Network Rail, which is responsible for the rail tracks, has just released a freight strategy document that recommends increasing capacity for freight as well as work to bridges and tunnels that would allow larger containers to use parts of the network, while the Office of Rail Regulation wants to cut charges for using the rail network. And, with the Channel Tunnel Rail Link opening in the autumn of 2007 there should be new opportunities for fast freight services to use the route.
However, Cinders is not a princess yet and there are still significant problems ahead. Charges for rail freight operators to use the Channel Tunnel have gone up dramatically, driving many of them off the route.
Last month Network Rail set out its Freight Route Utilisation Strategy which seeks to accommodated the expected growth rail freight up to 2015. It anticipates a growth of just under 30 per cent in freight tonnes lifted which equates to up to 240 additional trains a day on week days compared to the base year of 2004/05.
The strategy sets out the recommended short and medium-term schemes which are likely to be funded or part funded by the Network Rail Discretionary Fund or the Out Performance Fund.
While growth is predicted in the volumes of most commodities carried, the greatest overall level of growth is expected in deep sea intermodal traffic. The greatest levels of change in demand on a route by route basis are driven by alterations in the sourcing of coal for the electricity industry.
One of the issues that holds back rail freight in the UK is the physical clearance at tunnels and bridges – known as the loading gauge. In the UK this is smaller than on the continent and means that trains cannot carry some of the larger containers that are used elsewhere.
Network Rail recommends development of priority core and diversionary/capacity generating routes to high cube “W10” gauge for 9ft 6in containers. This would enable it to carry a significant volume of traffic that would otherwise be carried by road.
It says there is a “positive business case” for the routes from the ports of Southampton and Felixstowe.
It is also in favour of the larger “W12” gauge, including electrification clearance, and European gauge to specific parts of the network, recommending that it should be considered as a starting point when a structure is renewed on the routes identified as priorities within the strategy. This may be achieved by either replacement with higher structures or lowering of the track.
The strategy assumes that the levels of imported coal will continue to grow throughout the period covered by the strategy, replacing some remaining domestic coal supplies. There is a clear business case for developing the east coast ports coal route as well as for enhancements on the Anglo-Scottish coal route which provide benefits to passenger services and enhance the route’s capacity as a diversionary route for both freight and Anglo- Scottish passenger services while providing an alternative coal route.
Inevitably, the West Coast Main Line is a critical element in the network and the strategy document outlines a host of improvements to meet future freight needs.
The key flows driving the strategy for the West Coast Main Line are between Carlisle and Preston, further south between Winsford and Weaver Junction, at Stafford and between Rugby and Wembley.
Generally, the strategy has been welcomed by the industry. Chris MacRae, the Freight Transport Association’s rail freight and global supply chain service manager says: “This strategy represents a positive step for rail freight. Network Rail is pro-actively planning for freight growth across the network, and taking account of forecast developments in trade, provided by FTA and others. This work is vital and we applaud Network Rail for doing it.”
MacRae says the FTA “is particularly pleased that Network Rail is developing a forward strategy for gauge clearance to allow newer, larger intermodal containers to be carried to and from the UK’s international gateway ports. This is important for the sustained competitiveness and reliability of the UK supply chain.
Leading rail freight operation EWS says: “The recently published Network Rail Freight Route Utilisation Strategy forecasts rail freight growth of 30 per cent in seven years. EWS strongly supports this strategy which will enable the rail network to accommodate this predicted growth.
EWS currently operates 8,000 services across the UK and continental Europe. At the start of the year it launched EWS Network to providing dedicated and specialist services for the intermodal and logistics markets. And last month EWS Network introduced two daily services to its terminal at Southampton. The new daily return services are delivering intermodal containers to terminals at Trafford Park in Manchester and Wakefield in West Yorkshire.
“A crucial element of the strategy is the importance of an efficient and effective rail network. This will be achieved by operating longer, heavier, higher and wider freight trains. EWS is already delivering this through double length coal trains up to half a mile long and the strategy enables EWS to continuing packing as much freight as possible into every freight slot in the timetable.
