Peer review: Mike Jones FRSA FCILT
Former Railfreight National Business Manager
The overriding success of the freight operating companies has been their drive to improve productivity, in noticeable contrast to the passenger operators. This is a result of investment in efficient traction and rolling stock, terminal facilities, and flexibility in the way staff are employed. The subsequent lower costs have allowed greater competitiveness for flows that would otherwise not have been attracted to rail.
The role of the Government’s Mode Shift Revenue Support (MSRS) grant regime should also be acknowledged. This takes the form of a direct subsidy for the movement of bulk tonnage and containers where the price of road movement is below that of rail. The scheme is justified on the basis of societal benefits, in removing heavy goods vehicle traffic from the roads, and has an annual budget of £18.6 million.
There was a degree of good fortune for the freight operators, in the switch from locally produced deep-mined coal to imported supplies, which has created long hauls from ports such as Hunterston, to power stations. The structure of the privatised industry enabled substantial investment to take place to meet these needs, with the availability of equipment financed by leasing companies.
The number of licensed operators also produces a competitive market that drives innovation in response to tenders.
It is an outstanding statistic that despite continuing growth, the number of train movements has been substantially reduced. This does mask a product weakness, however - apart from the containerised market, which might be seen as a retail business, the increased size of trainloads means flows that may be substantial in road haulage terms cannot be conveyed competitively by rail.
A solution has been tried in the form of a freight multiple unit. And although successful operational trials were carried out, the freight operators have shown little interest in a product that would allow smaller trainloads to be competitive in terms of both the market and winning paths on a congested network.
Maggie Simpson is right to draw attention to the failure of the seven-day railway concept that Network Rail evolved to address the limitation of times when freight trains can be run. In reality, the continuing growth of the passenger railway and demands for greater reliability means it is unlikely that the need for engineering possessions outside the hours of the timetable will diminish.
The solution has to be greater investment in diversionary routes that can be used by freight trains, such as the Joint Line between Peterborough and Doncaster and the type of re-routing possible when the East-West Oxford-Bedford route is commissioned.
There is only passing reference to the potential for international traffic using the Channel Tunnel. Various factors have been put forward to explain the lack of business, and although the tariff structure has recently been made more competitive, I suspect the greatest constraint is the lack of commercial expertise in meeting the requirements of a market dominated by road haulage.
The outstanding opportunity for continuing productivity is the use of electric traction, as the national programme for overhead wiring will give greater network reach.
At present there is no sign that the freight operators are contemplating any change from their current ‘diesel under the wires’ strategy. However, the order for ten new electric locomotives by Direct Rail Services may be the start of a change in this trend.
