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Column - January 2017
 

Rail freight is a crucial part of the distribution solution

Increasing rail freight volumes will help the Government achieve its policies to reduce road congestion, road collisions, pollution and improve economic productivity. Rail freight, worth £1.6 bn per year to UK PLC, is a crucial part of freight distribution with significant socio-economic benefits, as confirmed by the Government latest Rail Freight Strategy 1.  Road and rail complement each other so it is important that each mode plays to its strengths. Therefore, an integrated multi-modal approach to freight by the Government helps the efficiency, robustness and reliability of the supply chain. 

The Government has recognised rail’s crucial role in offering the long distance trunk haul for consumer rail freight, as well as traditional bulk traffic by introducing the DfT Strategic Rail Freight Network Vision, around ten years ago to develop these markets. Since then  intermodal deep sea services have seen sustained growth of 30% . Consumer rail grew 7% last quarter compared to the previous year’s same quarter – the highest level since 1998 2; and critically, there is suppressed demand for more rail freight,which cannot be fulfilled currently, because of the lack of capacity on the rail network.Furthermore, consumer rail freight is forecast to grow fourfold by 2043 if the network is upgraded and additional road/rail transfer points obtain planning permission.

The Hendy Review recognised that rail freight projects give significant socio-economic benefits to the UK. It stated that the average benefit cost ratio for rail freight schemes is between 4 to 5: 1. Targeted investments work as the gauge enhancements out of Southampton port resulted in rail market share increasing from 28 per cent to 36 per cent within a year of completion with more than 5:I cost benefit ratio 3.

The DfT rail freight strategy, published in September, provides a clear vision for rail freight to help the industry plan and provide greater certainty to customers and investors as it adapts to steep declines in coal and steel traffic. DfT has a key role in setting overall strategic framework in providing guidance to the regulator and Network Rail as well as guiding devolved and local Government.

Each year the industry carries goods worth over £30 billion ranging from high end whiskies and luxury cars to supermarket goods, cement and construction materials. A quarter of consumer goods imported into the UK are transported by rail and customers want more rail services. Taking the Felixstowe example where rail already has 28 per cent of the modal share out of Felixstowe with 33 daily rail services in and out of Felixstowe port to the north; customers want more rail freight services so every additional rail slot which comes free on this key strategic freight corridor can be filled straight away. As part of the current CP5 HLOS upgrades, Network Rail is upgrading the Felixstowe branch line which will provide an additional ten paths. However, further enhancements along the rail corridor to the North, supported by the industry and highlighted as a key priority in the Network Rail Market Study and the DfT Rail Freight Strategy, but as yet unfunded, could remove 40 million lorry miles from the A14 corridor. 
The latest daily HGVs traffic counts on the A14 outside Felixstowe recorda total of 5632 HGVs, of which 86% are the largest ones,the most likely candidates for transfer to rail 4. These figures demonstrate the potential to transfer significant flows to railwhich would improve the efficiency of the remaining HGV traffic, were the route upgraded; each train can remove 77 HGVs from the A14 corridor.

Strategic Rail Freight Interchanges (SRFIs) are an intrinsic element of shifting more freight to rail as they enable rail to compete with HGVs by reducing the transhipment costs between the modes. For example, the SRFI at Daventry in Northamptonshire removes 23 million lorry miles each year, mainly off the congested road network. Developers want to invest in SRFIs as the growing number of proposals such as East Midlands Airport, Etwall Common near Derby, I-Port Doncaster and Four Ashes near Stafford demonstrate.

Changes in urban logistics policy as a result of air pollution violations, road congestion, the growing awareness of cycling safety as well as devolution, favour rail. As it can offer the safer more sustainable long distance trunk haulage element of the journey for onward transhipment into low emissions vehicles, as long as consolidation centres and terminals are rail connected. In fact, the Government has serious pollution problems which rail freight can help alleviate. For the second time in 18 months the High Court ruled against the Government’s inadequate plans to combat air pollution, which are contributing to 50,000 early deaths and costing £27.5bn every year. HGVs, account for half nitrogen oxide road emissions on the Strategic Road Network, while only making 5 per cent of road miles driven in the UK. Rail, which produces almost 90% less PM10 emissions and up to fifteen times less NOX emissions than HGVs, can help alleviate this air pollution crisis, which is particularly dangerous in urban areas. London and Manchester are already exceeding their NOX emissions limits.

Rail freight produces 76% less CO2 emissions than the equivalent HGV journey, so increasing rail freight can help the UK meet its legally binding Climate Change targets to reduce CO2 emissions by 80% by 2050. In 2014 carbon dioxide emissions from transport went up from 25 per cent to 28 per cent. Surface transport emissions account for the vast majority (94 per cent) and of that HGVs contribute 17 per cent, despite making up only 5 per cent of road vehicles. Both passenger and freight rail together are less than 2 per cent.As part of the Government policy to reduce CO2 emissions, the Department for Transport is conducting a Freight Carbon Review, of which the increasing rail freight volumes is a key element, as defined in the Rail Freight Strategy.

In the context of Brexit, there is a strong case for upgrading rail freight links to ports and conurbations in the near future to build effective trade links. Therefore the next logical step is for the Government to upgrade key elements of the Strategic Rail Freight Network, in the next Network Rail Control Period 6 (2019-2024), as identified in its own strategy and endorsed by the Network Rail Freight Market Study, to cater for suppressed demand for rail freight services.

 

1. DfT Rail Freight Strategy September 2016 https://www.gov.uk/government/publications/rail-freight-transport.

2. http://orr.gov.uk/__data/assets/pdf_file/0015/22902/freight-rail-usage-2016-17-quarter-1.pdf

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

4. ie five, six and six + axle HGVs

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