In September 2016, the British Government published the new ‘Rail freight strategy, developed in collaboration with infrastructure manager Network Rail, the railway industry and interested customers. The strategy underlines the authorities’ vision on the possible development of traditional rail freight transport and on the possible collaboration between logistics and the rail industry to innovate the sector and help ease road congestion. According to Paul Maynard MP, Rail Minister, ‘rail freight is one of the great success stories of rail privatisation’ that has doubled its market share from 5% to around 12%.
For Great Britain, rail freight transport plays an important economic role contributing to the national economy by GBP 1.6 billion (EUR 1.85 billion) a year. At the same time, it generates GBP 1 billion (EUR 1.1 billion) from the optimisation of productivity, while GBP 600 million (EUR 696,7 million) is the cost of reducing road congestion and emissions.
6 rail freight transport operators are operating on the British network playing an important part in both the transport and the economic sectors.
The latest strategy adopted by the government was in 2009 (Strategic Rail Freight Network: The Longer Term Vision), and since then, the railway freight transport market has been facing various modifications and challenges. Consequently, it was vital to reassess the market and set a new strategy. This strategy completes Scotland’s Railway Freight Transport Strategy, Delivering Goods, published in March 2016, which underlines the importance of freight transport for Scotland’s economy. In defining the strategy, Department for Transport (DfT) also collaborated with Transport Scotland for acknowledging the importance of railway freight transport across Great Britain.
The strategy will not establish the proposals for improving the network, or the details for freight paths that will be necessary in the future. These elements are considered by DfT for a longer time interval as part of the network long-term planning which will be considered a priority as of 2019. In turn, the strategy will reflect the government’s future policies and measures on rail transport development.
Apart from its contribution to the development of the rail system and limitation of road congestion, the strategy will also help achieve the emission cut objective, as each tonne of goods shipped by rail reduces carbon emissions by 76% compared to transport by road and each train eliminates 43 to 76 trucks, reflecting rail transport potential in reducing emissions across the UK and for safety improvement.
At the moment, domestic transport emissions amount to around a quarter of GHG, the road sector contributing significantly to the increase: for example, in 2014 heavy freight vehicles were responsible for 17% of total transport emissions in the UK. Shifting traffic to railways has and will have a conclusive role in meeting the emission cut objectives. Through the Fifth Carbon Budget, the government plans to reduce emissions by 57% until 2032 compared to 1990. Also, by 2050, the authorities plan to reduce emissions by 80% as mentioned in the Climate Change Act.
”Rail freight makes an important contribution to our economic and environmental well-being, with benefits estimated at around GBP 1.6 billion to the national economy every year. It generates around GBP 1 billion from improved productivity, while around GBP 0.6 billion is the value of the reductions in road congestion, carbon emissions and air pollutants”, Paul Maynard, Parliamentary Under Secretary of State for Transport said.
To identify the growth potential of the rail freight industry, DfT asked Arup to elaborate an assessment of the sector on groups of freight and to review the key elements of the constraints that limit growth. Based on Arup’s study and the industry’s commitment, the Rail Freight Strategy identifies four priorities where the actions of the government, industry and other interested parties will contribute to developing the rail freight transport sector.
Innovation and skills
Rail freight transport industry is constantly growing also due to the development of innovative solutions and products that contribute to increasing the efficiency and performance of services. Reliability, flexibility and rapidity are vital characteristics in selecting the transport mode for goods for which services suppliers have to implement new technologies to meet customers’ demands. For example, some solutions for exploiting innovative models include the direct transport of packages between city centres, using the capacity of passenger transport services (outside peak hours) or older rolling stock adapted to carry goods in cities. A case study mentioned in the strategy is the partnership between Colas Rail with Eddie Stobart/Sainsbury’s and TNT Urban Logistics that have undertaken trials utilising converted rolling stock (Motorail NVA wagons) to carry goods from supermarket roll cages and pallets to clothing and garments from central rail-connected warehousing direct to Euston Station. With the help of customers, Colas developed an ‘express service’ pilot to provide greater same-day coverage from central warehouses, faster transit times when compared with road and classical rail freight and direct rail access for freight to city centres.
Since there are innovative practices and business models, there are also opportunities for the industry to focus on developing new technological solutions to optimise the efficiency and to face industry challenges. A case study mentioned in the strategy is Freight Technology Group, in charge with identifying and developing technologies and practices to improve performance. The group, including Network Rail and freight transport operators, has the role of ensuring the implication of the rail freight sector in the Digital Railway vision. Three technological schemes are currently offered.
Network capacity
The increase of freight volumes and number of passengers requires a network with improved capacity to meet traffic needs. Investments using the Strategic Freight Network Fund have already financed new infrastructure projects to support rail freight transport growth. GBP 235 million (EUR 271,3 million) were allocated in the Control Period 5 (by 2019) and DfT considers the need to invest after 2019 in infrastructure projects dedicated to the optimisation of freight transport.
The development of the freight sector within Control Period 5, Network Rail included 6 main schemes: Felixstowe – Nuneaton phase 2, Southampton – West Coast Main Line, Northern ports and trans-Pennine study, Great Western Main Line and West Anglia gauge enhancements, and other potential improvements.
Apart from Network Rail’s role in ensuring an efficient capacity, the government also plays a part in the way in which the network is used to approach passenger franchises.
Track access charging
The future policies and measures on the track access charge will impact on the freight operators’ ability to supply competitive prices and, at the same time, will also be a triggering factor for the sector growth. To that end, the Office of Rail and Road is working with the industry to review the structure of charges in CP6 (from 2019). During the initial consultation of December 2015, ORR announced that it would continue working to better understand the fix costs of the network and that it could develop a package of improvements for variable tariffing.
By the end of CP5 (in 2019), through TUI, the estimated costs of the railway freight industry are GBP 87 million (EUR 100,4 million) a year. The amount is an increase by GBP 15 million (EUR 17.3 million) a year until 2019, compared to the level of charges in CP3 (2009-2014).
Telling the story of rail freight
From the privatisation of the railway sector, in the 1990s, the share of railway freight transport market increased from 5% to 12% and the industry has significantly invested mostly in rolling stock and terminals to attract an increasing number of customers. An important progress of the industry has been achieved over the past two years approaching the opportunities of presenting their benefits. As part of the Rail Freight Strategy, the government established Freight Communications sub-group to identify the methods through which the industry could maximise communication opportunities.
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