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Column - January 2014

Rail Freight Revival

Rail freight volumes have returned to pre-recession levels indicating that the economy is picking up as freight is a bell weather for the economy. In fact, the latest ORR figures for the period April to June show that rail freight traffic grew by 5 per cent compared with the first quarter this year. And when the same quarter figures are compared to the previous year’s quarter, five of the seven defined commodities increased, with consumer traffic levelling out and both construction and oil increasing by over 9%.

These figures reflect the Government’s support for developing the Strategic Freight Network (SFN) and other key routes which have resulted in a more flexible and robust network. A key element of which are the gauge cleared diversionary routes allowing the operators to offer a reliable flexible and efficient service for the expanding consumer market. Upgrades have also allowed longer heavier trains which has resulted in train loads increasing by up to 21% since 2009 and making better use of limited rail capacity. Targeted rail freight upgrades work and translate into more traffic; rail’s market share out of Southampton port increased from 29-36% within a year of completion of the gauge upgrade demonstrating the direct benefits of rail enhancements 1.

Courtesy of DB Schenker Comments from the CEO of HPUK, Clemence Cheung, explain how upgraded links to our port are key to UK economic success. He told the Transport Select Committee hearing on Access to Ports earlier in the year that improved rail capacity was key to Felixstowe port and would improve the competitive position of the port relative to ports such as Rotterdam. So  the opening of the Ipswich Chord, in April 2014, is most welcome and is the next important step in developing a new rail freight corridor from Felixstowe to the West Midlands.  It will allow freight trains going direct to the West Midlands to avoid Ipswich thus reducing the round trip by 2 hours as well as relieving pressure on passenger and freight services going towards London. Furthermore, the second tranche of capacity upgrades between Felixstowe and the Midlands, implemented in the next Network Rail control period, will allow trains operations in and out of the port each day to increase from 30 to 50. These enhancements, alongside private sector investment in rolling stock and terminals could increase rail’s market share from 25% to around 38% and result in the removal of 40 million long distance lorry miles from the A14 corridor per annum.

Further enhancements coming on stream early next year illustrate the economic benefits of upgrading the network; the Doncaster chord will remove 70 freight trains from the ECML where are there serious conflicts with high speed passenger trains and shorten the journeys to Eggborough, Ferrybridge and Drax power stations by between  25-40 minutes each way.  Similarly, the Joint line from Doncaster to Peterborough via Lincoln which runs parallel to the ECML, opening in November 2014, will provide more capacity, higher tonnage and faster speeds for intermodal traffic.

Industry rail freight forecasts showed that  traffic overall is expected to double in the period between 2010 and 2030 with consumer traffic growing four- fold so the ongoing upgrade to the SFN and other key routes, which are currently being planned by Network Rail for delivery between 2014-2019, are crucial if demand is to be realised.  Other potential upgrades to ports are being developed to ports include increased capacity out of Southampton Port as part of the electric spine project and improved signalling out of port of Immingham which has the highest UK rail freight tonnage. Proposed upgrades to the West Anglia route will help the North Thameside ports.  The first freight train left London Gateway, Britain’s newest deep sea port and Logistics Park, in late September fully laden with containers bound for Manchester. Additionally, gauge enhancements on the Great West Mainline which can be carried out at the same time as the line is electrified, are key for improving efficiency on this route.

Because of Government support for rail freight the industry has invested over £2 billion in the sector in the past ten years.

1. Financial analysis £70.7 million project having a Net Present value of £376m

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