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Report: Australian rail freight revenue to increase through 2014

Report: Australian rail freight revenue to increase through 2014"

IBISWorld has released an updated version of its Rail Freight Transport in Australia research report, as deregulation and infrastructure projects have led the group to change its predictions and estimates for revenue growth.

The new report shows that a change to the structures of the rail freight industry and higher-than-expected investment in rail infrastructure likely sent revenues higher than previously thought in the five-year period leading up to 2014. The update shows that revenues will likely rise 4.6 per cent between 2006 and 2014, driven by higher growth in downstream resources operations.

Much of this growth was thanks to the mining sector, which has significantly improved its exports of coal, iron ore and other raw material cash cows. Although revenues dipped in 2008 and 2009 because of the global financial crisis, and again in 2010 when flooding hit the mining sector hard, revenues should bounce back by the end of next year.

In the 2013-2014 fiscal year, revenue is expected to increase 1.7 per cent to $7.3 billion.

"The industry's current operating environment is the result of successive deregulation, infrastructure spending and transport policy decisions," said IBISWorld analyst Caroline Finch.

"The challenge for the industry lies in increasing competitiveness in non-bulk markets currently dominated by road freight," she added.

In the past, Australia's rail network was controlled by the states, so they could focus on the primary markets of their respective regions. However, the privatisation that has occurred in the last decade has created a much more federally run rail system.

The report concluded that as demand for minerals picks up and the industry focuses on bulk markets, there will be a rise in the amount of materials shipped by sea, which will in turn require more rail activity.

Interconnect Systems has more than 20 years of cable engineering industry experience, and can work with you to find the solutions that best meet the unique needs of your next mining rail project.

For more information, and for advice about choosing the right cable and wire harness and composite technologies, contact Interconnect Systems today by calling 1800 812 214.

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