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Response to Midlands Connect application to become a Sub-National Transport Body.

June 2018

Thank you for the opportunity to comment on the application.

Freight on Rail, a partnership of the rail freight industry, the transport trade unions and Campaign for Better Transport, works to promote the economic, social and environmental benefits of rail freight to local, devolved and central Government.

Freight on Rail supports the Midlands Connect (MC) application to become a sub-national transport body and is keen to work with the authority. However, a new sub-national transport body such as Midlands Connect should draw its powers and funding down from central government, not away from those local authorities, most notably Transport for the West Midlands, that are already delivering effectively on the ground and have robust intermodal policies for the future.

Franchises
Midland Connect must ensure that the governance in the franchises ensures that the train operating companies are obliged to take freight’s needs into account and incentivised to promote more rail freight volumes. Tocs must be obliged to give adequate notice of possessions and to cater fully for freight services during engineering works. 

Summary

However, we do believe that, the MC Transport Strategy, Jacobs Freight Narrative Report and the Freight Strategy Overview of 2017, should have a broader more integrated approach to freight transport encompassing all modes. Otherwise the opportunities to reduce the adverse impacts of freight distribution will be missed. At the moment the planned interventions are all too focused on road improvements and do not properly acknowledge that upgrading the rail freight network is part of the solution to providing efficient and sustainable freight distribution. While Freight on Rail is pleased to see support in principal for more rail freight capacity, capability and terminals,these policy objectives are not translated into prioritized defined interventions so we believe that the rail freight upgrade schemes should get higher priority. The following briefing demonstrates the benefits of rail freight upgrades to the Midlands and the UK as a whole.

The strong benefit cost ratios for freight enhancements, typically in the range of 4:1 to 8:1, highlighted in the latest Network Rail Route Strategic Plan, should be factored into investment planning. Targeted rail freight upgrades work; the gauge upgrades out of Southampton Port increased rail’s market share from 29 to 36 per cent within a year and had a benefit-cost ratio of five to one. 

The latest analysis by KPMG, in December 2017, confirms this and shows that rail freight is moving on from the sectorial challenges due to the sharp decline in coal movements. In 2016, rail freight generated economic benefits for UK Plc of £1.73bn, which included productivity benefits of £1.17bn for Britain’s businesses and externality benefits of £0.56bn, through lower road congestion and environmental gains.Productivity and externality benefits have also been disaggregated to a regional level to demonstrate rail freight’s role in supporting regional economies. The heat-map illustrates rail freight’s role in supporting businesses around the country with the majority of the benefits accruing in four regions – North West, Yorkshire and the Humber, Scotland and the West Midlands.  Together these regions accounted for nearly 60% of the total national productivity and externality benefits delivered by rail freight in 2016. In total 87% of rail freight activity is outside London and the South-East i.

Congestion costs UK £30 billion a year according to Inrix’s latest figures with the UK ranked the fourth most congested developed country and third most congested in Europe. Rail freight could and should be part of the solution; shippers and construction firms are crying out for more rail freight services which are constrained by the rail network.  

Building more roads alone will not solve the problems as it creates new trafficunless there are charging mechanisms which reflect all the external costs vehicles impose on society and the economy. When a new road is built, new traffic will divert onto it, a well-known and long-established effect ‘induced traffic’.1 Therefore more efficient use by lorries of existing roads is part of the answer.

  1. Midlands Connect Transport Strategy.

    In principle, the Transport Strategy recognises the importance of rail freight in the region and beyond by stating that providing sufficient rail freight capacity is a key aim P13 and it highlights the key rail freight corridors on the following pages 20, 33, section 4.10, P38.However, the investment plans, nor the rail freight growth forecasts adopted, do not reflect the wider policy commitments.
     
    For example many of the freight network pinch-points are the same for both road and rail so upgrading the parallel rail route can significantly reduce HGV numbers offering an alternative and thereby provide reliance to the network. Midlands Connect recognises the importance of east – west connections for freight.
    Research commissioned by Freight on Rail, sponsored by the DfT, see section ?makes the point that:-

    a) Rail freight growth potential must be analysed corridor by corridor rather than national average
    b) Scenario forecasting is a proven tool but taking averages from scenarios can be problematic 

    The biggest issue facing rail freight is a shortage of infrastructure capacity so continued Government investment to unblock pinch-points and improve the capability of the Strategic Freight Network, is crucial to satisfy customer demand in both intermodal and construction sectors.
     
