Qube Holdings Limited (QUB) Earnings Call Transcript & Summary

Good morning, and welcome, everyone, to the Qube Investor Day. Both those who are with us in-person and those attending online. My name is Paul Lewis, and I look after Investor Relations at Qube. I'd firstly like to in the spirit of reconciliation, on behalf of Qube acknowledge the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to the elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Island people here today. For those who have followed the Qube journey over many years, you'd know that while our vision and strategy have remained constant over more than 15 years, the business itself has changed significantly over that time. The most recent significant change was the sale of the property and warehousing components of Moorebank, which completed in December last year. In addition to delivering significant value and cash for Qube, that transaction returned Qube to its origins of being a highly cash-generative, leading logistics operating company. Given that transaction completion, we felt it was an appropriate catalyst to hold an Investor Day to tell our existing investors as well as potential new investors about the Qube business, our key markets, the sites in which we operate and why we remain very optimistic about the multiple growth opportunities facing our business. I'd firstly like to introduce the members of the Qube team who are here today. If you can just make yourself known. Paul Digney, our Managing Director; Mark Wratten, our Chief Financial Officer; John Digney, Director of Logistics & Infrastructure; Michael Sousa, Director of Ports; Todd Emmert, Director of Bulk. These are the presenters today. Also attending Shane Collins, our Director of Strategy and Development; Ben Pratt, Director of Corporate Affairs; William Hara, our General Counsel & Company Secretary; Emily Link, Director People, Culture and Safety; and Belinda Flynn, General Manager Safety, Health and Sustainability. You'll hear from a number of these individuals, as I mentioned, who will take you through their respective businesses. And we also have other key members of the Qube team around today, and I encourage those who are here in person to reach out to them during the breaks and after the formal end of the day. Just -- so you can see firsthand the vast experience we have amongst the team, but also the passion and enthusiasm we all have for the Qube business and outlook. You'll see the agenda today. So the intention is to go through the key business units and talk a bit about the outlook from the key team members. As you'll see during the course of the presentation, Qube operates in over 160 locations. So given it's not practical to actually do site tours to visit the physical locations, we've put together a number of videos, showcasing the diverse nature of what we do, our scale and competitive strengths. And we'll be showing those videos throughout the day during the presentations. For those who are in person, we've placed USPs on the table, which contain today's presentation as well as all the videos that we'll be showing. And there will be links to these videos on our website as well. These videos really showcase the substantial investment that Qube has made over many years in infrastructure, in property, in equipment, in technology, and of course, in people to build unrivaled scale and capability. This has and continues to enable Qube to deliver superior, reliable and valued logistics services across our core markets and has enabled Qube to become the market leader in what we believe are very attractive markets with a highly diversified long-standing customer base, who understand and value the unique services that Qube can offer. There should be ample time for Q&A during the day, and online participants are able to submit questions throughout the presentations via the box on the right of the streaming platform. There will be a short Q&A session after most of the speakers, and we ask you limit your questions to the content of that speaker. At the end of the day, there will be a general Q&A session where the speakers will be on stage, and you can ask any other questions of interest or any questions not covered. To the extent that we can't get through all the questions during the formal allotted question time, we will post a Q&A summary on our website with the main questions and answers. And as always, the investors or any party are free to reach out to me after the day with any further questions they have. In terms of structure of the day and other formalities, the agenda is on the screen. As you'll see, we'll have several short breaks with the aim of having a longer lunch break around 1:15 and concluding the formal session at 3. For those who are in person, just some formalities, the bathrooms are located out the doors and to the left. In the event of emergency, the emergency evacuation door is to my left. Proceed to the nearest stair and do not use the lifts. Who are still in the room, please turn their phones on to silent and not use them during the day or if you have to, please go outside. Online participants will be muted throughout the day, throughout the presentation and as noted, can submit their questions online. This Investor Day is being recorded, and we will make an edited version available as soon as possible after the day concludes. With that, I'd like to get things underway and call our Managing Director, Paul Digney, to start the presentation.

Thank you, Paul, and good morning, everyone. A little bit about myself. I've been at Qube since day [ 1 ]. So I'm 15 years at Qube. And as Paul just mentioned. I'm very passionate of Qube, and I won't apologize for the passion that's going to be shown today by myself and my team. From time to time, and in recent times, we get a lot of questions asked or the same question I ask. Qube is quite big, quite complex now, what's inside Qube? How does it make it -- how does Qube work? What makes Qube tick and more importantly, how do you fully value the future value of Qube? So today, over the next 5 hours, myself, and I'd say we're using a logistics team who'll try and unpack you today for you a little bit further than you probably had seen before. And as Paul mentioned, we've got a number of fantastic videos that demonstrate a lot of our supply chains, which will be better than any site to that you've ever done, I believe. So, wait for those videos, you've got a virtual tour over the next 5 hours. And hopefully, by the end of the day, you will know a little bit more about Qube than you did before you walked into this room. And you can better appreciate our key strengths, the quality of our diversified and integrated and robust business model that we have built over the last 15 years, and the many opportunities, growth opportunities and the avenues we have ahead. I'd like to start with Qube's vision and strategy to kick off the introduction to Qube. And what we've -- and how we've got to where we are today. A vision that has not wavered and a strategy that has not wavered since the start, but has just strengthened. There's a bit in this slide, so I'll give you a couple of minutes to go through this slide. In 2007, we set out an ambition and aspirational vision, which I'll come back to that later in the presentation. To be the leading provider of integrated logistics solutions focused on the import and export supply chain in Australia. And along that journey, we expanded this vision to also capture the forestry market in New Zealand, the energy markets in Australia and Southeast Asia, and selected domestic supply chains in Australia, usually driven by our customers. On this slide, we highlight our key operational and key focus areas. You've probably seen this slide before. Most of these -- most of these focused areas are unchanged from 2007, and grown to be our key strengths. But I listed on this slide, and I need to call them out to give the justice. Build scale and expand capabilities; diversify by market, customer, product, service and geography. Invest in key infrastructure assets; drive innovation and technology initiatives, focus on safety and our people culture; build a highly experienced team, focus on delivering positive customer and shareholder value. Maintain a strong balance sheet for funding and growth. Ensuring we remain lean with variable referability in our cost base. Remain highly diversified and agile. To manage downturns and sectors. And to manage any inflation. Our key strength and a key strategy that has been very effective at this point in time for us. And to drive and Mark will touch on this later -- to drive financial accountability at all levels within our business, which are now over 200 profit centers. And in recent times, we have added our decarbonization plan to our operational strategic focus. All of these areas I've just mentioned have focused our strategy to deliver a sustainable, competitive advantage against our rivals. These focus areas will continue to be our strategy and our strength going forward. I thought I'd set aside 10 minutes, it's really important to me to do this because I like telling the story because I've been a part of the story for 15 years. This is to set the same around our history in the story of Qube and how we've evolved. Over the next 3 slides, we will break down Qube's evolution into 3, 5-year periods. Highlighting some of our key milestones, our brand development over the 15 years, which would demonstrate our deliberate strategy to secure locations, expand management and expertise, expand services, expand products, expand by geography, across many supply chains and to consider new supply chains in our portfolio. I'll kick off with the period in 2007 to 2011 before the Qube brand. For me, this is a really exciting time. We're a little bit low, we're small and we had to take some calculated risks. Within the first year of this period, the GFC hit. It was an oh moment for us. We are very small, and we had to make some -- considered calculated decisions. Do we go hard? Do we become conservative? But we made some calls and we got some investors to invest more money in us. And we're able to build some acquisitions in that period. So what comes first in this period was the initial P&L acquisition that provide the platform to start up our container logistics business and our automotive and general stevedoring business. And we organically started the global freight forwarding business from day 1. The Qube focused on building scale by smaller bolt-on acquisitions and securing key ports and rail sites and many key based contracts such as Woolworths, "K" Line and WWL in the 2007 year. During the period, logistics operations expanded its footprint further in Fremantle, Brisbane, [ regional ] Queensland and Adelaide for our modest acquisitions. As you can see on this slide, there's names Baguley, Sea Cargo, Mackenzie's and Troncs. They're all family businesses that joined the Qube family. We made investments in automotive logistics businesses, such as AAT and Prixcar. And we also made an investment in NSS, a port and logistics company in far North Queensland. And in the back end of this period, the early foundations of our rail, our bulk and our energy businesses were being developed. We focused our rail business on the import and export container supply chain. The bulk business started up a big development at Utah Point and the energy business focused on the oil and gas market. We also secured an initial 30% interest in Moorebank during this period with partners, Stockland and QR. And at the back end of this period in 2011 the Qube brand was created. 2012 to 2016, the Qube brand. We've got our own brand now. We're getting serious as a company. We're building a corporation. And actually the plan that we started off is putting -- is coming together. So the Qube brand emerges with a number of supporting sub-brands, which I'll start to refer to a Qube brands from now on. Within Qube Logistics, Qube Logistics expands further in acquisitions in Melbourne and Sydney and develops its intermodal capabilities in metro rail hubs in Sydney with the development of the Minto and Yennora intermodal sites. Our Specialised Logistics brand commences on the back of over CRT and IML acquisition. Qube Rail expands further, now starting to provide bulk rail service, not just container rail services. In the ports and bulk business unit, Qube Bulk expands its footprint across Western Australia with the help of the Giacci acquisition and Qube Bulk rolls out its first Rotabox customer being Sandfire. Qube Energy gains momentum with its first major customer win in Chevron. Qube Forestry commences with the acquisition of ISO in New Zealand and the Qube arrives in New Zealand. Other key highs made here. Qube buys 50% of the Patrick's container terminals with Brookfield as a partner. I'll talk more about Patrick's later. Also in 2016, Qube becomes the 100% owner of AAT. And Qube makes further investment in Moorebank by buying out its partners in that period 2017 to 2022, further growth and expansion. Another exciting time for Qube. We've got scale, we build scale now. And we have emerged, if we hadn't emerged already. Everybody wants Qube. Customers come to us wanting us to do a service. It is a reverse procurement approach. Employees want to be employed by Qube. And now some of our competitors want to know what Qube's doing and they want to be like Qube. So in 2017 to 2022, the Qube brand emerges even further. Within Qube Logistics, Qube Baguley brand emerges with up-country storage expansion for grain. And with the acquisition of the Newcastle Agri-Terminal in Newcastle, just recently, and the buyout of the Quattro shareholders at Port Kembla, providing Qube with 2 export grain terminals in New South Wales. Qube Logistics further expands its footprint across Eastern Australia with the acquisitions of MCS and Chalmers and builds new warehouse facilities in Melbourne and Brisbane. In the ports and bulk business unit, Qube Bulk further expands its footprint organically setting up operations in Esperance, Albany and Whyalla. Qube Energy expands offshore into Southeast Asia with a joint venture with BOMC, constructing a port supply-based facility in the region. Qube Forestry commences in Australia, developing our footprint, both for export and domestic customers. And ISO New Zealand rolls out a world-first log handling solution with our robotic log scaling machine and a new technology, a lot [ grab ship riding ] solution that has never been done before. And Qube Renewables is a brand emerges. Begins on the back of the LCR acquisition, as the decarbonization era starts in Australia. And with Moorebank, construction commences in 2017 and at the end of 2022, Qube monetizes the Moorebank property and warehouse development to LOGOS, but retains a majority interest in the rail terminals and the logistics operations at Moorebank. 100% ownership in the IMEX terminal and a 65% interest in the Interstate terminal, which is still being built. And on the back of that, the Qube Intermodal brand starts to assemble. The team will talk more about all these brands later today. Just to quickly summarize that. I know there's a lot of history on that, but I thought it was important to do spell that issue out. And some of you people would be aware of that history, but I'm very proud of that history, and it needs to be told again. And it sets up today in regards to the other speakers and what they're going to talk about and so you can understand the history of Qube. So the brands of Qube today look like this. This is where all the brands sit, the business brand sit within the Operating Division. And I won't go through these now because the business unit heads will talk more about this in more detail when they go through some case studies and some product -- and some of the products and the services they provide later today. But just on the right-hand side of this slide is our joint ventures. And I'll just call them out for reference now. So Patrick, obviously, everyone knows, I think, in this room knows Patrick, and I'll talk about that later today. BOMC is an oil and gas supply based joint venture with 2 partners, Gallant Venture and Singatac, where Qube Energy manages that port supply base today, and Michael will talk a little bit about that later today. Prixcar is an investment in an automotive and predelivery business with our partner, "K" Line. NSS is in far North Queensland, as I mentioned before, stevedoring and logistics business with our partner, Glencore. And IMG is a joint venture rail business with our partner, Watco, that supplies our Qube Rail operations in Western Australia. Qube organization structure. This slide is really for reference inside the presentation deck. I'm not going to go through each of these services because that's going to be the job of the team today. So it is just a reference slide and you've probably seen this slide previously in presentation decks. Okay. I'm going to have a little bit of a break now. I'm going to show you a video. So video called, This is Qube. It's a bit of a snapshot of what Qube looks like today. [Presentation]

