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Transport for the South East Transport Strategy Consultation Submission from Freight on Rail.

January 2020

Freight on Rail thanksTransport for the South-East (TFSE) for the opportunity to comment on its Transport Strategy.

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

Summary

We welcome the recognition by TFSE that unrestrained economic growth is not sustainable and the need to move from ‘predict and provide’ to a ‘decide and provide’1 highlighted in the following text:

One where we are not continually providing for ever more cars and instead are building towards a more people orientated vision. Supporting economic growth, but not at any cost Economic growth, if properly managed, can significantly improve quality of life and wellbeing. However, without careful management, unconstrained economic growth can have damaging consequences or side-effects…2

In keeping with these crucial commitments by TfSE, we believe it should expressly mention rail freight’s socio-economic benefits which will not only allow TfSE to make the case for rail freight upgrades but also help it achieve its stated goals such as the need for  sustainable alternatives to the car and road freight.3

Moving goods by rail saves over £500m in socio-environmental benefits as well as a further  £1.1 billion economic benefits per annum.4

The following Government statement illustrates its support for rail freight:

“shifting freight from road to rail can result in significant CHG emission savings as well as economic and safety co-benefits"5

Rail freight offers substantial environmental benefitscompared with carrying the same tonnage by Heavy Goods Vehicles (HGVs). Rail produces 76 per cent less carbon dioxide, 6 less than a tenth of the carbon monoxide, around a twentieth of the nitrogen oxide, less than nine per cent of fine particulates and around 10 per cent of the volatile organic compounds7. This is true for diesel traction, which provides most rail haulage, while electric trains are even less polluting8.  

While rail freight may be minor in volume terms it is very important strategically as it provides alternative robust distribution options. Road and rail complement each other and getting more freight onto rail makes lorries more reliable as well as delivering significant socio-economic benefits. Rail is well placed to offer long-distance consumer services, as well as traditional bulk traffic. Many logistics companies want to use rail as part of their solution for a combination of reasons. These include the serious HGV driver shortage9, the good reliability of rail as well as their commitment to sustainability.

However, there is suppressed demand for rail freight services because of rail network constraints. The latest ORR figures on freight train reliability recorded its highest level in the first quarter of 2019/2020 for the past five years showed that 95.3% of trains arrived within 15 minutes of their scheduled arrival time 10.

For example, rail freight can help build more homes needed by supplying building materials in a sustainable way. The Minerals Products Association11 estimates that each freight train can carry enough materials to build 30 houses.

Freight on Rail supports the following statement, especially as rail freight’s role in the economy could be overlooked and its needs neglected, unless there is strong support for the rail freight upgrades from bodies, such as TfSE. 

Putting the user at the heart of the transport system This Transport Strategy envisages a transport network – particularly a local public transport and rail network – that places the passenger and freight user at the heart of it.12

Rail freight network upgrades needed

We concur with the stated rail freight challenges13 and the recognition of the need to invest in sustainable alternatives, such as rail freight14  and the need for further rail network investment.

Integrated land use and transport planning

We agree with TfSE that land use planning and transport planning need to be integrated15. This is important if sustainable freight options are to be adopted and the Government is going to achieve its climate change goals.  Being able to give direction to local authorities is part of this process. In the case of rail freight supportive spatial planning policy is needed to protect key rail alignments and sites for rail freight terminals without which volumes of rail freight cannot be significantly increased. Terminals/interchanges are the freight equivalent of passenger stations.

Multimodal freight terminals of all sizes required

The fact that more terminals of differing sizes are needed in the region in order to increase rail freight volumes needs to be recognised in the Transport Strategy. It must be noted that without more terminals, in the right locations with good rail and road links, it is difficult to significantly increase rail freight volumes.

Mitigation measures of terminals on local communities

Terminals and the surrounding road network must be designed to minimise the local adverse impacts of increased HGV movements as well as increased noise, light and air pollution.

