Wednesday 26th Oct 2016 - Logistics Manager

Rising costs could drive freight off rail

Companies that currently use the railways to move goods say they will switch to the roads if rail cannot compete on price.

The warning comes in response to proposals from the Office of Rail Regulation which could see charges to rail freight operators for accessing the network double in some cases.

The ORR is consulting on the proposals before it presents its advice to transport ministers in February.

James Hookham, deputy chief executive of the Freight Transport Association, said: “Increases in charges to freight traffic as outlined in ORR’s proposals would have a devastating impact upon the industry. If it is beyond ORR’s remit to consider factors outside the rail network – although it is supposed to make considerations of affordability – then FTA looks to the Government to honour the commitments made in its statement to Parliament in July 2005 which indicated encouragement for the growth of rail freight.

“Rail freight has a critical role to play in the UK’s economy and a major contribution to make in reducing carbon dioxide emissions in the future. But the margins are slight, and if we start seeing charges of the order being discussed by ORR then it is unsurprising that customers would be discouraged from using rail, or worse still that existing rail customers will move back to the already congested roads.”