That's just a teaser of the other videos that are going to come later today. So there's more to come. The next 3 slides demonstrates the scale of what we've built so far with our strategy and explains what underpins Qube today. This slide here highlights Qube's workforce and the geographic footprint. We now have more than 160 locations, I think, as Paul had mentioned in his opening speech, all across Australia and New Zealand and with respect to Southeast Asia. This highlights that we've got 9,500 employees today, including Patrick's employees. We are servicing approximately 2,400 customers which means this KPI [ does many things ], but we've got 4 people to every customer, but anyway, it's just that. The next slide here is Qube's key infrastructure assets. Total operation sites spanning over 1,000 hectares of Qube Logistics infrastructure. I don't think we'll ever imagine in 2007 that we'd have that span of operations sitting under this infrastructure as Qube. I think it actually went past our aspirations at this point in time. So for us, I think some people see us as a logistics company, just running trucks and trains, but what underpins our business -- what underpins our supply chain is this, over 1,000 hectares of Qube Logistics infrastructure that we operate through, they include 70 port terminals or port operations, 14 rail terminals. Now 2 export grain terminals, over 60 hectares of warehousing, over 25 hectares of bulk storage from mining commodities in the bulk business and over 150 hectares of container park storage or container storage across Australia. We've built this so far, and we're only going to build that further. The next slide here highlights our investment in quality, equipment and the size of our fleet today. We have a large equipment pool, but this large equipment pool is very mobile and is a key strength for us in our ability to mobilize for new business and be agile and to relocate between businesses when there's peaks and troughs. We've got a very diverse customer base, very diverse by product. If 1 area is down, and we've got a pipeline of growth somewhere else, we can relocate equipment across Australia to service our customer. And it's as really powerful for us to be able to get -- have that when someone wants to start up fairly quickly. And on this slide here, you'll see the -- I won't call all the fleets out, but all our equipment now has replacement programs, which includes transitioning our equipment to lower or no carbon use assets into the future. There's a little way to go with this, but the first thing we're doing right now as we're currently -- over the next 1 to 2 years, we are doing trials on all these types of equipment, either be electric, hydrogen or any other alternative fuels. We're going to -- we are committing ourselves to do trials on each part of this equipment. I don't think any other logistics company is making that commitment right now and that investment to do. So what does 2022 and beyond look like? Passion again. We have a strong portfolio of infrastructure assets and strategic locations adding the Qube expertise that we built, the workforce that we've got, the culture we've got and the systems that we think -- that we've created, our business foundation is very strong. We have a large amount of options to grow within our existing business, which we'll demonstrate throughout today. And as we have done in the past, we'll also look for new markets and services on new journey ahead. For example, our 2 new brands or sub-brands you saw on the brand side, being Qube Renewables and Qube Intermodal are new and are evolving at this point in time. So I believe the next 5-year block, this sets up to be the most exciting in Qube's evolution. And this takes me to the next part of my intro presentation, Qube's key markets and growth drivers. Firstly, I'll touch on our key markets. Qube's key markets, which is summarized here contain -- sorry -- our containers, import and export, agriculture, automotive and general stevedoring activities, forestry, project cargo, resources -- the mining resources and energy. As you see in this slide, we haven't captured all the products and the activities that fit in this slide. But in the following slides, when we break down per market, we actually list those. Because there are so many products, which I call submarkets within the market for us to grow through and many services where we can grow through. The respective business units will talk further on these products and services later in the presentation, including providing a current outlook on the healthy growth pipelines by market and product. Just for an example, and I won't take you through all 4 slides here. Just on this slide here, it has the container. The container market is one of our key markets. And as you can see here, it highlights a lot of key products, which I call submarkets of the key market. From import, products as grocery products to polymers to export products such as [paper], meat exports, we do all this at this point in time. Not for early run, and it's plenty of room to grow in all these markets and submarkets. This highlights the many logistics services that provide -- that we provide these customers in this key market. I will now skip a few slides and take the deck to Slide 27. So one of our key slides, probably one of the money slides today that I want to take you through. This is my slides, I better get it right. I know you've just seen the video, This is Qube. This slide is, This Is Qube, the business model. Our growth is driven by many drivers, and I have summarized them here into 3 areas. The first area is our existing customer base, which when we're just talking to outside people, I feel like that this is -- could be the main driver, but it isn't. It's our base -- it 's our base volume. It's a growth by product demand from our existing customer base that consists of existing contracts. But this tends to be a small part of our growth each year and our growth opportunity. It's our base, but it's a very diverse base, and it protects us, and it's a very robust base. The second area here is within the existing market, market share growth, within our current markets. Although we are a leader now in the key markets we operate or near on [ leader ]. Most of these markets, we don't have a dominant market share. As markets -- most markets are very fragmented with many competitors, we back our product now to win market share. We have the opportunity in most markets to grow substantially by winning new customers, building or expanding our infrastructure and sites or from a bolt-on acquisition as we have done in the past. And the third area on this slide in the multiple volume drivers is something new. A new market, and as I mentioned before, currently is Qube Renewables or Qube Intermodal or Qube something else or a new product that we haven't handled within an existing market or a new service that we haven't yet provided within the existing market. Something new can be organically built or can be built by acquisition, which we've done in the past. This takes me to the second part -- second message in this slide, which is basically Qube's DNA. It's our business model that's Qube [ 101], which is combining our volume growth with our diversified value drivers, delivering benefits of our economies of scale for both Qube and our customers. Our diversified value drivers come in many forms. A couple of examples here. Multi-customers using multipurpose purpose sites. There's economies of scale in that. Multi-customers optimizing large truck fleets. There's economies of scales in that. Delivering productivity via technology innovation. We have a very good track record on that item. The economies of scales of our overhead now that we've become such a large business and creating customer volume through our integrated supply chain, which potentially creates pricing value. So I agree, we are in the best position ever to achieve the best out of this business model. Delivering long -- sorry, delivering sustainable, long-term growth, both top and bottom line. Why is that so? Is due to our size now, and this is due to the opportunity that we see ahead, that we'll be able to deliver more value going forward. I'd now like to take a break, and I want to show you 2 videos. The first video I'm going to show you is a video Qube Integrated supply chain for many customers. It is the journey of a container from being -- from an import to an export. Sometimes in that journey, from many other customers, we will touch this container many times. There may be up to 10 transactions on the freight both ways. So 10 transactions, 10 revenue opportunities. So this video will demonstrate a container going through at Patrick's Port Botany. On to the logistics operations, import operations through transport, warehousing it will end up at a container park, a Qube Logistics container park. It will then get ready for export. It will then go on the export journey through Qube Logistics, through transport, handling and packing and will end up back at Patrick's to be explored overseas to its destination. I'll now play this video. [Presentation]

I will go to second video. It demonstrates integrated supply chain in another way. [Presentation]

Well, I was going to say before the video playing as the first video you saw was obviously an integrated supply chain with many customers. And that was -- and that -- the wind farm project there was 1 customer going across many parts of Qube. So it went from the AAT facility, the open access facility at Fisherman's Island. It was stevedored by the Qube ports operation. And then it was transported by a heavy lift in our renewables team. Of port to a logistics site where we've got laydown here, we've got spare capacity for laydown here. This wouldn't have happened and you couldn't put this all together. No one asked to put this all together in 1 show. Then it was lifted back on through Todd's team and the renewables team at heavy lift, out to the wind farm location. So all across Qube, we're able to deliver that supply chain. So I think that's powerful. And the other video is fairly powerful because, now we'll be able to touch a container's main terminals as we could through out supply chain that we just demonstrated then. And no one could actually do that wind farm logistics through just 1 provider being Qube. But we did then. That's what we've built. All right, my last part of my introduction, I might get a little bit passionate here too, Why Qube? The first example here I've got is, Why Qube? A plan to thrive. This is Qube to a T. We put a [ One Qube ] program out, which is a recent program and everyone jumps on board. Our culture is superb. This example is why people choose or should choose Qube. This slide highlights our new thrive program on 1 page. The program is an internal refresh to reflect on items such as our vision, our values and our purpose. This is a great example, why people should choose Qube and will chose Qube. Throughout the -- in the main is designed for us to reflect internally on what we've done well so far and recognize where potentially we could improve next across our strategy, our vision, our values, our purpose, our personality and our culture, our promise and our priorities. And our priorities being safety, well-being, planet, opportunity and performance. The planet pillar is where our decarbonization plan sits today. Thrive at Qube is a great example of how Qube looks to build on its key strengths and throughout, to not be too complacent and look to continually improve, which is a key strength in itself. In the back of your presentation today, we have touched a thrive [indiscernible] and I suggest you take an opportunity to read that and also our decarbonization plan, which unless you may have already read that previously. This slide here -- this is another example why people should choose Qube. And this is due to the key strengths that we have established as a market leader. This slide for me is a key way why customers, employees and partners choose Qube today. Every box on this wall represents a key strength of Qube that we have built over past 15 years. Some strengths I've already touched on and some you'll hear more about as the day goes on. If it's a box related to our integrated customer product in the middle of this wall or it's a box that relates to our people, our expertise and our culture on the right side of this wall, all the box relates to safety, sustainability and governance framework, which we've built up over the last 15 years. On the left-hand side, of the wall. I believe, we, today, will be industry across all these boxes, if not most. And no one, I can say this, no one puts it all together into an integrated logistics product in the regions we operate like our [ One Qube ] product. All the business units and their profit centers have these strengths and their tools at the disposal of the size of Qube. And this is why Qube. I will now start to hand over to the team to tell you more about that business and unpack Qube a little deeper and demonstrate by Qube a little further. Thank you. That ends my introduction. I'm going to hand over to John Digney, the Director of Logistics and Infrastructure, he's no relation to mine.