  2. MC not using industry agreed forecasts set out by Network Rail

    Midlands Connect says it wants to work closely with Network Rail and yet it is disappointing that it chooses not to use the Network rail freight industry agreed forecasts for future freight growth. The devolved Network Rail routes are using Network Rail national forecasts to avoid inconsistency across boundaries but Midlands Connect has used different forecasts that do not align with Network Rail’s forecasts. Of particular concern is that Midlands Connect is forecasting significantly fewer freight paths between Felixstowe and the West Midlands and on the corridor between Leamington Spa and Coventry than the industry’s agreed forecasts. This is unhelpful because it will likely underplay the value of schemes that are proposed to support rail freight growth to, from and through the Midlands.
     
    It is crucial that all stakeholders works from the same planning assumptions and therefore use the same set of forecasts, in order to ensure that the most accurate business cases are developed and that rail upgrade schemes deliver the highest value for money. Rail freight needs sufficient rail paths on key strategic routes in order to grow rail freight volumes as there is already suppressed demand.
     
    Road and rail freight complement each other and should play to their strengths to offer an integrated supply chain to customers, who are largely mode agnostic. Rail freight is well placed to offer long distance consumer (intermodal) and traditional bulk materials in particular construction traffic, the two main sectors, which make up two thirds of the market now. For example, rail is crucial for infrastructure and housing development which has seen sustained growth in recent years; it has increased by nearly 60 per cent up over the previous decade, with sustained growth every quarter last year. It has a bright future fuelled by the demand for housing and infrastructure development. Shippers prefer to use rail to transport containers out of Southampton (and other container ports outside the South-East) and are calling for more services. Brexit is likely to increase the need for rail services to reduce congestion in our ports.
     
    The environmental social and economic benefits of rail freight  do not get sufficient acknowledgement as it imposes much lower external costs on society than HGVs as recognised in the DfT Carbon Review of February 2017 - Shifting freight from road to rail can result in significant CHG emission savings as well as economic and safety co-benefits. If freight is not transferred to rail, society and the economy picks up these external and congestion costs.
     
    These conclusions are in line with two other separate reports.  MDS Transmodal study in 2007 found a very similar amount of underpayment: £6billion. Transport & Environment research  issued in April 2016 found that HGVs were only paying 30% of their external costs.
     
  3. Corridor research, sponsored by DfT, shows investing in rail can reduce road congestion, pollution & collisions

    Impact on congestion of transfer of freight from road to rail on key strategic corridors, confirms the point, that integrated rail and road planning is the best way to reduce road congestion, collisions and pollution. In the case of certain strategic transport corridors, it is possible to improve road conditions. If long distance consumer freight and construction materials can be transferred to rail, the productivity and reliability of existing road services will improve without needing to add any extra lanes of motorway.
     
    Research by MTRU that we commissioned, sponsored by the DfT,  shows that upgrading the existing rail lines which run parallel to key congested motorway routes would allow large numbers of lorry loads to be transferred to rail, easing congestion, improving air quality and reducing road collisions.

    The research examined the socio-economic benefits of upgrading existing rail lines on four heavily congested routes including the A14 from Felixstowe to the Midlands, A34 from Southampton to the Midlands, the North and Scotland and M6.
     
    Transferring an additional 2000 HGVs, equivalent to up to 8000 cars, from each of these corridors separately every day to rail would significantly improve road conditions without needing to add extra road capacity and would reduce nitrogen oxide emissions by 10 per cent and particulates by 7 per cent per corridor. Furthermore, it would also reduce fatalities. See safety section.
     
    Already the 33 freight trains in and out of Felixstowe remove around 2500 lorries per day off the congested A14 corridor. The A14 corridor from Felixstowe has up to 6,500 of the largest HGVs, (5 & 6 axle articulated lorries) on the route each day which represents between 10 and 17 per cent of all traffic. If the rail network was fully upgraded, rail freight could be increased by 50 or 60 per cent on the A14 corridor removing a further 2000 trucks each day which are equivalent to between 6000 to 8000 cars 3, once calculations are made for the extra space and braking distances for these large HGVs in congested conditions.
     
    See page 11/12 of MTRU report ii which used DfT road counts AADF. So removing up to 2000 large HGVs would have a huge impact on congestion and productivity as well as reducing pollution and road collisions.
     
    http://www.bettertransport.org.uk/invest-rail-freight-cut-road-congestion-research-shows
     
    http://www.bettertransport.org.uk/new-research-shows-just-2000-less-hgvs-would-mean-ten-cent-reduction-air-pollution

     
    The following DfT statement, on 21stApril 2017, supports corridor analysis and recognises that integrated rail and road planning into a cross-modal approach is the best way to reduce road congestion, collisions, and pollution. DfT said: "We agree with the Campaign for Better Transport that rail freight offers real benefits for the environment and helps keep bulky loads off of the road network, helping to ease congestion for other motorists. We look forward to using these findings to help inform our coming road and rail strategies and are committed to working with the rail freight industry to support growth of the sector.”
     