Sub-National Transport Status

We support TFSE’s plan to get sub-national transport status, which will give it enhanced powers to influence spatial planning policy regarding transport and give direction and guidance to local authorities16. We note however that this status will not in itself give TFSE  full spatial planning powers.

Increased electricity power needed on rail network

There is no mention of the need for more electric power for the rail network as well as for the road network.17

Further Freight Study

We welcome further freight analysis as part of a future programme of studies18 as it is important to define interventions needed and make the necessary cost benefit justifications.

Congestion relief benefits of rail freight

The strategy acknowledges that freight is disrupted by congestion on many strategic road corridors.19  The following statistics demonstrate the congestion benefits of modal shift to rail from road.20

An average freight train can remove 77 HGVs21, while the longer ones can remove up to 200 HGVs.

HGVs were involved in 43 per cent of critical incidents lasting more than five hours, and 56 per cent of critical incidents lasting more than ten hours on motorways and trunk roads last year22. This despite the fact that HGVs account for just one in ten vehicles on our motorways.

Detailed response

  1. Key rail freight network upgrades

    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 rail freight routes mentioned, is crucial to satisfy customer demand across sectors. The strong benefit cost ratios for freight enhancements, typically in the range of 4:1 to 8:1, according to Network Rail.

    Targeted rail freight upgrades work

    It should be noted that the gauge upgrades to W10 on the Southampton route in 2009 led to a rail market share increase from 29 to 36 per cent of intermodal traffic out of the port within a year of completion of the project. A partnership between the South East Regional Development Agency and Network Rail organised the funding with further financial support from local authorities which demonstrates the importance of partnership working. 23

    We welcome the following references in the TFSE Transport Strategy which recognise what rail freight already achieves and what interventions are needed to increase rail freight volumes. We have made additional comments as appropriate.

    1. This means that the road and rail routes that connect the South East to the Midlands and North of England are particularly important to freight 24. The key corridor for rail are:

      The South Western Main Line/ Basingstoke – Reading Line between Southampton and the Midlands and High Speed 1/North Kent Line/South Eastern Main Line between Dover/ Folkestone and London. Most rail freight in Kent needs to pass through inner London to reach the rest of the country
      25.
       
    2. Additionally, the Brighton mainland improvements needed should explicitly include rail freight as freight capacity is becoming an emerging problem at Purley, Crawley and Newhaven.

    3. More rail freight paths and gauge clearance for routes in South London to access rail freight terminals in London are needed as mentioned in the Transport Strategy, congestion between Nunhead and Wandsworth Road. The importance of the Medway port for aggregates to supply London and South East 26 should also be taken into account. The existing 40 freight paths between Southampton and Reading are mentioned 27 but the Transport Strategy could also highlight their importance in reducing emissions and congestion in Southampton and along the A34 corridor as over 2000 HGVs are removed each day as a result of these rail freight movements. 

      Provide appropriate links and improvements to the highways and railway networks at expanding and/or relocating ports in the South East. This should include improvements to road routes, such as the A34 and A326, and parallel rail routes (serving Southampton) and A2 (serving Dover).28
       
    4. Cross modal benefits of upgrading A34 parallel rail route

      Department for Transport (DfT) sponsored research carried out by MTRU in 2017, shows that upgrading the existing rail lines which run parallel to key congested routes such the A34 would allow large numbers of lorry loads to be transferred to rail, easing congestion, reducing emissions and reducing road collisions.
      http://www.freightonrail.org.uk/PressRelease28-03-2018-Government-needs-to-act-on-its-own-recommendations-to-upgrade-key-rail-freight-port-routes.htm

      https://bettertransport.org.uk/sites/default/files/research-files/cross-modal-freight-study.pdf

       
    5. Figure 4.4 does not show the current rail freight challenges especially out of Southampton,  which should be included in this image, as well being addressed in writing in section 4.31.
       