Okay. You hear me fine up there? Hello, you hear? Good. Okay. As Paul said, I'm John Digney. Like Paul, I've been with the group since 2007, since the start of the P&O Trans acquisition. I've been the Director of the Logistics business since 2016 and then since 2020, I became the Director of the Logistics & Infrastructure business in the restructure, I think it was '20 or '21 round about that time. So I pretty much been here from the old journey as well. So just happens to be 2 years older than me. That's how it works, right. You'll probably a bit more bullish than I to be honest with you. Let's embark and see what it happens with me, okay? I'm going to -- as Paul has said, I'm going to try and break it down a bit further for the logistics and infrastructure business, okay? Here we go. So Qube Logistics and infrastructure is a pretty dynamic business and has been a big part of Paul's presentation how it's evolved, right? We're across 43 different locations. We have over 2,500 employees, direct employees, we would indirectly employ between 500 and 800 depending on scale, what's happening as subcontractors and things like that. We have over 1,200 customers that we have built up over that period from 2007 to now, which is quite -- quite dynamic for our business. And before I get into logistics the one-on-one, I want to sort of talk about what's on the right-hand screen, and that's some key drivers for our business. And first, I'll talk about what happened between at the end of FY '22, what we did. -- what we hold and so forth. So I'll start with the rail business and terminals overhauled in that period -- it hold over 5 million tonnes, which is a record for the Qube business. That's picking up 6 months of BlueScope business. And some extra gain that we picked up in that period. But that is a record for the business. And I'll talk a bit about '23 at the back end of this too, at the back end of this slide because I'll give you a bit of a taste for what's been happening for the first quarter. I won't go too far [indiscernible]. I'll always talk about port shuttle because that's my DNA. I've always been involved in the port shuttle business, the container [ handling ] business, as I said, have been for 30 years. I feel like having a good time as always talk about that volume. And I think it's important for us to talk about that volume, because as the IMEX, which is the Moorebank Intermodal terminal, automation technology comes on line, which has start to come online now. There's always questions around when are we getting the volumes of the famous million TEU. So I will always update you on that sort of stuff. As you see, we did 400,000 TEU through the network, that's not necessary in IMEX as through the containerised rail business. It's always a growing market first. There's a -- there'll be a bigger growth this year in that period. And as I said, the IMEX facility over the next 2 to 3 years, comes online. We're going to automation in --we're basically automated now. So we're at the first stage of that. So there's going to be a good growth over there, as I believe in that story, it's true, it's coming. There is a mobile shift happening there. I talk about our warehousing business, which is an organic growth inside our logistics business. It basically has come across from the acquisitions we've had, not really the acquisitions we have, but just developing from an import export market, realizing inside of those businesses we're going to have scale. So we build that scale. We currently got over [ 60 ] hectares there, which equates to probably 600,000 square meters of warehousing on the roof, which is not necessarily big in the market, but we've got a growth strategy there. We'll talk about that a bit. Paul spoke about a container, like a story of a container, I'm trying to break that down a bit further again. So we handled about 2 million containers through rail network, be it through empty container parks, freight stations on the back of trucks -- on the back of trains. So that's sort of giving you a gauge of every time I handle a container -- or charge for container. So that's a driver for this business. And the other -- the new fully sort of followed or culturally followed to the one, which is sort of stable. So is the Agri business of Paul spoke about. This is above throughout COVID. We've got a fantastic asset in Newcastle now. We've got a fantastic asset in Port Kembla now. It's sort of great export agri terminals. We've got some great outcomes of the accumulation now, and we do the part in the middle, the rail part. So we're up in that complete solution. We're not -- we wouldn't be holding rail part because it's -- it's had a -- it's basically had a record result in FY '22 since the inception of these 2 businesses, they've never done that volume, they've done -- one's done -- the Newcastle business did about 1.4. The Kembla business did about 1.2 of that volume. And again, I'll get back to '23 and I'll tell you what they can do, right? So that's very -- if you look at that business, it's very similar to the GrainCorp business in New South Wales. The only difference is that at this stage, Qube doesn't try to go in. So as long as our infrastructure is good. So I stay on this slide for 1 second because I just want to highlight the rail business, especially in the ballpark, the 5 million tonne. Obviously, that was a part year for BlueScope, a part year of Glencore, a part year -- full year of the grain because we brought on some new bulk wagons. So there will be substantial growth in FY '23 for that part of the business. We're always growing the TEU business, the 400,000 TEU that will grow again. That will grow bigger -- bigger probably in 2 and 3 years, not really next year, but we will still have growth, but I see more growth coming on with automation of Moorebank and build out [indiscernible] there. So that's coming, as I said, I keep saying, that was baked in that story because that story is real, there is no shift. The warehousing business currently at the moment is full. Like most of warehouses throughout Australia, they are chockers. When the supply chain changed, it's gone to just in case. A lot of the warehouses out of Australia are full. However, we've got a great stay there. We've got about 150,000 square meters coming online between now and the back end of '23 and with a strategy to get to by '25 to about 1 million square meters under group. So we'll be a serious player in the warehouse business, not that we're not now. And that's driven really by our container business by the import export business. We're not in the domestic warehousing business, we're more in the -- more in import export which drives a lot of warehousing business now. And -- well, the one I love and one of my babies rather -- sort of my babies too, the agri business this year. So if you look at -- also that is like the hardest, the 2.6 million tonnes. So that's CY '21 to CY '22 when you talk about how the scenario is so same. November to October that's what we're really saying. This year, we're already prebooked from November a little bit later because of the harvest because this weather will be a bit later. They're pretty good for 3.4 million tonnes. So that gives you an idea of what -- if you can control the supply chain where you can push through these things. And we have a stretch of 4. So when I say, we're prebooked, we're booked. So a percentage of that is paid upfront. Obviously, not upfront, but it is a book. So part of that rate card say 30% of the rate card is paid for. So it's been a real success story, with plenty of granularity at the moment. So -- and as I said, we don't change this claim, we just facilitate the structure basically, but we own all the infrastructure. And other layer of those users is an open access top regime. So we'll probably do over on the whole probably the 1.2 million of the 3.4 million. Otherwise it might be 1.2 and [indiscernible] might bring 1.2. But I just did our piece. We do the country piece, and we do a lot of -- we did all of our country piece and our customers will do that and we'll do all the export piece at the end of the vessel. So it's quite -- we're quite excited about that business, and that's only in New South Wales, and we know that people have doubted, which can happen sometimes, but there's an address for a while. And we think within businesses area of growth, be it using [indiscernible] business that have a lot of poor locations throughout Australia where they could do part services, maybe 600,000 tonnes through Western Australia, for example, or somewhere. Not saying we guarantee it, it's just that's out there. So, the only thing is going be a summary where we're going and the first quarter, they are all unordered, but there are volumes that have really happened, so. Okay. I didn't touch on this slide, but this slide basically breaks down the suite services, the logistics business, infrastructure. It's quite a busy slide, as you can see, it's just got -- there's probably 24 types of services that we have in place there. We have no one real competitor that offers all those services. We've had a strong competitor in rail. We'll have a strong competitor in ACP, we have strong comparison in areas, but they don't have the whole range of services. So we're offering the whole range of services. And you might ask, is that a little bad, I'll try and break it down to -- I'm trying to break it down a bit for you. I'm trying to break down a bit for you here. In the containerized rail piece -- in our container lease piece. So offer a containerized rail piece -- what Paul spoke about, the journey of the container, basically the journey of the container. So in 2012, we had a customer called Giacci that we summoned up to offer an export containerized service, out of one of our facilities, one of the ACP facilities at Port Botany which had one facility at Harefield, which takes 70-30 down there every day or 6 days a week. Our facility was our regional facility at Harefield where we would then take up the empty containers, reload that with the Giacci containers that would come from their mill. So Giacci had other business export in that region. We come from their mill and they'll reload it onto the train, the train will come back into an intermodal terminal in the metro, places that Qube owned and then from there we would then as the best for us to say that we would deliver to the world. So, it's a closed loop service that we offer basically. So what changed from that in 2019, so we had this contract for 7 years with Giacci, it's 1 of our biggest containerized export contracts we had for rail, what changed was that Giacci decided that they want to have their own regional terminal. So with order cancel and with some funding from the federal state governments, I can't recall which one it was. They've got a terminal in water, right, which meant that our port facility was no longer -- it was made redundant for the containerized business, which that wasn't good at that time, but we understood why they wanted to do it. So Giacci then decided to take the whole business out to tender, which they did. So we received the tender and we looked at the tender, are we going to tender we could do with our range of services we have. The only one thing left out of the tender was the Harefield piece, so we looked at the tender, we could have applied in 2 minutes. We applied in 4 days without being arrogant because we just took the Harefield cost out of it. So then Giacci took the rest of tender to [indiscernible] and find the same suite of services, they can do that. There's no problems with doing that. But they went to one rail operator, which will be PN, the ACP was DP World and the Intermodal facility was more than likely to win, I think, I don't know for sure. So then you got the 3 operators who do that. In the end, they got too hard, what ended up happening is we've just signed Giacci for another 7 years. We have the contract of 2029 and the reason why we've been able to do that is that we have the range of services on this world that we've built over 15 years. So that was the reason. If you wonder what happened to the Harefield facility, what did you do with the Harefield facility. What we did with the Harefield facility was we got rid of the [indiscernible] Harefield facility and where we are in the process of doing that, and there's now a bulk facility feed now for Agrigrain export terminal, so it has rail access. So in the end, it's been a good story for us, and we always go back to the world of services that we have there. And is this -- we're always in the game. We're basically always in the game of the customer. So we lost a small part of it, but we maintained another 7-year contract with Giacci. So it's just hard -- not the Giacci -- Giacci could've changed but they didn't want to change and deal with 4 players, which is too hard. So we offered that complete change. Okay. One thing I haven't touched on that slide then I will touch on it in my case studies is that the aggregate export piece, I've got a case study on that. I touched on that, and I'll touch on the bulk rail and I'll also a bit of a touch on the port assets. So, Paul did touch on this slide, why chose Qube. And I'm going to give you a live example of why you should chose Qube. It is pretty simple why he chose Qube, but we went through that, but I'll give you another reason why. In 2020, we were approached by BlueScope for them to better understand our business so we could tender on the work. So they knew, we have the operational ability to do their work. But they wanted to understand the wider base of Qube. So we've tried to break it down and we're breaking it down on this -- on this slide we got here. So I wanted to understand whether we had world-class safety systems, right, which we delivered that and Belinda is in the room here somewhere, and she was a great part of that for us from a viewpoint of our corporate safety systems and also our safety commitment. But also I wondered whether in Qube did you -- a fully going to have a lot of transactions in this period. Have you got some of that -- the cybersecurity piece. So it is an indirect alone, we delivered that, we ticked that box. We ticked the box of governance with them. But one of the real big things with BlueScope they want to understand whether we have the financial capability? So what did that mean by that? Well, if we're going to get to this work, you're going to have to go buy $120 million worth of equipment. Do you have the balance sheet to do that? So we're showing that sort of stuff. They didn't know at the time, they weren't sure, so Mark and his team. It was not Mark, but it was Paul Lewis' and his team who were looking at that. And obviously then, they wanted to know whether we have the IT in the operation and we produced that to them. So this slide gave them a level of confidence to say why you choose Qube. Obviously, then we sell on the customer service point of view, and we did that in that process on the customer service point of view. You can't really sell it if you're not doing the work, but I would say -- I would tell you now we're 10 months into doing that contract with BlueScope. And in that 10-month period, I reckon if anyone asks them for a reference now, they would give us a glowing result. So that's the reason why I would choose Qube. And that's the reason why BlueScope chose Qube. Okay. First case study of Qube, I got for case study 1. So that is -- this is our port strategic assets. This is what it looked like in 2012. As you can see, it's got a -- we've got 25% of the AAT side, we've got a little bit of Prixcar and a little bit of Qube logistics. So that's just the P&A change acquisition basically that happened 4 or 5 years before that. So going forward a bit -- back sorry. In 2022, this is what it looks like now. We have 100% of AAT, Prixcar has moved and got bigger. Qube has brought that renewable laydown area that's in that slide there with the little box. The rest of that part is all pure logistic containerized businesses. Capably in these services here, and we read to the world that we had before the DP World -- all range of services that Qube would be -- we will be doing on these port area. The demand for this sort of service is as it stands at the moment, because it's moved from adjusting case, it has seen great demand support for port business as it stands at the moment. So there's also a great area for future development there. So we don't -- I think we've got a warehouse for building just down the road there for 40,000 square meters. So it's -- and this slide here, if you went to Fremantle, you went to Melbourne, you went to Sydney, and you went to Adelaide even though there's no major port it is a very, very similar assets. The type of services that we've done here is rail transport, container storage, empty container part, warehousing, et cetera. So, it is a quite a strong strategic assets we have alongside all the containers ports in Australia. The only thing we don't get here in this slide is we don't do much rather than Brisbane is yet, but we're looking to do some. I touched on our rail business before initially, and I want to talk a bit about our growing rail services that we have. There's a short video here, that's not that short, it's about 4 minutes. And the 4-minute video is about BlueScope story that was started and the Glencore story, those are 2 contracts that we won throughout the pandemic. But both of these customers come to Qube. They initially didn't go BlueScope because we thought, well, when I went to tender, they will just price check this and I'll say we'll pursue it national. So we weren't going to go there. They come and see Paul. We thought we were a bit of [indiscernible] , and they can give us to tender, so they did. And our team really convinced us to tender. So we went about the tender, we were successful. Here's little video, we showed a video on that and video on the Glencore train. The Glencore train is a train that we stood up in April of '22 and that's a train between Mount Isa mines and Queensland. [Presentation]