  4. Technology and the lack of HGV efficiency

    Technology alone will not improve HGV efficiency unless correct economic drivers are there to incentivise better load utilisation. For example, DfT figures show that empty running rose to 30 per cent in 2016 and only 34 per cent of lorries were constrained by volume. HGVs are competitive but not efficient. The strategy quotes the FTA statement that it costs £1 a minute for run a 44 tonne truck; the lack of HGV efficiency indicates that the current mechanisms are not incentivising better efficiency. Furthermore, the DfT does not quantify the delays to freight trains and the impact.

    The map on Page 36 shows the high level of delays on key routes such as the A14, A34 and M6 where there are parallel rail routes which could help alleviate the congestion, pollution and collisions. Parts of the A14 corridor have also been identified by DfT as having high casualty rates.  
     
  5. The case for distance based HGV charging to improve HGV efficiency

    Thus to improve economic efficiencies there should be a direct relationship between the taxes per km travelled and the marginal costs which a distance based charging system can provide. It is the calculation of these marginal costs which is crucial during the HGV levy revision.
     
    HGVs have a wide range of impacts; these include congestion and pollution but also safety and infrastructure impacts not mentioned in the review.  Currently, HGVs are only internalising around a third of their costs so until HGVs internalise more of their costs HGVs will continue to be a huge problem to society and the economy.  Moving to distance based charging will have economic, productivity and competitiveness benefits as well as environmental benefits and is also likely to lead to a shift to rail, which should have further benefits.
     
    The single most effective change to achieve all the Government’s stated objectives of improving efficiency, reducing exposure to collisions and reducing air and CO2 pollution would be to replace the existing time based lorry charging system with a distance based system which could relate charges paid to the real impacts HGVs have on other road users and the road network.  The current daily charge bears no direct relationship to the amount of use of the network therefore the system does not incentivise more efficient use of the road network or the time at which it is used, and the system does not therefore incentivise efficient use of the network.
     
    A distance-based lorry charging scheme could improve HGV efficiency by incentivising more efficient use of lorries, in order to reduce lorry miles. The current empty running and load utilisation figures show that road haulage industry efficiency is not improving. In 2016, the average lading weight was 68 per cent. 2
     
    Whereas distance based charging in both Austria and Germany have reduced both empty running and improved efficiency. Germany had similar levels of empty running before distance based charging was introduced but now it has decreased by a third. In Austria empty running reduced by a quarter from 21,1 per-cent in 1999 to 15,7 per cent in 2004. At the same time the average load grew 0,6 Ton  to 14,7T. 3
     
  6. Lorry Platooning

    MC putsconsiderable hopes on lorry platooning ref pages 4,7.Page 43 which is in its infancy and is unproven unlike rail freight, even though the road haulage industry remains sceptical. The carbon gains may only be around 5 per cent whereas rail freight reduces carbon by 76 per cent per tonne carried.However, there are serious obstacles to it being practical in the UK because our road network is so congested with frequent exits close together. If they are on the inside lane, how do other vehicles join and leave the motorway? If on the outside lane, there are safety issues of other vehicles “undertaking” them on the inside, and of vehicles joining and leaving the platoon crossing all the other lanes of traffic. Lots of operational questions remain about HGV platooning. What will the public attitude be and how will platoons interact with other road users. And crucially where will HGVs formulate road trains and who will pay for this? What happens if a middle vehicle breaks down and needed to be disengaged in road side refuge. How would this approach fit with so-called smart motorways and how does a platoon overtake slow vehicle?
     
    The country needs the flexibility of different freight modes so that they can play to their strengths. Road and rail complement each other. Rail is particularly well placed to deliver the long distance consumer trunk haulage as well as the traditional bulk cargoes. But as we know this market is very price sensitive
     
  7. Socio-Economic benefits of rail freight

    A.
    Safety benefits of rail freight should be factored into intermodal decision-making
     
    There is no mention of the considerable safety benefits of rail freight which should be factored into freight transport strategic and planning decisions. HGV involvement rate in fatal crashes on local roads has doubled in the past ten years.
    Our ten-year analysis of DfT Road Safety statistics, which show that HGVs are now twice as likely to be involved in a fatal collision on minor roads as they were ten years ago, demonstrates the benefits of reducing lorry miles. Despite only making up five per cent of overall traffic miles, HGVs are almost seven times more likely than cars to be involved in fatal collisions on minor roads.
     
