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Railroad Transport: Hitting the (rail)road

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Growing demand has led Adelaide-based Railroad Transport to invest in a new Melbourne depot, with ambitions to expand its national footprint

Railroad Transport: Hitting the (rail)road
Railroad GM Justin Williams, CFO Daniel Mignone and Victorian state manager Michael Curran

 

One of Railroad Transport’s most distinguishable features is its logo.

Think of the London Underground and it’s an exact replica of the famous roundel that was designed in the early 20th century.

In fact, Railroad isn’t the only business to adopt the iconic insignia. An internet blog documents worldwide examples, including Mexican electrical cable business Electrica Procables, a Bombay grillhouse, the list goes on and on.

Railroad Transport gets a mention too. It’s an apt name. As it suggests, rail comprises a large portion of operations. Around 80 containers come out of Melbourne per week.

But it wasn’t always like that.

Started in South Australia by Glen McMahon as a livestock transport business called GF McMahon Transport in 1957, alongside AFL Hall of Famer Bob Hammond, he shares directorial duties with his son Craig (pictured) at the company that became Railroad Transport in 1990.

It has since grown to now provide freight services to all major Australian cities.

MELBOURNE MOVE

On the day of ATN’s visit, Victorian state manager Michael Curran is joined in Melbourne by Adelaide-based GM Justin Williams and CFO Daniel Mignone.

Williams says that, over time, the business has transitioned from a 75/25 per cent road to rail ratio, to now 20/80 per cent.

The depot, in Laverton, traverses 8,000 square metres and 6,000 rack spaces. The build lasted around 15 months, with the move completed on January 14 this year.

Railroad predominantly operates between Melbourne, Adelaide and Perth (with some services along the east coast), which the open area in the new Melbourne facility caters for. The 3PL storage and warehouse side of the business will occupy the back part of the warehouse.

It forms a vital component of the business’s operations. As Williams explains: "Basically, Melbourne is 80 per cent of the business.

"We’ve been at a couple of different locations now. Probably the longest one was at Cawley Road in Brooklyn, which had reasonable hardstand but zero storage facilities and no room to grow the business.

"With things expanding rapidly and the requirement for general freight movements out of Melbourne to Adelaide and Perth growing, the decision was made that we needed to make the adjustments if we wanted to expand further.

"We moved out of Cawley Road, leased just next door here – an ex-Scott’s yard – for around 12 months while this one here was being built and now it’s given us an opportunity to grow the business.

"We’ve got a 6,000-pallet storage space out there, which we’re working on with some clients at the moment.

"We’ve got a strong sales team in each state now, and with them on board we needed to do something – otherwise there’s no point having [them].

"Basically the requirement and demand led us to looking at something bigger and better in Melbourne. And Melbourne being the hub for our business, it was time to make the move.

"Without Melbourne and without expanding, we may as well not have a transport company."

Curran adds that he came on board through this process of where the company wanted to go and expand and change the business, and become more dynamic.

"The business never really pushed itself out there to get recognition for anything. What we do, we do well," he says.

"So now it’s more about being a bit more aggressive in the marketplace, get our name and brand out there."

BIGGER PICTURE

Railroad employs about 160 staff in total. All up, its South Australian, Western Australian and Victorian depots occupy more than 51,000 square metres of storage space and are strategically located adjacent to rail lines and main arterial roads.

Adelaide and Perth are predominantly receiving states, with all the freight coming out of Melbourne.

"In Adelaide, we also dabble in a few different things like fuel and pneumatic tankers and a little bit of warehousing. We’ve got a three/four-year-old facility in Perth now, which has about 2,000 pallet spaces that are now full," Williams says.

"Some of those clients are looking to move the work to Melbourne now that we have this facility, so it’s basically about keeping our customers happy."

Railroad deals with freight such as food, refrigerated goods, oversized loads, machinery and cars, and other special requirements.

One of its higher-profile responsibilities has been to transport and assemble the equipment involved with the Superloop 500 V8 supercars race on behalf of the SA Tourism Board, including track components, staging and seating.

Railroad’s fleet includes road trains, B-doubles and triples, semi-trailers, side loaders, prime movers, rigids, straddle carriers, forklifts, container handlers, low loaders and tankers.

It has about 60 of its own vehicles on the road. Additionally, some 140 subcontractors, 80–100 of which are permanent, run up to five-and-a-half days a week.

In the yard sits a new Scania and it’s clear the company has a preference for European vehicles.

"Truckwise, Railroad’s always been a supporter of Volvo. Recently, in the past six months, we’ve made the switch to Scania," Williams says.

"We have three Scanias, and another four on order for this year.

"We’ve found what Scania is offering at the moment with their service agreements [five years bumper-to-bumper] we can budget for that and don’t have cost blowouts.

"We’ve also done analysis on fuel consumption and getting 2.1–2.3 kilometres per litre in early trials with the Scanias, which is $15,000–$20,000 worth of savings per truck with the kilometres we do every year.

"Numbers don’t lie. Those things you can’t turn a blind eye to."

Railroad uses Southern Cross and CIMC trailers for its linehaul operations, but has recently bought two new performance-based standards (PBS)-combination Vawdreys, which it plans to buy more of in the future.

FUTURE AMBITIONS

Getting the Melbourne depot up to capacity is the short-term plan for Railroad’s management, but there are bigger fish to fry in the future.

"Future direction for us is to fill this Melbourne facility with 3PL clients. We’ve got quite a few which we’re in discussions with," Williams says.

"We’re also looking to develop our wharf infrastructure – we do a bit of wharf work at the moment. We want to introduce quarantine and fumigation work into this facility as well, and get our proper accreditations.

"And the next step is to definitely become a national supplier.

"We do service NSW and Queensland now through a third-party but that’s not always the best solution for us because we tend to price ourselves out of the market a little bit.

"But we definitely have started talks regarding acquisitions potentially to put us in those states.

"With the sales team we have on board, probably within the next six months we aim to have a footprint in those two states."

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