So as I touched on, I mean, the rail business is a great growth area for Qube. We've grown substantially in the containerized import export business, and we'll continue to do that. We're now getting some real credibility in bulk rail, we'll continue to grow on bulk. We see that is a good opportunity for us. We'd like to do stuff with Australian infrastructure, but we will grow in our bulk business. Next side, so with the rail business, where do we go to next? So we go to -- we're not going to go to coal because we can't do that, and we're not going to do that anyway. So where do we go to the next. Well, where we are going to next is -- as of Monday next week, we start Melbourne City service. So we are going to begin an interstate service. I spoke about my 1,250 customers. A lot of those customers are on road now, they want to get the rubber off the road, they want to go to -- they want to do this big [indiscernible] that we spoke about, and so we are starting a service, which is a bit of a hybrid service on the feed for our infrastructure at either [indiscernible] at the moment and then the view is to grow that service. So, we've currently got on order 230 wagons, which will get here between June '23 and the end of December, so [indiscernible] locomotives and 230 wagons and they'll be a dedicated containerized. We're not competing with the [indiscernible] , we're doing a bit different. We're going to have a bit of book there on the stuff like some of our customers like Giacci, who wants to get a lot of this stuff off the highway, has a lot of domestic stuff down highway. So a little book there, it will be different than that. So they will take a 1/3 and we might take a 1/3 and et cetera. So we just get us to the market and work with these guys, and we've got the terminal in Australia -- this is more on the East Coast that is going to happen. But first, we're still working through a business solution. We have Sydney and Melbourne, obviously building the interstate service -- interstate terminal at Moorebank, and that seems to be really low. So at the moment all rail operators came in that facility. So that's going to get up and going pretty quickly. We've got a facility in Triangle, Victoria that we can run these services between and there's an option we've got with the government with Beveridge that we're looking at, too, which makes a lot of sense to me. We had arrangement with Adelaide and we've got joint venture partners, we've got 3 facilities in Western Australia, which is more dedicated to import, export, traffic. But access to the terminal -- so that's the next step through logistics and infrastructure and that piece is to -- it's a natural progression for us as we step into a safe space, but a bit different than how the other guys deal we think. That's a bit on the last. I think I've missed much. I think the only thing I'd say about that is the highway is getting so much harder to operate on this shortage of truck drivers. We don't see it in the mix much, but on the highways and tough regional areas, there's a bit of a shortage out there still. So on the cost now so a lot more expensive with inflation. So that's one of the take aways for you. Okay. Now this is -- I'm trying to finish strong here, there is a stage in the middle there. Right, okay. So Qube Agri, so this is the Qube Agri business that Paul spoke about, and I also spoken about. This business evolved throughout -- we always do evolve through the COVID we're going to think about it. This is the only -- this is latest big acquisition in the Qube Logistics Infrastructure was [indiscernible] happened before that we at 100% of [indiscernible] the versus the mid-case agri terminal that was in '21 of September. So that happened through the COVID period, we got that run away. So it gave us -- what it has given us is it has given us a northern export terminal and the southern one. So if you look at -- it's pretty simple. If you look at the slide up there, we have the reasonable storage and how many facilities up country. We've got 3 now with great load that we spent some money on the loadout facilities there. So we can load trains a lot quicker over there. The third one being there [indiscernible] coming on, then our customers, our traders have some. So collectively there will be accumulation. Obviously, we pick up some from rank up side. It depends on where people buy from because the whole -- we've got good accumulation areas through New South Wales. We had rail capability we spoke about that with the other rail capability and the volume goes through there. We probably won't get ourselves to handle, we'll de-risk this a bit because other rail operators there, they've got rails like we talked about we the way they like I spoke about with Arozon and SSR. So we will always see probably say 1/3 of the volume doing or might be a little bit more. And then we've got 2 terminals, one in Port Kembla and one in Newcastle and at the moment they're beautiful assets, I just love them, just a lot of fantastic assets. So we're going to play a video on that to show the journey of this loop, so fire that up. [Presentation]

So the real driver for that business is the throughput. So as we said in CY '21 to '22 harvest year, we did 2.6 million tonnes. We've got a book now -- booked out for 3.4 million tonnes with a stretch target of 4 million tonnes. It's in our DNA to try and stretch it, so I think we'll definitely get somewhere between that 3.4 million and 4 million tonnes. Okay. So last slide here is just on the bit of an outlook for our business, short to medium term outlook on the products that we're all in. And how we sort of got this slide together, we've looked at our existing volumes from our customers, the markets that we're in within. We went through there, we looked at our existing new business opportunities with our customers as well. So the green means sort of high grade sort of above GDP, I suppose. And then the -- maybe it's probably GDP. And as you can see, there's not much lower at the moment because there's such a strong demand for our services at the moment, very strong demand for our services. With extremely good pipeline there for acquisitions. We haven't done many because of the COVID period. We did the 1 in '21 as a few we're looking at the moment, but we'll be patient about those and we'll do them right. So we're working through that. At the moment, just in closing, I suppose I can take away a few points from my presentation, but our business is a very robust and very diverse model we've got here. Our people and our culture will drive the business. One thing I have in my business, of heading my business is [indiscernible] and Mark will talk through a fair bit as well is that we have weekly accounting. I really love weekly accounting. It's just a way of managing the business. We've got a lot of IUs and it teaches my people. So [indiscernible] on the container park, he's in control, he's been now with his people. So every Friday, about 3 O'clock all the P&Ls comes through, and they can sell it up by state on a state-based operation. So -- and that gives me an opportunity with my people to be able. They can get on and run the business. If they've got a problem we know what it is. The weekly accounting forecasting is flashy, but it's pretty -- it's really spot really to be honest with you. And so it gives me, if I'm talking to Paul or Mark and the team how we're looking on the 21st of the month for business that turns over $1.2 billion, that can be very close. And that's very important for Qube and that is what Qube have always done. And Mark talks about IUs, you will see there are lot of IUs, it actually creates managers who actually understand their business. So that's a big part of our business, and that's why we got a lot of good managers in our business. As I said, there's a very strong demand for our services. There is a strong part 1 discussions about acquisitions. Our financial first quarter is absolutely, I will not say anymore, but has exceeded anything I thought we could do to quantify, I've never been busier. I'll take your questions if you got any.

So if anyone has any questions. We've got some microphones in the room. So just put your hand up.

It's Owen Birrell from RBC. Just a quick question, great breadth and depth of services and products and you obviously trying to make sure that you are so focused on each customer and each services you're providing. Is there any concern internally that you are stretching yourself too thin, I mean, in terms of your offering so many different varieties of services, is there a concern you're actually just taking on too much?

No, I don't think so at all. I think as I explained -- I didn't explain it that well but busy solution there was having that break to sales even though we lost a part of the regional upcountry piece by having that better services helped us maintain the main part of that contract, right? So I don't think so at all. And as I explained, all our best of services have a small IUs. When I say small IUs, there might be $10 million turnover or something like that. The manager is operating as well, that is growing with us, the management team are growing with us. They're looking to be #1, #2, #3 or #4 in those areas. If you look at something like in the breadth of services like a container, high-sales business, we started that because we've got the infrastructure of having containers all the time, where it works to be a big player. [indiscernible] is a big players, part of these guys will use our facilities anyway. So why don't we get into this market. So we got into this market, we're probably #4 in the market. The guy that runs it for me now wants to be #1. I'm just holding him back because container prices went through roof like everything has in that market. So it isn't the right time to expand in that market too far without doing organically. So no, I don't think so.

The only thing I'd add to that is you just look at the track record of the long-standing customers, the contracts we're winning and renewing. So the customer is clearly happy with what's going on. And I think as John says, it's a reflection of the quality of the management and the depth, and we are always expanding the team. When we do acquisitions, often a key part of it is the management expertise. We are investing in systems. So we don't take it for granted, we're continually investing and improving to make sure we keep delivering.

So I'll tell you what we don't do. This is what we don't in the rest of services probably should have done that at the start. We don't see a few trucks get in the highway, you don't see us do inland, you won't us doing that. And you probably won't see us at your house looking at TV, because that's just not what we do either in the past or so. We're still in that bulk logistics piece and those things all come in if you go through them, they do -- I mean one business we got out of was the silver business, so it is a little bit of our business too. So it makes sense to us.

This is the same question for Mark, you mentioned at the launch of the interstate rail products. I'm guessing that's sort of in advance of the establishment of the network as that starts to come through. Do you expect there to be a degree of land grab between yourself and other providers to try and gain customer contracts in advance of that in a rail?

I think that land grab is already going on. So I don't think that's it. I mean the [indiscernible] is one piece for us, but we think there's a shift happening any way. And we think it's a natural progression for our business. We've got the terminals. It's just gone ready to grow into those markets. The guy that's going to run that market for us is pushing 15 years, I'm not looking to go out sell the Qube sort of brand and services business and we'll market in the intermodal piece that Paul spoke about. So that launch is a soft launch. That train is only going to run 3 days a week between Melbourne and Sydney, it is just a -- and it booked pretty good with my customer base and we look to go into that market. So, it is not going to be everything, we're probably not going to go to the West Coast at this stage. And we're probably going to hang out in West Coast, it's just -- it's a stepping stone and we'll see where it takes us [indiscernible] . For now we're probably compete in that New South Wales piece.

Jakob Cakarnis from Jarden over here. Just 2 quick ones for me. Firstly, are you seeing a lot of competitiveness in the grain market. Obviously, Aurizon making their business to push harder into the grain market, seemingly to mix away from coal. Can you just talk to some of the competitive dynamics over the last maybe 2 years?

