurek said the company was left disappointed by the cost blowouts, delays and uncertainty surrounding future investment in extending the line to Brisbane, as it looked to transition more of its own business from road to rail in a bid to improve transport ­efficiency and safety, and cut carbon emissions.

“We were really looking forward to that and wanting to invest behind it as well, because we see in 15 or 20 years we’re really going to need it – we think it’s national-building stuff,” he said.

“It’s either rail or road – something’s going to have to be invested in, in order to allow the flow of goods to happen, which is going to increase as our population increases. We think rail, on those big long-haul runs, is the most environmentally sustainable approach.

“Currently there’s not digital signalling across all of the Australian rail network, and so in a lot of respects we’re still working on an antiquated 1940s or 1950s light system. With some digitisation we would be able to run trains closer together and more safely, and that would increase the output of the rail network.

“You can’t gold-plate the Australian rail network, but there’s definitely more investment required to maintain the systems that we’ve got now, let alone further investment in the Inland Rail initiative.”

Linfox, owned by colourful billionaire Lindsay Fox, is investing in its rail infrastructure in a bid to transition more of its business away from its trucking roots.

On Tuesday the company will unveil a new $90m intermodal freight terminal in Regency Park, in Adelaide’s north, servicing the east and west coasts, and the inland rail line to Darwin.

The new 25,000sq m facility features temperature-controlled storage areas, a container yard, intermodal cross-docking facilities and a cargo-link land bridge to the adjacent rail line. It will employ about 200 direct employees.

The company is planning to develop similar facilities in Sydney and Melbourne, but Mr Mazurek said a firmer commitment would only be possible once there was more certainty around the nation’s future rail network.

“The infrastructure, where rail and roads are being determined, and where they’re being set is ­really important, because once we know those things we can invest behind it,” he said.

“But it has been hard, and Melbourne is a good example of where you can’t invest in advance because we’re still trying to exactly work out where all the rail terminals are going to end up. I think with what’s happened with Infrastructure Australia over the last few years, especially Inland Rail, it’s been very contentious so no one actually knows, or if they know, they can’t tell you.

“So you have to wait, and then when you’ve waited long enough the market becomes very hot and everyone wants the same space. So the preservation of industrial precincts to serve logistics needs has got to be a real focus for this country.”

Mr Mazurek said labour shortages and high fuel prices continued to pose a major challenge for the transport industry, forcing many operators to shut up shop. Others, such as Scott’s Refrigerated Logistics, have been forced into insolvency.

However, Linfox returned to profit growth last financial year for the first time since the onset of Covid-19, with net profit rising almost 60 per cent to $96.2m in the year to June, on a 6 per cent increase in revenue to a record $3.695bn.

While the company has made several small acquisitions in recent years, including the $4.5m purchase of freight and transport company JHC Transport this year, Mr Mazurek said there was room for more consolidation in the highly fragmented industry.

“We are one of the bigger players, we’re a top two player, but we would have less than 10 per cent of the market,” he said.

“We’ve been growing organically but absolutely, no question, the industry will consolidate more, and there’s some of our competitors out there who are doing that.

“There will be opportunities coming up and if they suit our business we will definitely be going for them.”

Originally published as Linfox CEO Mark Mazurek calls for rail investment after Inland Rail disappointment