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Comments on Listening to Industry event – Rail freight in the supply chain

Thank you for running the event and giving stakeholders the opportunity for further comments.

The following points, which were not included in your summing up notes, were discussed at our session so we ask that they are added to your analysis and taken into account when weighing up why and how to support rail. 

  1. Is there scope for the relationship between rail and road to become more collaborative? If so, how could Government facilitate this?

    Road and rail complement each other but the reference to the issue of cost of transhipment by rail does not take into account the fundamental imbalance in the market place which makes it so difficult for rail to compete. The difficulty for rail and water is that there is not a level playing field between the different modes and the extent of this imbalance needs to be taken into account in any cross modal analysis. Government acknowledges this distortion through mode shift benefit grants which are awarded for the benefits to society and the economy of actual containers taken off the roads. However, as it stands, the grants do not compensate for the level of subsidy given to road and the latest research for Campaign for Better Transport highlights the subsidy given to HGVs and the resulting external costs.

    The latest research commissioned by Campaign for Better Transport to inform the debate about freight costs, uses the latest DfT values for Mode Shift Benefit values and shows that HGVs pay less than a third of the costs they impose on society and the economy. Because HGVs receive a higher level of subsidy than rail, we believe that there is a strong case for the Government compensating rail and water accordingly by lowering rail freight charges and continuing to develop the rail freight network. This would allow Government to support modal shift in order to protect society from the adverse impacts and external costs of HGVs, where it is possible to transfer to rail. For example, as well as the traditional bulk markets, rail, which has recently gained market share, is well placed to provide the long distance trunk haul for consumer products.

    Campaign for Better Transport research on lorry track costs
    While the December 2014 revised mode shift benefit values give a more accurate evaluation of lorry track costs, the table within the CBT revised research, see item 1, highlights a number of areas where the Government’s understanding of the costs and impacts of lorries is flawed or outdated and demonstrates that the current MSB figures need to be revised to better represent the true costs of HGVs.

    ORR new cross modal duties
    In the context of these new duties it is important that the costs of both rail and road freight are understood by the Government. The CBT research informs this debate.

    It should also be noted that RFG and FoR are the specialist rail freight bodies who can advise.
  2. The Growth in rail’s market share implies an increase in customer confidence in its power to deliver effectively and efficiency. What more might industry and Government be doing to develop rail freight’s commercial credentials?

    We support the statements outlined in item 2 with the proviso that , trade access charges should read track access charges in the first paragraph of item 2. Government is in a position to provide the long term stable environment that allows and encourages private sector investment as well as laying out an affordable charging regime for main rail network, Channel Tunnel, HS1 & 2 with access charges set at a reasonable level which enables direct competition with road freight. Similarly, as stated, longer term certainty is needed with the grants regime.

    We believe that, in order to achieve these objections a holistic and transparent approach to allocation of passenger and freight capacity is needed by DfT.

    Continuation of the development of the Strategic Rail Freight network in CP6 and beyond as well as electrification of key routes to conurbations and ports will enable the industry to provide a more diverse reliable service to customers with diversionary routes. It will also help freight reduce its carbon emissions to meet the Government’s own targets as well as reducing road congestion, road infrastructure damage and exposure to road collisions.

    The role of rail in consolidation centres
    With added emphasis on lowering urban emissions, consolidation centres will be increasingly important to break bulk and transfer freight into low-emissions vehicles. This approach will mean that rail can more readily compete and supply the long distance elements of flows.
  3. There is a wider challenge over public understanding of the importance of freight, which affects development of rail freight facilities. What could the sector and the Government do to improve public perceptions

    The Government’s revision of the National Networks National Policy Statement is most welcome as the new policy makes the case for rail freight terminals. This policy should give developers the confidence to bring applications for Strategic Rail Freight Interchanges before the planning system now.

    We support the idea of an awareness campaign so the public know what rail freight is already achieving for the UK and its potential to expand.  The public should be made aware of all the environmental and economic benefits of shifting freight from road to rail in terms of road congestion, reduction in accidents, reduction in road infrastructure damage and reduction in carbon dioxide emissions and air pollution.

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