The Aurizon question actually I mean, to be honest, Aurizon were the underbidder for that. So there's only grain silos in New South Wales. So they're not pushing into that market because there's no other market there in New South Wales to be. From a grain point of view, I want Aurizon staying because I want them to keep feeding my facilities, as I said previously in the slide. I don't want to own all the bulk rail business and grain. I want to derisk it a little bit on that part of it and there's enough wagons out there and infrastructure out there to do that, servicing grain crops, so. No, what is your second -- second question?

The second one, will the -- you touched on it just modal shift between road and rail at the start of the year, we were hearing from the market that there's a 10x increase in some of those road rates. I think a lot of that was due to bad weather and pushing many volumes across maybe from rail on to road. Can you tell us where that settled versus a pre-COVID level and what that looks like, again, from a competitive standpoint?

Well, I mean, like there's services for truck drivers for starters, there are smaller operators, and I won't name the operator, who's just giving up now, running up and down the highway is just getting too hard. The rates have gone up substantially. I mean the big retailers are probably still be able to get reasonable rates, I suppose. I mean, one of my big customers, and I'm pretty sure one of the name is Giacci. As I said between Melbourne and Sydney, they're going to have a terminal between there and he has a lot of stuff on the road. He really wants to get his rubber off the road. So I think what has attractive obviously safety. And I think the decarbonization of what rail brings to it, I think in the end, it is what's going to happen, and we just get near probably at the right time, but again you'll never see us going down the highway with the truck. Well, there's a couple of areas we might have to, but as a whole it's not the business that Qube is in.

Scott Ryall from Rimor Equity Research. I was hoping to just take you a little bit further there. So your initial service is going to do 3 days a week, what is 20 locos and 330 rail is going to get you, is that starting to being a daily service. And I guess, to what you started to address in your prepared remarks, could you just talk to where you think you have a competitive advantage over some of the other rail companies that are already in between Melbourne and Sydney piece?

Well, we got a great customer book, and we see us a bit different to what they're currently doing at the moment. And this is really our opinion doing the service we're talking about now. I note that I think the largest rail operator -- the second largest rail operator when you're back into that market but just got out of that market 2 years ago. So I don't know what that's about, but they're coming back into the market. I just think are a little bit different. We've got customer base and good book build on it. And I think some good terminals and the terminals are always open access anyway. So we want them to use our terminals because as I said before, it is about throughput. So we're confident that we can build little bit our service, 20 locos and 330 wagons. Off the top of my head, we've got 12 locos at the moment. We're not going to go somewhere else. It just depends on how quick to build those. But I think that gets me if I remember 5 or 6 days a week, 1 way and 5 days a week the other way into Brisbane.

Sorry, you will extend to Brisbane as well.

Yes, that's the plan. We've just got to sort of terminals and so forth, but that is plan. Yes.

Okay.

I mean, as I said, the work on the hybrid model first, but the model is around getting to that piece.

John, thanks for the presentation. It's Matt Ryan from Barrenjoey. I just wanted to ask about investment. You mentioned this new train line from Melbourne to Sydney little bit in early. I think Paul had a slide talking about a 10% sort of return hurdle that you guys are trying to get to long term. Can you just talk through the process of getting the investment and what sort of things that you, I guess, have to prove to get that investment? And then just as a follow-on to that, obviously, very strong balance sheet the Qube's got at the moment. Can you just talk about the opportunities that are sort of out there and sort of how you're feeling about investing more broadly?

Yes, sure. So I think you said Melbourne and Sydney line. It wasn't Melbourne, Paul was still [indiscernible] Melbourne Sydney line such there, but not sure by that. But the business case that we put up to our board is obviously that we got to get through the hurdles of our board. And there was a business case system for those services. So that passed the hurdles. So that's the answer to question 1. So we're pretty confident about that, and we wouldn't be able to get that sort of investment from our Board unless we pass those hurdles. So what was the second part of your question, sorry say it again?

So to tell you sort investment more broadly. Obviously, a lot of cash, how are you feeling about...

Very positive about any sort of containerized investments at all, we just got to find the right ones. I think we're working through a few at the moment. And I think some people are doing it tough, some people are doing it really well on the back of COVID, it is really a mixture. Some of them have been able to ride the COVID wave and ride the inflation quite well and come out the other end quite well. We're one of the those organizations, some of my competitors are as well. So as the opportunities turn up -- they always come across the desk. So we're pretty keen on making investments, and we now do the balance sheet at the moment. So we'll make the right ones, right? Because we're not going to -- we -- I mean, and one of the reasons in COVID where we didn't make a lot is because we've got out of the sites and see of businesses and feel the fabric of the business, and work through the culture of the business to make sure we are comfortable with it as well. So yes, well, I think we'll be fairly active.

John, I'll ask you one to have had from online. Paul -- so I might just ask a quick one, the question is how much visibility do you have on logistics operations relating to containerized volumes? How confident maintaining median growth if we have a recession and what happened to volumes transporting those actively last time with an economic slowdown?

Okay. So I mean if it's just where our assets are. I think from a port containerized strategically, we're quite well placed. So we'll probably be in the last year by recession in those businesses, I think we located nicely. So I have no concern about that. Everyone is telling me how bad things are slowing down, and we've never seen it better. So I don't see an issue at that at the moment, I think we're well placed, we've got great cost controls, we can downsize if we have to, but I don't know, there is no record in that thought process at all. So warehousing well -- at the moment we're full, 100% full in our 150,000 square meters coming on board, which isn't really a lot in the scheme of things, and we're pretty comfortable we filled that pretty quickly, so it's not make or break, really did not want to get that bigger not really. Again, we'll watch that carefully, we do a lot of work. That's a good guide for us so.

And the other point I might add today's economic downturn. We had this new recession. Our track record has given a strong balance sheet and our diversification is it does create opportunities. So one, from a customer perspective, when times are tough, when one logistics provider is there, we will continue to be value-added services and it does create opportunities to make acquisitions that would otherwise wouldn't be there because it's a private individual who just wants to get out because times are tough or potentially on more favorable terms if there is a full seller. So as John said, we expect our business will be [indiscernible] if there is a downturn. It may create opportunities to accelerate some of the growth opportunities and emerge stronger.

Anthony Moulder from Jefferies. Let's talk back on the Intermodal, can you add Intermodal containers to back of the BlueScope steel trains initially before [indiscernible] Intermodal service?

Yes, we actually have a contract to do that anyway, that's a part of our business plan. Anyway, that's going to happen anyway at some stage with our BlueScope at the moment. One of the reason we're going to do that regionally is we got too much steel. So basically, we agreed to this [indiscernible] steel, we have the model to do that. It's a bit more complicated than we thought it was. And really, it will only be small, there'll only be 300 or 400 meters on the back of each train. So we don't get the scale. But [indiscernible] but it will still happen anyway. We build one with them. But as a whole, we think we're starting -- as I said, we're starting interim service anyway now. We already run a train between states now. The learnings we had by running between Brisbane, Sydney and Melbourne has given us that confidence to go into the next step and run a dedicated service.

Can you go into South or are you limited to running services only in North?

We're running out of North. When it comes to it, we running out of the North and at the moment with North on and we've got inquiries from other railroad players, so these are the hot flavor these terminals, right. I didn't talk about these terminals, but fees are well placed with all these terminals, mining right all across the trade if they want to use them.

You mentioned Fisherman's Island, is it a plan to take rail into Fisherman's Island by the state government?

Yes, that's in the Fisherman's Island, it goes in today.

[indiscernible] .

We're going from Sydney to Fisherman's Island.

Into grain, obviously, I know that you aren't doing trailing currently? Is there a plan to move into grain trading as part of the buffer?

Not at the man because they work for a lot of good traders here, lot of good Australian traders who sort of opened up the market for the multinationals, we got some really good customers that we're working with the Australian traders. As long as they continue to -- as long as they use and the infrastructure is full, we don't say the need to buy grain infrastructure. And as long as people are sharing the fruits, they've got a good -- they're making a good return at the moment, so we're getting some share out of that. So that we can't trade, I mean [indiscernible] . So for this season, we don't really have plan. We might do some containers, but as a DCT trade, that's it.

And last question, we see a lot of the shipping lines pushing one on logistics. Obviously, bread and butter has been that import export trade. What do you see your market share gains coming from in import export?

Look, I mean they're pushing into our market, but not in a big way in Australia. I mean it hurts a little bit, but I don't see them really impact us too much. I mean, there's probably not the locations they strive to be in if they want to be in and they've got to sort of go out of it. So it won't make a lot of sense if they don't be with our services. So I mean I can't control what they do -- they made [indiscernible] over the years, but the freight rates has come down a bit, so maybe they will take those in for a bit, I don't know.

So I'm going to move on to the next session now, and I'm happy to do more questions during the breaks or after meeting for any further question. [indiscernible] business unit.

Thanks, John. I'll just give a short intro to the ports and bulk business. And before I hand over to Todd and Michael to go through the business unit itself, I'd just like to explain just the integrated structure of ports and bulk. Mark is a Director of ports and his commercial team sits over the general business, the automotive business, the energy, oil and gas business, the forestry business and our government services business and Todd Emmert is the Director of Bulk and Todd and his commercial team sits over the bulk of mining business and the renewables business. So by design, we only have Qube operation in the ports and bulk space per port. So you see on the slide there, there's build-offs and brand-offs. So depending on what's the most dominant activity if it's more of a bulk pool, there's more of a general stevedoring or Forestry or an automated port, Todd's team, operational team or Michael's team will do early activities in that port. So there's a very much of a mix between the commercial teams of sharing a customer book within each of those ports. So that allows us not to double up on people, equipment, management systems. So it's basically on the 1 Qube integration of work. So just to explain that before I hand over to the team, I just want to explain that both Mark and Todd have lots of responsibilities over the commercial aspects of it, but I'm sure a lot of sales they share their operational teams do the work for each other, and that's why it's a very integrated -- it's very difficult to separate these into 2 divisions. I probably won't go through all these all these slides here now because the guys will take you through the size of the business. So, I will hand over to Michael first to talk about the ports business and the portfolio, the commercial portfolio of the ports business. Michael?