    6. However, a further point to clarify is that extra rail freight capacity is needed now to cater for suppressed demand for rail freight services even without the port expansion.
       
    7. The strategy identifies the key existing flows below:

      Currently, most rail freight from Kent is forced to pass through inner London (notably on a busy section of the South London Line between Nunhead and Wandsworth Road, which carries up to two freight trains per hour. There are also heavyfreight    flows between Southampton and Reading, with up to 40 freight train paths each direction each day 29.

      In fact, around 40 per cent of the intermodal traffic out of Southampton port is carried by rail to the Midlands, the North and Scotland; moreover there is suppressed demand for more rail freight services constrained by lack of capacity on the network. The regular services (Monday to Friday) are 20 trains in, and 20 trains out of the port each day. Rail accounts for around 20 per cent of automotive services – six trains in and out each day. So together both commodities represents the removal of around 2,600 large HGVs each day. 30

      It is therefore welcome that the strategy highlights the need for the following key interventions in appropriate sections of the strategy:

      For rail: The South Western Main Line/ Basingstoke – Reading Line between Southampton and the Midlands and High Speed 1/North Kent Line/South Eastern Main Line between Dover/ Folkestone and London
      31.
       
    8. We would like to see the following pessimistic wording which makes rail freight seem so difficult, changed as both the capacity and capability constraints can be resolved by upgrades to the network. For example, on the A34 where there is demand for more rail freight services.

      A34 and there are constraints limiting the scope of rail freight to expand (for example, on the A34 corridor).
       
  2. Demand for rail freight

    There is pent-up demand for rail freight services because of the capacity and capability constraints on the rail network. Network Rail has forecast that rail freight could grow by around 30% by 2035 if sufficient capacity were made available 32.  
     
  3. Cross border working

    Furthermore, we support the recognition of the need to work across regional borders with other bodies as most rail freight flow cross more than one region and transport planning needs to be strategic 33. The example of the freight corridor from Southampton via the A34 northwards and the parallel rail routes shows the importance of integrated planning with England’s Economic Heartland.There is an important freight interface with this Sub-national Transport Body on the A34 Corridor, which connects the Port of Southampton with the Midlands and North of England 34
     
  4. Efficiency of HGVs

    While we support new technology to make road freight more efficient, national government policy needs to incentive efficiency with measures such as distance based lorry charging. 35 Because even though the HGV market is competitive, it is important to analyse how existing HGVs are not being used efficiently 36 and the resulting increase in unnecessary lorry miles. Almost a third of trucks are driving around completely empty; 29 per cent were completely empty in 2018 and 30 per cent were empty 37 in 2016/2017. A DfT spreadsheet prepared for Freight on Rail, showed that only 32 per cent of lorries were full in terms of volume in 2018; In 2017 the figure was 36 per cent and in 2016 only 34 per cent were full in terms of volume 38.

    The introduction of distance based lorry charging in Germany and Austria resulted in significant efficiency gains. The German Maut reduced empty running from around 30 to 19 per cent over a seven year period to 2008 according to operator T- Systems. 39 In Austria, empty running was reduced from 21 per cent in 1999 to 15.7 per cent in 2004 and at the same time the average load grew 0.6 Ton  to 14.7T. 40
     
  5. Rail freight share is growing

    Rail freight mode share nationally is relatively low (and is falling) 41 We challenge the statement that rail freight mode share is falling as this view is outdated and overlooks the latest growth as the market has stabilised after the steep decline in coal traffic in 2016. The figures for 2018/19 showed a three per cent increase compared to 2017/18. And the latest quarterly Office of Rail and Road (ORR) rail freight figures, issued in December 2019, show both consumer and construction rail traffic, the two largest sectors, continue to reach record levels. Construction traffic recorded its joint highest quarterly figure with a four per cent increase and consumer traffic a two per cent increase compared to the same quarter the previous year. 42

    However, we would like to point out that the reason that rail freight national mode share is relatively low 43 is because of a combination of factors:
     
    • Lack of capacity and capability on rail network as there is pent up demand for rail freight services
    • Lack of parity between HGVs and rail freight which makes it difficult for rail to compete, especially in consumer freight. Rail freight has considerably lower external costs than HGVs. 44  (see section 6 for detailed explanation).
       