“The expansion and investment plans in the strategy require the right policy framework. However, the risk of higher track access charges, 60 tonne lorries and the escalation of fuel duty all threaten rail freight’s competitiveness. With road haulage producing five times more carbon dioxide and ten times more harmful emissions than rail, it is critical that disconnected public policy does not undermine rail freight’s potential.”
Derrick Potter, chief executive of The Potter Group, points out that since privatisation in 1994 rail freight traffic has grown by 60 per cent and market share from 8.5 per cent to 11.5 per cent. The rail freight industry has stripped out costs, increased efficiency and attracted over £1.5 billion of private investment since 1997.
Potter says there is no doubt that Network Rail’s forecast of 30 per cent growth is achievable but while private investors have shown their commitment, government support has been less consistent, as illustrated by the variety of schemes that have been introduced and modified, including Freight Facilities Grants, Track Access Grants and Company Neutral Revenue Schemes, and which have annually amounted to no more than £20m-£30m.
Potter believes growth will not come from the traditional rail freight goods of coal, steel and metals and aggregates – although coal is still the biggest market for rail – but from road palletised goods. Rail is seen as the carrier of bulky, non-time critical goods over long distances and at odds with modern supply chains where the customer is seeking commercially viable, 24/7, regular, scheduled deliveries but also the flexibility to meet the peaks and troughs of demand. Customer service is key.
In recent years logistics companies have invested in track and trace capabilities providing clients and their customers with accurate and timely information on the status of product movements. Supply chain information flows have become the norm and are expected by customers regardless of the mode of transport. Rail freight operators must adapt road freight ‘best practice’ if they are to compete, Potter argues.
EWS says: “This is about showing customers how rail can be used to improve the efficiency of their supply chain and reduce their costs. Rail competes with road on many difference levels, rather than at a particular point. The competition between the two modes also depends on the weight and quantity of the product being moved. These vary for all customers.
“EWS has launched four new business units that are working to win new customers to rail in specific markets. Reliability and price are the key elements EWS delivers to ensure customers are won to rail. The compelling case to use rail is the increasing cost of road haulage. Congestion, road pricing and awareness of the size of a company’s carbon footprint are key elements that are increasing rail’s share of the freight market.”
Freightliner is responsible for 85 per cent of the rail-fed deep sea container market in the UK and currently offers more than 90 services a day. It also operates more than 110 lorries and has a vested interest in the development of capacity on both road and rail.
In a presentation to the Chartered Institute of Logistics and Transport, Keith Gray, business planning director of Freightliner, pointed to the importance of being able to compete with road haulage on price and reliability.
“Terminals, locomotives and wagons are expensive long term assets and the greater the volume, the lower the unit cost,” he said.
Freightliner reckons the deep sea market is growing at about six per cent a year with only 24 per cent moving by rail. Road is the dominant mode, and consequently the price-setter. Nonetheless, clear opportunities exist.
“Key issues to ensure that these opportunities are taken are: gauge clearance in and around Southampton for 9ft 6in boxes, branch line duelling and enhanced rail facility at Felixstowe, and increased access to the network at weekends. Capacity exists inland: it is at the ports where additional rail capacity is required. Very few proposed rail freight terminals are gauge-cleared, and many are poor situated for access to the deep sea market.”
He quoted the Rail Freight Group’s estimate that “the cost of improving the railway from the port of Southampton to the north west for high cube containers is £30m to £40m. This is less than the cost of widening two miles of the M1.”
Freightliner is looking to Network Rail to provide sufficient secure fast, direct train paths for freight. In fact, Gray points out that network congestion means Freightliner must target full trains to single destinations.
The opportunities for rail freight are clearly improving, but these are not done deals and there are plenty of hurdles ahead. St Albans council recently refused planning permission for a rail freight terminal after a well-organised campaign against it by local residents and other terminal developments could be hit by public opposition.
And there is the attitude of the passenger service operators to take into account going forward. Generally, they have not been helpful to the rail freight industry, tending to see freight as the grubby slow stuff that gets in the way of their nice shiny expresses. The battle to get more freight onto rail is not over yet.