Monday, 29 October 2012

A new name should mean a new start

With QRN's impending name change to Aurizon, perhaps it's time for Australia's largest rail operator to consider changing more than just its letterhead. For too long the name QRN has been synonymous with coal - and in the last decade this has been at the expense of almost every other aspect of its operations...except perhaps its related iron ore task. So what should this new Aurizon be? For one it should develop a goal of diversification. Rail's greatest strength is its ability to move whatever the economy one sector falters, another can be there to bring black ink to the ledger - few other industries have this ability to change their stripes - and it is why investors are flocking to railroad holdings in North America. So where can Aurizon diversify? Almost anywhere. For example, opportunity abounds in the domestic container business, despite the global ructions impacting on the resource industry. In the Brisbane to Townsville corridor alone the Bruce Highway carries the equivalent of forty trainloads of freight every day. Much of this has appeared during the decade of growth QRN spent concentrating on Queensland coal - a time during which the size of the North Queensland economy has more than doubled, and could double yet again in another decade - by 2021 more than 1-million people will live between Mackay and Cairns. However, for their part, PN and QRN actually haul less rail freight on this corridor than the former QR hauled in the late nineties. So name changes are all well and good, but will shareholders see a change in attitude? Surely this isn't the time for just more of the same? 

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