  6. Lack of Internalisation of HGV costs distorts surface freight market
     
    Furthermore we do not think the following wording is a fair interpretation of the road versus rail market as there are serious imbalances in the surface freight market due to the fact that HGVs only pay around a third of their external costs which makes it difficult for rail to compete.

    There are understandable commercial reasons for a preference for road haulage, especially as the nature of logistics is changing (by moving away from bulk deliveries towards smaller ‘just-in-time’ package deliver).

    HGVs are only paying around 30% of their costs as there are no effective current charging mechanisms which distorts the freight market. This lack of parity makes it difficult for rail to compete on price.. Because HGVs are heavily subsidised and pay less than a third of the costs associated with their activities, it is difficult for rail to compete, especially in the consumer market, unless it is similarly compensated. That is why the DfT awards Mode Shift Benefits grants in recognition of reducing freight’s external costs

    We therefore believe that the Government needs to recognise road costs, such as road congestion, road collisions, road damage and pollution in any discussion about rail freight costs. Research commissioned by Freight on Rail, which used DfT Mode Shift Benefit values, found a high level of distortion of the market across modes - which equates to an annual subsidy of around £6.5 billion. These revelations show that there is a strong case for equivalently supporting rail through lower rail freight access charges and continued upgrades to the Strategic Rail Freight Network and other key routes in order to allow rail to compete more fairly with HGVs. Otherwise, HGVs’ external costs will continue to be a huge problem to society and the economy.

    Dangerous, dirty and damaging - New research reveals impact of HGVs
    2015 addendum to 'Heavy Goods Vehicles - do they pay for the damage they cause?'

    New research: Britain’s lorries receiving £5bn annual subsidy


    Heavy Goods Vehicles - do they pay for the damage they cause?

    Our conclusions are in line with two separate pieces of research:
     
    • MDS Transmodal study in 2007 which found a very similar amount of underpayment: £6billion.
    • Transport & Environment Research April 2016 which also found that HGVs across the EU were only internalising around 30 per cent of their costs.
      Are Trucks Taking Their Toll?


  7. Whilst we recognise that road and rail freight must work together to deliver efficient logistics for the UK, we do believe that all HGV’s external costs must in future be taken into account when examining options for rail freight costs and charges, and decisions around capacity.
     
  8. Government appraisal system, including web tag, needs to be revised to cater for decarbonisation
  9. We do however agree that this distortion is having a negative impact on the ability to decarbonise freight as the following states: 
     
    However, this is holding back the potential for freight to contribute to reducing carbon emissions and improving air quality in the South East.45
     
    If Government is to meet its de-carbonisation targets, it will have to increase the value of carbon and revise its appraisal systems.
     
    The following quote from the DfT Rail Freight Strategy 46 recognises these imbalances. We recognise the positive benefits of rail freight for the UK- including its environmental and air quality benefits relative to road freight and its impact on reducing road congestion. These benefits are not currently recognised in the track access charging regime. 

    Furthermore, the DfT rail freight grants are awarded for rail freight flows in recognition of the socio-economic benefits of removing HGVs from the road network.

  10. The need to invest in rail electrification, the proven low-carbon heavy freight solution
     
    TFSE mentions the difficulties decarbonising HGVs in its challenge 7. 47 The need to decarbonise freight has brought into focus the need for both HGVs and rail freight, which both have to deal with the same power to weight issues to plan the move away from diesel. That is why rail electrification, the proven solution for rail must be supported by the Government which needs to commit to a programme of electrification 48 to give the rail freight industry the confidence to invest in electric locomotives. Freight locomotives have long asset lives of between 20-40 years unlike HGVs which have asset lives of between seven to ten years. Many of the existing class 66 freight locomotives are now at half-life so research and development is needed now to provide alternative traction solutions for rail freight. Therefore, Government commitment to electrification is needed so that the sector can invest in new electric and bi-mode locomotives.
     
