NEGOTIATIONS between Wimmera Container Line and Qube Logistics have failed, with no decision being reached.
Qube began operating from Horsham's Mill Street freight terminal in November until it could operate from the new intermodal freight terminal at Dooen.
The two companies had been negotiating access to the Wimmera Intermodal Freight Terminal for more than 12 months.
Wimmera Container Line general manager Allister Boyce confirmed that negotiations had concluded.
"We will be moving on as a business and so will Qube," he said.
Mr Boyce said while he was disappointed that Wimmera Container Line could not reach agreement with Qube, the company had several other dealings underway with potential clients for the rail container services.
"We hope to be making some announcements on these soon," he said.
Qube corporate affairs director Paul White said the company would continue operating at the Mill Street freight terminal.
"We have attempted to come to a sensible commercial agreement with Wimmera Container Line for more than a year," he said.
"However, Wimmera Container Line has refused various offers from us, which has left us with no choice but to stay at Mill Street.
"We do not intend to move any time in the immediate future, but will continue to review our options."
Horsham Rural City Council is disappointed that a commercial agreement could not be reached.
Horsham Mayor David Grimble said it was not the outcome council had hoped for.
"My understanding is that now Qube will have to start withdrawing from the site and have to manage their ongoing freight on road," he said.
"They haven't been able to work through their negotiations to use rail and eventually, when their lease runs out, they will have to leave the site."
Qube leases the Mill Street site from the Australian Rail Track Corporation.
Cr Grimble said council had assurances from the corporation that the lease would expire at the end of October.
"One way or another, Qube will have to come up with alternative arrangements," he said.
He said it would be a very disappointing outcome if the freight had to go on road.
Planning and economic director Tony Bawden said council had maintained close contact with both parties throughout the process.
"In liaison with the Department of Transport, council also offered the brokering of an independent facilitator to assist in the negotiations, however ultimately it was a commercial matter that needed to be dealt with between Wimmera Container Line and Qube."
Horsham North Residents Committee secretary Rae Nelson said she was in the process of putting a petition together to get the Mill Street terminal closed.
"We want confirmation in writing that the site will be closed," she said.
The committee has also made a Facebook group, called 'Decommission Horsham Rail Freight Terminal'.