    Whilst cars are getting safer, HGVs continue to be dangerous in a collision because of their size and weight. The figures also reveal little or no improvement in the rates of fatal collisions involving HGVs on motorways and A roads. In 2014, on motorways, HGVs were involved in almost half (45 per cent) of fatal collisions although they only accounted for 11.6 per cent of the miles driven on them. 

    Graph showing involvement in fatalities HGVs over 3.5 tonnes compated to all traffiic 

    Source: Traffic statistics table TRA0104, Accident statistics Table RAS 30017, both DfT
    The following DfT table shows the benefits of preventing collisions


    Tabled data showing the valuation of the benefits of prevention of accidents
    B Congestion
     
    • Congestion costs the UK £30 billion in 2016 with the UK ranked the fourth most congested developed country and third most congested in Europe. Building more roads alone will not solve the problems as it creates new traffic. When a new road is built, new traffic will divert onto it, a well-known and long-established effect ‘induced traffic’.
       
    • The largest freight trains in the UK can remove up to 160 HGV journeys from our roads
      - Value of Freight July 2013 Network Rail
       
    • One train can carry enough materials to build 30 houses
      Mineral Products Association November 2016
       
      DfT estimate the cost of congestion being £0.99 per lorry miles on the most congested roads.

    C. Road infrastructure damage

    • Lorries do cause far more damage to foundations and structures of roads than cars because the damaging power rises exponentially as weight increases. This is called the Generalized Fourth Power Law. The standard six-axle44 tonne 16.5 metre truck is 136,000 times more damaging to road surfaces than a Ford Focus. Therefore some of the heaviest road repair costs are therefore almost exclusively attributable to the heaviest vehicles. Lorries are only paying 11 per cent of their infrastructure costs despite what the FTA claims.

      http://bettertransport.org.uk/media/20-march-2018-FTA-false-claims

    D. Reducing emissions and improving air quality

    • As rail freight produces 76% less CO2 emissions than the equivalent HGV journey, increasing rail freight is an important part of the DfT’s policy to reduce freight’s emissions and help the UK meet its legally binding Climate Change targets. Source DfT Rail Freight Strategy September 2016
    • HGVs contribute 17 per cent of surface access CO2 emissions, despite making up only 5 per cent of road vehicles whereas both passenger and freight rail together are less than 2 per cent. Source DfT Rail Freight Strategy September 2016
    • Road Freight is a big CO2 emitter as HGVs contribute 17 per cent of surface access CO2 emissions, despite making up only 5 per cent of road vehicles. Reducing emissions from road freight is expected to be challenging, confirmed in a report from AECOM:“it will be very difficult to meet the 2050 goals without major reductions in GHG emissions from Heavy Goods Vehicles (HGVs).

Furthermore, while electric technology means car and van emissions can be reduced significantly, the DfT has stated that it expects the existing HGV diesel engine technology to be predominant well into the next decade in its carbon review in February.

Air quality

  • Rail produces 90 per cent less PM10 particulates and up to 15 times less nitrogen dioxide emissions than HGVs for the equivalent journey. Highways England figures show that HGVs are producing around 50% of the nitrogen oxide pollution from road pollution on the strategic road network even though they only make up 5 per cent of road miles driven in the UK.
  • HGVs account for around 21 per cent of road transport NOx emissions while making up just 5 per cent of vehicle miles. A shift to rail freight will play an important long-term role in reducing non-exhaust particulates (PMs). While the latest EuroVI engine technology reduces exhaust particulates, non-exhaust particulate pollution from HGV tyres and brakes, which is hard to reduce for trucks, will remain a serious problem for which there is no current solution, especially for trucks which have large tyres. 

Non-exhaust particulate emissions will also continue to be a considerable health risk for electric cars and vans, a point which has not been widely acknowledged to date.


i Rail Freight Working for Britain Rail Delivery Group June 2018 https://www.raildeliverygroup.com/files/Publications/2018-06_rail_freight_working_for_britain.pdf
ii https://bettertransport.org.uk/sites/default/files/research-files/cross-modal-freight-study.pdf

1. CPRE: The end of the road? Challenging the road-building consensus (March 2017)
2. DfT: Domestic Road Freight Statistics, United Kingdom 2016 (July 2017)
3. VCÖ-Factsheet 2013-16 - Lkw-Maut in Österreichausweiten (2016)


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