Good morning, and welcome to you all. I'm Michael Sousa, Director of the Ports business unit. I've been with Qube since 2007, and I came across with the original acquisition from P&O, making it now some 25 years in supply chain management. In the port session today, I want to take you through the ports portfolio. Its drivers, its challenges and its opportunities. What I want to demonstrate here is how our 70 port operations drive our supply chain growth. How those opportunities through delivering efficiencies to our customers, across approximately 50 products within this business unit, and I want to take you into a deeper dive of our supply chain construct and leave you with an understanding of 1, our ability to transform and expand supply chains, which delivers a vast range of business growth opportunities; 2, how our focus on innovation, technology, training and people assist us to offer efficiencies to our customers and create new opportunities for Qube. And finally, our ability to sweat assets across business units [indiscernible] . Starting this slide, which you've seen parts of through the first -- the first couple of presentations. This is our -- I guess, our customer service slide. The green boxes in the middle identify the service areas, which I'll actually do a deeper dive through this presentation to demonstrate how we create value and growth for our business. However, to give you an understanding of the diversity of the ports business unit on this slide, I'll cover a few examples of we manage our services. I'll start with fertilizer, which we do approximately 2.5 million tonnes a year [indiscernible] product. We transport the product. We warehouse it in off port facilities and we use our cargo management systems to manage that product. On the other hand, for motor vehicles, again, we conduct [indiscernible] , we transport the product, we store it. We predeliver services and transport to dealer, handling every mode of vehicle brand you see on the Australian streets. A component of this service, which has a premium is quality control -- so as not to damage or scratch the car that you end up buying it from dealer. For large projects like pipelines, again taking the same slide, it's not uncommon for us to charter vessel, to see the vessel, to manage the storage and transport the cargo to the end user. Then something completely different on the other hand, in our governments -- under our governance services target -- we've been able to government services and provide support for the Australian, Singaporean the United States Navy vessels right across the world and we do that on a daily basis. I actually love to spend the next 6 hours talking to you about each every single one on those 5 commodities and go through how each of the supply chains, but our focus today on the growth supply chains that we've developed from the start. To demonstrate you this next half hour how through those assets, Qube network we create value and continuous supply chain growth opportunities. Before I do that, I want to touch on an important factor, which sits behind why do customers choose Qube for their supply chains. When I look at our commodity and product supply chain diversity, this slide picks up all the key factors that are important to our customers and our partners. I want to specifically handle on what differentiates Qube. If I start with strategic assets, our ability to look assets right across our business between divisions, between business units, John's, Todd's, my own, allows us to offer any supply chain, a unique supply chain looking at various asset options. Our safety systems across the supply chain, our safety standards are nonnegotiable. And our customers expect a safe service and with Qube, they are in safe hands. Our people strive for zero harm, which protects our customers' people, our customer, their business, and their brand. Our people are the difference in an efficient supply chain. While you here every day, the companies are losing people, I am proud to say right here that our people don't want to leave Qube, they live and breathe Qube. They are, in fact, the engine that makes our strategies, plans, systems and service levels work, innovation, efficiencies and savings in supply chains come from innovation, challenging the norm in driving improvement is key to our unique service offering. And I'll run you through this presentation and give you some of those examples throughout this business unit. Supply chain management systems, last but not least, our secret ingredient, I know there's a lot you watching online, but please don't write this down, our systems, believe it or not, no competitor -- no competitor at all can offer a complete supply chain visibility like we do. [MDA/>

No competitor. No competitor at all can offer complete supply chain visibility, like we do. We can offer our clients complete visibility on weighted cargoes, at any point, from the moment it hits Australian shores right through to their final destination. Going through to our first case study, Qube Energy. I'd like to take you through the journey of Qube Energy. Qube Energy operates across 16 locations supporting the energy sector. In 2010, we acquired CFS in Melbourne. And in 2012, we saw an opportunity to expand CFS. Today, named as Qube Energy and today reidentified as a growth market, which today services the energy market across Australia, PNG, Singapore and Indonesia. I'll give you a demonstration now of what that Qube Energy supply chain looks like and we'll give you some more information behind that. [Presentation] What started largely as a [ retender ] operation in 2012. Our service offering today supports production and maintenance to over 3,000 onshore wells and key offshore gas fields in Australia. In addition, Qube also supports drilling activities in both onshore and offshore gas operations. We provide services, as you saw on that slide, that range from freight management, supply base operations, parts preservation, water management, freight management, fuel supply, spooling, fabrication, rig stacking and quality and quantity inspections. Together, these services touch $484 million worth of freight, 37 million liters of bulk liquid supplies across 1.8 million kilometers throughout Australia, utilizing 1.1 million working hours. Today, Qube Energy partners with key customers such as Shell, Chevron, ExxonMobil and Santos. It's testament to our ability to identify market regulator as well as identify how our range of assets and services to improve the energy market supply chain. And on top of that, we embedded the Qube supply chain model, which not only added value for our customers that created a growth market for Qube, which has increasing range of opportunities. With the key breadth of assets and facilities and innovation, we have built a complex energy expectation where the energy supplies now come to us. We are embedded and we provide a critical service to this supply chain, putting us in a strong position in this sector. I want to share some examples with you now of how we have transformed the energy market supply chain you have just seen and how it embeds Qube service for the long term. Our customers have an ability to utilize shared facilities all over the Qube banner. This has never ever been done in this sector. We were the first to do it. For the first time ever, this sector has complete visibility of their supply chain through the Qube connect system, which literally connects their supply chain pieces together to drive improvements, efficiencies and savings. We have built the longest pipes field facility in the world in Indonesia, which has handled 22 kilometers of underwater gas pipeline with the largest diameter of 18-inch pipe, ever spent in oil. Excitingly, we've had new projects scheduled for the construction of an additional 87 kilometers of underwater gas pipeline spool coming up. As you can see, Qube is the key supplier in what is a crucial global energy sector. Looking at, again, a different supply chain, having touched in the Qube Energy one again, we started from scratch we built that up, looking at not a key supply chain which we built. Qube product supply chain now handles an excess of 20 million tonnes per annum of plantation timber across Australia and New Zealand in export logs, export woodchip and timber into the domestic market. Again, similar to the energy supply chain, we foresaw a future critical supply chain and acquired ISO in 2016. [Presentation]

It's important to note that our services, as you can see on plantation forests. In this example, again, what I will show you we started through an acquisition in 2016 in New Zealand having identified an opportunity in the market. That business was providing stable revenue across 6 ports today, and today, after Qube acquired, Qube operates 12 ports, 33 log marshaling operations, 9 woodchip operations and 12 domestic harvesting operations. This growth has come from combining Qube breadth of assets, facilities, systems, innovation and experience. As a result, we are now a key service provider across this entire forestry supply chain. Not only have we managed to grow our footprint and market share. Qube have, in fact, led the way to improve safety and productivity through our ability to innovate, and introduce technology. Since entering the forestry market Qube have transformed market through the delivery of the world's first truck body log counting machine, which can scan a truck of logs and count and measure them to complete accuracy. The first log export mobile harbor crane grabs in the world. Automated ship log loading scanners and live log tracking system and statistics. In both examples today, you can see that we've tried to demonstrate our ability to identify and enter a supply chain, adopt our range of services and transform the supply chain with innovation and technology, using our unique systems. We'll specifically identify these examples because those were commodities that we weren't other than stated early when we go back to that original supply chain. And we've been able to come and take the suite of services that Paul touched on earlier in his slides, and we've able to adopt all the all Qube systems or our technology, our experience, our ability to tap into each other's assets. And on the back of that, we've built now what is 2 key supply chains for Qube, Energy and Forestry, and both of those today we dominate in both of those aspects. Finally, taking a look at the outlook across our commodity and product mix growth in the port business unit. This will come in the form of growth in volume, expanded services, increased market share, new services, new supply chains and in contract rate improvements. On the export side, generally, there is a healthy pipeline growth across the commodities with strong demand, client growth and rate improvements. On the import section, we are seeing medium growth with consistent volume pointing out specifically motor vehicles and machinery due to our services across the supply chain. Motor vehicle volume, the motor vehicle backlog will ensure solid volume in this sector. Fertilizer import volumes are expected to be strong and our services across the transport, storage and stevedoring will benefit from this. On the energy space, across the sector of our business, we are seeing high growth across all facets of services and expected growth into new areas like rig decommissioning, continued pipes for fabrication and decarbonization at our BOMC facility. On the case study showed before, we have embedded ourselves to capture this growth. We have largely displaced our competitors and created ongoing growth in various parts of this sector, like supply base operations, logistics, freight management, fuel supply, spool, which I've touched on, fabrication, rig stacking and decommission. Finally, in Forestry. We see high domestic growth through increased supply chain operations, woodchip export volumes are also quite healthy. And the opportunity for additional woodchip operations is high. We see medium growth in the export space, noting China is a key market where our customers are increasingly leading volume towards tended markets like India. However, I point out that the key growth driver in the export forestry space will come from the fact that we have negotiated with all the forestry exporters a significant tariff increase. Finally, and key to our growth, the other key factors that allow our supply chain services to grow is our ability. One, to flex our labor resources up or down due to our unique conditions in our employee agreements where we can move people across sites and change labor force composition to manage peaks and troughs with our penalty. Two, our ability to shift assets across the various supply chains to ramp up expanding supply chains and scale down assets for supply chains that may have lower volumes. Finally, we have varied rates to allow for cost changes or where volume drop offs have occurred to cover higher fixed costs. So today, in this segment, I hope having taken you behind the scenes of 2 key supply chains in the port business unit demonstrates the scope and breadth of our supply chains, our product diversity. The key factors that drive our business as well as the significant growth opportunities that lie ahead for this business unit. I haven't touched on acquisition and CapEx much in this section. But what I can say is that we have a pipeline of acquisitions we are evaluating across the different service options that I touched on earlier in this business unit particularly energy, but they will only occur if they meant to keep investment criteria. And generally, other capital expenditure will come on the back of new contracts and new service offerings. Thank you for your time today. And at this point, I will take any questions.

[Operator Instructions]

Andre here from UBS. It strikes me that the Qube ports business has a lot of stuff on the land side. You called out growth in wind farms and containers. Similarly, the logistics business has things that probably over the last like terminals and wind farm activities as well. Our lines sometimes a bit blurry about what -- once you go to customers who you should be responsible for what? Or what are the -- what criteria do you apply for how you house these operations and how you sort of come to market with the offering?

It's not uncommon when you tender for supply chain. It will incorporate all 3 parts of the business. And a lot of them come down to what assets, within each business unit and the expertise. But for a good example is fertilizer. We do fertilizer right across the country. Some of them will come through the ports that I see where some will come through [indiscernible] larger volumes that business unit will head up that timber and that's why, as Paul touched on, it's difficult to break up this division because there is a lot of that but for customers, there's no confusion per se for them. Most of our customers have told us -- if I look at the car business [indiscernible] probably 20 years on average. A lot of our bulk customers 10 to 15 years, so they know the market. And even if we take these 2 opportunities, there are all opportunities they fell within this business unit that was easy for that customer to understand. But I think the people need to touch on is, I started with the first part of -- with port. Often we see that a new supply chain creates starts from the [ pool ]. We see a that we're not touching. We see that as an opportunity, and we'll build that. That's where the energy piece started. That's where forestry started, and that's what this was trying to demonstrate. So we'll start with stevedoring and we'll now handle the whole supply chain.

And the only thing to add to that is particularly [indiscernible] so much in 1Q. So we have regular management meetings, particularly focusing on investment committee. So if there's any capital involved, there's a robust discussion with the business unit managers, Paul Digney, Mark, myself, Sam and others. And so through that, there's a logical conclusion around should we do something and then how do we do it. And there's obviously a lot of informal engagement as well.

It's Paul Butler from Credit Suisse. One thing I find really interesting is your statement about Qube having the ability to identify, enter supply chains and to transform those with innovation and technology. And so you've talked a lot about this getting into forestry logistics. But I'm just wondering if you could sort of quantify what the additional growth and value you've been able to achieve when you've gone into forestry. So you're saying the first starting point was doing the stevedoring. How much additional growth have you seen by integrating that service compared to where you started with the stevedoring? And are you capturing more of the value in the supply chain because you've offered the integrated service?

That's a great. Let's start with John's analogy. John mentioned that every target touches a container, those revenue. And that's not different to us. If you look at the forestry we started with stevedoring. And again, we started with stevedoring because we see the commodity, we touch it, we see it. We look at whether there is value. We look at whether our table of services and assets hits that commodity. If we look at forestry, we started with stevedoring, we might do marshaling, we might do debarking with, [indiscernible] we harvest it, we chip it. So we now touch a log whichever way it goes. We touch it to go to export market. We touch the forestry place the log that goes into to chip to make recycled paper, et cetera, et cetera. And we touch the log in more recent times in the domestic market. We saw that as an opportunity. We had assets that were through COVID not being utilized to full capacity. We have relieved those assets and start touching the logs that are going into the domestic market that are making fence posts or items like that you're seeing at Bunnings. So those opportunities continue to occur because we've got the assets, we've got the systems and we've got that vast range of services that you see on those trials. So the more we can touch it as John said, the more revenue opportunities there are.

