Peer review: Philippa Edmunds
Freight on Rail Manager, Campaign for Better Transport
Anthony Lambert makes cogent arguments for long-term strategic infrastructure planning and the need for integration across modes in government planning. I would like to discuss these themes further, through a freight lens.
Rail freight can be overlooked, even though the Rail Delivery Group showed that it is worth £1.6 billion per annum to the UK economy. Therefore, I believe that a National Freight Strategy could set a framework and inform the devolution debate.
The Government’s process for planning and funding invest-ment in the railways has allowed the rail freight industry to make the case for key infrastructure enhancements as part of the Strategic Rail Freight Network vision. The £545 million that the Government invested on the Strategic Rail Freight Network in 2009-2014 included key gauge upgrades on the port routes - rail’s market share out of Southampton port increased from 29% to 36% within a year of completion of the gauge upgrade, demonstrating that targeted rail freight upgrades work (Financial analysis: £70.7m project having a Net Present value of £376m).
During the current Control Period (2014-2019), in recognition of the importance of the economic, safety and environmental benefits of rail freight, £254m has been allocated to the Strategic Rail Freight Network for key capacity upgrades.
A series of key projects, including the much-needed capacity enhancements out of the ports of Felixstowe and Southampton, as well as Great Western gauge upgrades, are agreed priorities. However, due to a combination of projects running seriously over budget and a shortage of engineering expertise, there are serious delays. Consequently, some of these crucial works may not be carried out in this timescale, jeopardising the projects as funding is not automatically carried over into the next period.
These upgrades are needed to cater for the existing and forecasted growth. Consumer rail freight has grown by 30% since 2006/07, and is now almost a third of traffic and is forecast at 16% annual growth. Construction traffic grew by 17% in 2013/14 and maintained these high volumes last year, showing its potential to service this expanding sector.
By 2034, this consumer traffic will have quadrupled, providing existing market conditions are maintained and the terminals that are needed are built. More freight capacity is needed, as well as the ability to cater for longer, heavier and faster trains, and so Network Rail is undertaking commodity studies to try to strengthen protection of these strategic rail freight paths.
The strengthening of the case for Strategic Rail Freight Inter-changes in last December’s National Networks National Policy Statement was welcome, as forecasted volumes cannot be realised without more road/rail transfer points. These Strategic Rail Freight Interchanges, funded by the private sector, offer potential for considerable local and regional economic regeneration. The Daventry Strategic Rail Freight Interchange, where Tesco has a terminal, already employs 5,000 people - and this will increase to 9,000 when the latest expansion is completed.
The rail freight industry also needs long-term certainty, so the industry and its customers are pressing for track access charges to be set by the Office of Rail and Road for a ten-year period, rather than the current five-year period.
The new monitoring of Highways England by ORR is important, as there is a lack of integration of government planning and scrutiny across the different modes. The ORR must be able to compare rail and road costs, which is important because rail has to compete with road on price, even though there is not a level playing field.
Government figures show that HGVs receive a £6.5bn in subsidy each year (RailReview Q4-2014). What this means is that HGVs are paying less than a third of the very real costs they actually impose on society in terms of road congestion, collisions, road damage and pollution. It is therefore hard for rail to compete, as it receives ten times less subsidy than HGVs. If rail is to play its full role in the logistics industry, the Government needs to support rail freight accordingly.
This is where the Government missed an opportunity for a fairer lorry charging system, when it introduced the time-based system last year. A comprehensive distance-based lorry road user charging system could have charged HGVs for their actual impact on the network in terms of congestion, track costs and pollution, encouraging more efficient and sustainable use of HGVs as well as charging foreign lorries appropriately.
A growing number of countries have replaced their time-based systems with km-charging systems on motorways, including Germany, Austria, Switzerland, Poland, the Czech Republic, Slovakia and Portugal. This has increased efficiency in road transport through increased load factors and fewer empty trips, and decreased the average distance travelled per tonne. In Germany, four years after the Maut (toll) system was introduced in 2005, empty lorries were reduced by 11% - previously empty running had been at similar levels to the current 28% in the UK.
ORR’s new role could also improve cross-modal planning. A glaring fault in the Highways Agency road-based studies was that they did not take account of any of the parallel rail routes when analysing the corridors from either Southampton or Felixstowe to the West Midlands… even though rail handles almost a third of the freight traffic out of both ports. Without proper corridor analysis, there is a danger that the latest and planned upgrades to the Strategic Rail Freight Network will not be taken into account in Government planning, which could result in a false picture of demand on the strategic road network.
Freight on Rail will be pressing the Government to support key capital investments on the network in the Comprehensive Spending Review, so that rail freight can continue to offer a reliable competitive service that benefits the economy and society.