Jake Cakarnis from Jarden. Just a question on how you're seeing motor vehicles at the moment, especially through the first quarter. Are you seeing some of that catch-up of the backlog that you mentioned occurring at this stage? And can you give us a relativity kind of last 2 years, obviously, complications through the entire supply chain. Can you give us a sense of where we're at now and how we're transitioning through that backlog?

Yes. Look, there is a backlog, and I thought I mentioned in my presentation, our backlog now sits at around [indiscernible]. Now that's good for us. What I can say is the best thing about complexity of the supply chain is every time more complex it is [indiscernible] There certainly shortage of time of [indiscernible] ships and it's a combination of all of that.

Anthony Moulder from Jefferies. A question about contracts. So one of the things in the past has been the earlier-than-expected end of contracts. Can you talk to the contract profile that you haven't pushed out this is the list of contracts, but how those contracts have trended post the extension of contracts and your ability to resign the contracts have come up.

This is a good time for contracts to go out to timber because they're not going for timber. We were finding right across I think we've got the common position customers and opportunity to put in contracts at timber, they want to renew contracts because they're concerned about moving -- shifting from suppliers, losing access to the sort of flexibilities we have in labor where we can move labor anywhere across the country. So if we have shortage of labor because we've got a [indiscernible], we can move people from [indiscernible] from Brisbane anyway. So we have the flexibility to do that and customers know that. We have -- they don't want to risk, especially in the environment where we've got high cost, move and make the decision than just [indiscernible] cost in the supply chain. Yes, look at our average contract news. They're just somewhere between 5 to 10 years so for Chevron contract, we're seeing that probably now 6 months ago and now that's a 10-year contract.

Charlie Donald from Macquarie. You've called out forestry volumes being depressed recently and the particular weakness coming from China. How do you see that environment changing and how important is China overall for this business?

Thanks, Charlie. That's a great question. Look, last year, we -- there's no doubt, I mean, everyone [indiscernible] the papers. Certainly, the Chinese market was down. It was down because of COVID closures in China. That is impacting the manufacturing plants, et cetera. Obviously, you've read there's been a decline in the real estate market. You've read all of those things. Our numbers were certainly slightly impacted by that, obviously, because we've got a high investment in capital in that part and obviously that lower volume impacted that. This year, if I'm looking at this year, I would say -- our focus is being on cost management, we, along the business to work [indiscernible], I guess, from a forestry perspective. We've pulled our cost, as I said before, we've increased rates at the moment say substantially from the 1st of October. So you haven't seen that in our first quarter numbers, but certainly that will start to keep ticking from me. And I would say to you, the market from now what we were seeing the market certainly stabilized -- it certainly stayed stable. The volumes coming across the port from forestry perspective are there. Don't forget, China real estate market and that market is an RMB 8 trillion market. So it's a big market. The demand will always exist and there will always be a requirement for New Zealand timbers. You add on to that a couple of things, the European [indiscernible] market, our forestry, they historically provided logs into China. That market is coming off, that's providing the whole market. We are seeing China use more softwood logs, which is the [indiscernible] logs for things that haven't used such as furniture they've typically used other form of logs, but they're starting to see -- we're starting to see them move more of those logs into some of those different areas. So that is only good for the New Zealand logs. So we are also seeing the export is looking at different markets and these was one of those [indiscernible] that we've moved into that domestic space here in Australia for forestry, which is probably worth around 2 million tonne per annum for us. So look it certainly, [indiscernible] sales. If I give my opinion, I can only say first [indiscernible] was last year.

Scott Ryall from Rimor again. I just wanted to follow up on a couple of comments about. And I guess one of the laggards in the key result in fiscal '22 was the overall ports and bulk division, where price and delays of price increases and productivity was cited as to the key issues. And given we are just talking but some of those things, I was wondering if you could comment, I guess, firstly, on -- is it the productivity and the recontracting environment that will give you the confidence that the pricing will, as a result, come through and reverse some of those impacts in the years coming forward? And secondly, if productivity and the ability, I guess, to work flexibly with your employees is a competitive advantage at the moment. If all the reports are true, we've got some pretty interesting industrial relations legislation coming in today as we speak. I don't know whether it will come in or not. But does that put that competitive advantage at risk in your mind? Maybe it's a question for Paul rather on as a whole of key thing because you guys have had some pretty good [indiscernible] of course, over the last 15 to 20 years. But I was wondering if you could just talk to the Board and Industrial Relations landscape as part of that competitive advantage, please?

Sure. Thanks for the question, Scott. Two parts, obviously, there was rates -- I think sort of rates and margin compose we've gotten there. I would say to in terms of rates and margin conversion. Again, in this business unit, you've got parts like the [indiscernible] piece which is very profitable, high ROC, but lower margins. So we charge high volume, which means you've got bits and piece. Like things like we sell fuel to the oil and gas companies, and we put a slight margin on that. That will throw out some of those margins. And then you've got, for example, the forestry piece, which is high margin. So you got that SKUs, I guess, from a margin perspective. In terms of rates, what we see is where we going to customers from out of cycle, out of contract cycle. So within the contract asking for rate increases, they are coming to the party. So we are getting. We're really covering fuel increases. We're covering costs to where we need to increase and [indiscernible] on the forestry piece. We've had a significant increase in those rates across every single exporter. So that will improve that. In terms of productivity and IR. Well, I will say to you the difference in that space is our experience. We've been doing this for 20, 25 years, whatever it is, we don't mind the buying by the way but what we do know matter [indiscernible] is niche, the expectations of both the viewers and employees. The difference with us we know how to engage with our employees. If I look at the stevedoring sector, which everybody talks about, has been higher industrial. The beauty of our business is better than only 40% of our employees, our members of the union. So we don't see it as what you see this hyped up from a joint stevedoring perspective, but we don't generally see that in this business unit. So our ability to manage our own is a big factor in terms of productivity, our managers have been with us for 20 years, our port managers. We have a port manager at every site. They will come up from the ground they've been either a fork driver or crane driver. They've been the shift manager, they know how to drive productivity. So generally we've seen productivity increase not go backwards, and I think people are very conscious of the field certainly on investment and technology, a lot of what we were doing that in automation and robotics, which is so good over the forestry space that also drives a lot of that improvement in productivity...

[indiscernible] you can talk to industrial in the later panel session. Just 1 question from online [indiscernible]. Structurally, is a less integrated global supply chain using more onshoring of manufacturing and [indiscernible] true to the business.

Yes, I'd say it's mutual. And again, using the forestry example, because of our supply chain, because of its diversity, because of our assets, our facilities, our equipment, we rather shift our service accordingly. And again, using the forestry piece we certainly had saw an opportunity we've [indiscernible] production in Australia of forestry products and that actually created a new market for us to operate in. So we've benefited from that space. So I don't think that will change that much.

Great. We'll have a 15-minute break now. For those who are now participants, if you can return at 12:05 where we continue with Paul looking after key bulk and [indiscernible] that would be great. There is coffee and refreshments outside. Thank you. [Break]

Okay. Everyone's here. Thank you for the opportunity today to talk about the Bulk division, in particular the quality and depth of the business that we've built which is really focused on providing logistics services to the Australian resource industry. I'm Todd Emmert, and I've been fortunate enough to have led the Bulk division from its real early inception. And it's been a real, it's been a decade-long journey to build the outlook we've got today. I've also had the opportunity over the last 23 years to work with this management team. And I've worked across a range of the logistics services that we offer. So early days through Patrick's -- it's been a bit of time at Pacific National through the last -- when that was owned by Patrick's to some of the JVs up in North Queensland where John, charging the rail operations. I think the key themes and messages that I'm hoping to impart over the next few slides, our business that's currently operating in all the key locations in Australia, so the right locations, whether that's in the page, whether that's in the Goldfields through regional South Australia, through the Queensland Goldfields and up into the gold. Those newer provinces, we're located across all of those, a good network of depots and infrastructure there. We're a business that has unique infrastructure and equipment. I spoke about the provinces and the depots network, but we certainly have got good port-related infrastructure warehouses adjacent to most of the ports that we're operating in. That's consistently used innovation as a key differentiator for the services that we offer and a business that's built a quality bond in the Australian resource sector. So over the last 10 years, when I first started, it was really difficult to get on a tender list for mining company. Today, we really saw an every tender that comes to market. We all know we've got a very good brand in the market. So today, we've got a portfolio of clients across targeted communities, and I'll talk about a few of those communities and we've got deeply embedded long-term relationships. Our customer relationships over the last 10 years have been very strong. I can't recall one customer that we've lost over that period of time. The real success and differentiated Qube Bulk is our ability in our own right to provide an unrivaled suite of services under one roof. So this slide, which you've seen both German and market product there depicts all of the services that we offer. And it doesn't really matter, whether it's road or rail, whether it's bulk ship rating or rail bulk ship rating, whether it's through Qube's owned facilities or client-owned facilities, whether it's in the mine site on the road or at the port, we are really uniquely positioned to offer all of those services in our own right and under the one roof. But I should say clients often choose us for a suite of services, and that tends to remove friction ports. And I think the other question was about value there. When we remove friction ports across the supply chain, it does release significant value to both our clients and us are able to share it. But conversely, through our suite of services or an integrated package, some clients not only choose 1 or 2 elements that are up there. And when they do that for the Qube Bulk division, that provides us with a very strong opportunity over time to deliver additional services to those clients, so to build out our revenues to build out our margins. I think the whole purpose here to introduced key products on bulk 135 million tonnes. But remember that, I think, key bulk touching around 115 million tonnes per annum. But just to give you a feel for the split between those that choose a fully integrated package versus a 1 element package, about 55% of the volume is a fully integrated package. And that implies that there's 35% of volume that we're currently handling where we have opportunities right in front of us with existing clients to offer additional services and build out our revenues. And today, I'm going to talk through a couple of exciting mineral supply chains. Before I do that, I'll just touch on this slide here, which is really about our One Qube approach. And I think Paul Lewis might have called out the One Qube approach. And these really are a common set of features and values that set us apart in the industry. And for the Qube Bulk division, at their marketing to our clients, I'll just call out a couple that make a real difference in the market today. I know what they are, our environmental focus, our financial capability and our position within the community and the people that we've got. In terms of the environmental focus, our copper, lithium and nickel clients have a really mature approach to the energy transition that's underway. We've seen that, we've seen the IGA's of the world, the BHP Nickel is and what they've been doing. And we're in constant conversation with them around our plans and our road maps for change. We see that those road maps enable us to strengthen our partnerships with these key clients as we work hard to deliver lower carbon footprint across their supply chains. But more importantly, we also appreciate that the energy transition will increase the demand, the overall demand for those commodities that you'll find we're well entrenched in today. So the demand for copper, nickel, lithium and others. And will also open up new markets for us. So I think Paul presented a wind farm project. So the renewables energy, the wind farm logistics, it's in Bulk division. And we think there's going to be significant opportunity in the wind and solar markets and that will become a larger part of the Qube Bulk business. And again, we're uniquely positioned across that wind farm market to continue to grow. So we really believe -- we firmly believe that a key feature up there around environment focus provides us with the loan value with our clients. And it is really valued as we delivering, clients are prepared to pay for lower carbon, lower environmental impact supply chains. In terms of financial capability, there is a continued demand from the clients that I service which are typically mid-tier miners to select a supply chain partner, who can actually invest in their supply chains. Our balance sheet, certainly allows us to be selective in building for current and future clients, key parts of the logistics infrastructure, that could typically be a bulk storage facility. We've done this very successfully over the years. Right at the start, I think Paul mentioned Utah Port. We got the stockyard at Utah Port designed that for 6.5 million tonnes. I think what you're looking at, is of course, of 20 million tonnes per annum. And it really does go to the DNA piece again about driving volume through a fixed piece of infrastructure, and driving it harder than what anyone would ever thought possible. And we also -- in recent times built a significant footprint of lithium storage or spodumene storage, I should say storage facilities in Esperance, in Bunbury and in Pilbara. And even recently, we built a whole way of BHP so they could get an early start at the Yakabindie nickel mine up at Mt Keith. And being able to make these investments allows us to work closely with our clients through start-up and develop strong relationships that typically endure as our clients grow and prosper. And lastly, I'll call out the community or our people on this slide. And that's really important given we've just finished 2 years of COVID. A big part of our business is Western Australian-based and the Board has only nearly a dropped in, I think, May this year, the March this year. So our 2,200 direct employees they are typically moving in remote and regional areas. The Qube Bulk business preferences local employment over FIFO. And as I mentioned, that's still is in really good stead over the COVID years. It should be noted just prior COVID, we had 95% of our workforce who is working with WA, actually living in WA. The others were significantly of FIFO, and then the borders were closed that prevented them from further growth and actually impacted their operations. But over that period, we were able to actual grow and mobilize new jobs and we saw our business grow over those last few years despite the fact that there's COVID impacts in Western Australia. So in addition to environment, finance and community, I think I'll just touch on another couple of points there. Safety in Qube Bulk is available in fleet monetary center, and that's really valued by our clients when they're selecting a partner to let them know that whatever we're doing on road is done safely. Our equipment fleet, we've got a well invested equipment fleet, typically Tier 4 or 5 prime movers. We're very early adopter of hydrostatic and hybrid bulk materials handling, followers, and we've got a good capacity there to continue to push more volume through our equipment base that's currently employed in our innovation approach. When you hit a Qube Bulk closely, you don't see a single supply chain that's not offering some form of innovation. So we don't just do standard road haulage, we don't just restarted operations. What you'll see is performance-based standards in all of our road haulage equipment. You'll see high-density stacking warehouses. So we have 25 hectares of warehouses or probably equivalent to 3x that of other people's warehouses because of the way we've designed them. And you'll see us using things like the Rotabox at the ship loading and to get our customers early access to market, and that's a proprietary piece of equipment that Qube designed in the early days. Okay. So hopefully, I've given you a bit of a flavor of the business, which is diversified across commodity, client and region, is well invested in infrastructure and mobile equipment. It provides -- typically it provides integrated services under one roof with safety, ESG, local content being hallmarks. I'll now turn to a couple of case studies, I think just to give you a real flavor of what we do. And I'd like to talk about our lithium story or our spodumene story and how we worked very hard to establish services in this emerging market. This story here, it covers all ports across Western Australia from Esperance to Bunbury where we handle Talison, and we have for a long time to Perth where we're now working with Albemarle and Tianqi as they ramp up their lithium hydroxide plants and up to Hedland, where we do a couple of minerals and have been involved in the region recently. Hopefully, it's been one, we will be starting up in Darwin in the new year for core lithium. As I bring that volume to market. So we've invested very heavily in the lithium supply chains across Australia, building out storage facilities in Esperance, Bunbury and Hedland, also designing high-capacity triple rail trains where Quattro trains can't be used and in some locations where bulk ship loaders loading is not available because there's not a bulk ship loader. We've deployed the Rotabox technology. And that's allowed our clients to get early access to market in a market where they wouldn't be because the investment, given the volumes in providing a ship loader is not there. It's fair to say that today, we're working across all the hard rock lithium supply chains in Australia. That didn't come about by chance. We made clear strategic decisions on this around 7 years ago and have been working with all the lithium hard rock miners through their PFS', BFS' and inter-production. And although there was a little bit of a false start there a couple of years ago, we did hit a couple of snags, it would be fair to say that there's a very strong outlook in this market segment going forward for Qube Bulk. And I'll just play a little video. Do I do that. No, you do that. [Presentation]

Okay. And to round out -- I'll just move one slide forward. And to round out the whole battery mineral story, which isn't for Qube Bulk just focused on lithium. I've actually got another short video here which I'll just introduce before we play that does show an integrated supply chain that we've been developing in the Goldfields over the last 24 months. The investment in rail terminals and equipment remains consistent with our focus on the nickel, lithium, copper and rare earth industries markets. Over the last 24 months, we've deployed over 200 people into the Goldfields. That's 200 additional people whilst COVID hard border closures are in place. We've built 3 rail terminals in Kalkuli, Leonora and Kwinana. Some of those rail terminals were built within 3 months of lead time over that period, which just shows you the agility and speed which we can move when needed to. We've deployed a significant locomotive fleet and have procured a good range of lightweight rail wagons that are market-leading in the West and also have designed and delivered special-purpose, dry bulk container fleet. So it just looks like standard containers there, but I can show you there's a whole range of things and innovation in both of those containers that allow us to maximize payloads and minimize costs for our clients. Today, we've established a really strong offering across the Goldfields and remain confident in securing additional volume there with -- across the network of terminals and equipment that we've already put in place. And we think that will drive future growth in margins in our business across what is a largely fixed cost network as we secure new market share and new volumes are brought online. So I'll play that video now, please. [Presentation]

I think the real quality of these videos is actually the people we've got in these videos, and they're all -- I think I'll call that out, they're all real people. They're all really Qube -- trusted on Qube employees right across the business from where that Brooke's giving the intro. And here, she's trying people up in Townsville for the new rail services or -- so I think that's a really important part. So if you're not getting that through the videos, I just wanted to call that out, that we've got some great people in our business. Just moving forward to the outlook, I'll probably try and do it a little bit differently. But like the ports and the logistics business units, growth in our -- in the Bulk business unit will really be driven by 4 key factors. And those are the demand for the commodities in which we're currently handling our organic pipeline, our ability to enhance or improve margins and the investments that we currently have underway in additional infrastructure that will be delivered at the back end of this year. And I'll just try and touch on each of those individually. In terms of the demand for the commodities, there's really 2 baskets of commodities in the Qube Bulk division. There's that's critical minerals, which we spent a lot of time on -- in these case studies. And then there's the base commodities, that's the iron ore, the coal, et cetera. In terms of the critical minerals, we've got a very strong outlook there. We remain well positioned across the nickel and lithium and also mineral sands businesses and we're confident in ongoing growth in there, both with the existing clients and our pipeline within that sector. In terms of the steelmaking coals and iron ores that we handle, we continue to see fairly strong volumes there. In some areas, they may be stronger than what we've seen in the past 12 months, particularly as Queensland's making coal starts to displace lower quality coals and the demand to up through those coal fields are very strong. In terms of iron ore, we've seen the outlooks there. Most of our clients are maintaining their volume outlooks. I think yesterday there were some announcements around one of them. And we don't expect them to be impacted. Their supply chains are materially more robust than they've ever been. The clients that we're handling aren't in the bottom quartile cost curves anymore and they've done a lot of work over the last -- since 2014 to make sure that they're -- that they came with the lower price environment. In terms of the organic growth pipeline, I spoke about we've got a number of clients that were in discussions, most of them in fairly advanced discussions, about expanding this type of services that we supply to them. So that 45% of the volume I'm currently handling where there's opportunities, we will be executing against those. We've also got a number of new projects that we'll be delivering in the second half of this year. In Geraldton, we've got a heavy precious metals in the mineral sands projects that will kick off. Down, in Esperance, we've got another nickel mine that we'll be taking over from another supplier. Up, in Darwin, we'll be kicking off coal lithium. I haven't spoken heavily about the wind farm logistics, but we've just completed the Dulacca Wind Farm. We're about to start the MacIntyre Wind Farm, which is the largest wind farm in the Southern Hemisphere. And we've got 2 projects that sit right behind that, that will see us with of 4 of 5 worth of continuous business through Fisherman Island doing wind farm logistics. In terms of margins and ability to maintain and enhance the margins, it's fair to say that COVID and the fuel spike -- the recent fuel spike has been challenging, but I think we've managed those very well. Last year was actually a very solid year for the Qube Bulk business. COVID certainly challenged us through delays in equipment and it's fair to say that a large parcel of equipment that we're expecting sort of 18 months prior arrived in May this year, and it's now deployed. And we've seen immediate financial benefits of that, particularly in the task that we've deployed that in, so getting the productivity that we expected. We've also been in conversations, similar to Michael and John, with clients where inflation has moved slightly faster than anticipated. And I must say, in all instances, we've been successful in agreeing fair outcomes that will deliver appropriate margins going forward across the Bulk business. And lastly, a couple of investments. We've got a couple of bulk storage facilities that are underway right now. That'll be delivered at the end of this financial year. And they will certainly deliver incremental earnings. And they're underpinned by long-term client commitments. So that's in terms of the outlook. In terms of acquisitions, I think it's a consistent message. There is a big pipeline of acquisitions that's sitting in front of us. We'll be very targeted on those acquisitions and the targets will be around making sure we can enhance our services to the critical minerals industry, but also being complementary to existing operational footprint and also our client portfolio. So I'll just close down. I'll wrap that up. So hopefully, you can see the Qube Bulk business really does have an unrivaled capability to deliver in our own right. And we've got some of the best people in the industry working for us. We're positioned very well across the critical minerals industries, coppers, the nickels, the lithiums, the leads, the zincs. We've got a strong opportunity to continue to grow this business through expanding our services to existing clients, through securing the work that is clearly identified in our pipeline, through ongoing margin improvement and by understanding and delivering against the opportunities that the energy transition presents. So that's me done. I'm happy to take your questions there.

Thanks, Todd. I might start with an online question. The question is of the 45% of customers who aren't taking up all of our services, what's the reason they haven't taken up more? And what are the sort of barriers or requirements in order to grow that number?

Yes. Sometimes it's a capability thing. We'll start a service of what we can do and then we'll work into it. Other times, they've made a selection of disintegrating their supply chain and they quickly work out that friction points add costs. So the sum of the lower costs don't equal what the actual cost is. And when you actually start having those conversations and highlight that people can see there is greater value in integrating supply chains in having one service provider, I think I said one throat to choke, particularly when you want to get your product to market when the market is buoyant.

Owen Birrell from RBC. Just a quick question around the acquisition pipeline. Just wondering if you can get us -- give us a sense of the degree of competition for assets in the market at the moment. There's a number of other sort of listed players out there that are chasing bulk assets for their own reasons. Just wondering how you're seeing that space? And how do you stop overpaying for assets in that market?

Yes, that's a very good question. Clearly, you're talking about Aurizon working into that market.

I am.

Yes, so that's fine. A lot of the acquisitions we do due diligence on are not a competitive process. A lot of them we identify over -- and over a number of months or years we're working with the owners of those about what the strategic value of transitioning the ownership to us is. So a lot of them come about by that. Those that we are in a competitive process, you won't see us overpay. We've walked away from a couple recently. And they really do need to fit feed a set of parameters that we've got internally agreed to -- in terms of financial hurdles, in terms of strategic benefit, in terms of fit with what we're doing in our business. So yes, there may be some competition, but I'm not seeing -- we're not coming up against the Aurizon acquisition we're looking at.

And just on that, can you roll out any interest in some certain Hunter Valley coal assets.

Yes, I can relate that.

Excellent. Thanks.