    In fact, the National Infrastructure Commission (NIC) confirms that rail electrification is a “proven technology”, which “could turn out to be cheaper and quicker than other approaches 49… improving network efficiency and providing wider benefits for passenger services 50, as already demonstrated across Continental Europe. And it also states that “there is currently no commercially available solution to decarbonise the heaviest HGVs”.
     
    The Committee on Climate Change report 51 of 2nd May 2019 supports a rolling programme of rail electrification. Industry expert Julian Worth makes the case for a re-wiring of around 320 key miles over a 10 year period which could see two thirds of rail freight moved by electric traction 52.
     
    Therefore, we believe that electrification must be strongly promoted. The Transport strategy states the following Implementing rail freight schemes, such as electrification and gauge enhancements, to increase capacity on strategic routes and encourage modal shift from road to rail.
     
    It should be noted that Institute of Mechanical Engineers sees hydrogen as a suitable fuel for local passenger services but not for high speed passenger or freight services 53.
     
  11. The UK leaving the European Union

    TFSE fails to mention that rail freight could play an increased role to help alleviate congestion at ports such as Dover as customs clearance for a whole train can be carried out at either origin or destinations. 54
     
  12. Rail has a role in the changing patterns of urban freight delivery
     
    There is a risk that the uptake of internet shopping will generate more traffic,particularly freight that is not well suited to more sustainable transport modes such as rail. 55 As mentioned in our section 6, the external costs of different modes need to be properly measured. However, rail can have a key role in bringing freight either to the edges or centres of conurbations for onward transhipment in low emissions vehicles for last mile if the necessary road/rail transfer points are built.
     
  13. Safety case for rail freight
     
    Transferring more freight to rail, can reduce the numbers of HGVs and the exposure to road collisions, as identified in its strategic social and environmental goals 56 57. The latest DfT safety statistics show that HGVs are almost five and a half times (541%) more likely than cars to be involved in fatal collisions on minor roads 58. The graph below shows HGV involvement rate in fatal collisions over the past eleven years broken down by road type.
      Graph showing Involvement in Fatalities HGVs over 3.5 tonnes compared to all traffic

Conclusion

We welcome TFSE’s support for the key rail freight interventions in the region.
TfSE needs to act now to de-carbonise freight and make the case for Government intervention. Rail electrification is tried and tested, unlike some of the other technologies being evaluated for large HGVs. Therefore Government should commit to rolling programme of electrification as recommended by RIA and CCC and supported by TfSE.

 

1. TFSF Transport Strategy Executive Summary PXI

2. TFSE Transport Strategy Executive Summary

3. Ibid PXI P97 strategic social and environmental goals

4. Rail Delivery Group Rail Freight – Working for Britain 2018

5. DfT Rail Freight Strategy September 2016   

6. Network Rail Value of Freight 2013

7. Freight Transport Association Helping rail freight deliver for its customers 2018

8. In 2018, an average German freight train emitted around 18 grams of carbon dioxide per tonne-kilometre. The emissions of an average truck were112 grams of CO2 per kilometreUmweltbundesamt

9. ORR  The Freight Delivery Metric – 26th September 2019 

10. ORR  The Freight Delivery Metric – 26th September 2019 

11. Mineral Products Association Why is rail freight vital for housing and construction? 2016 

12. TFSE Transport Strategy Executive Summary PXI

13. TFSE Transport Strategy Journeys to International Gateways and freight journeys PXIII

14. TSFE Transport Strategy - Improved road and rail access to international ports - Lower Thames Crossing • Demand management policies to improve the efficiency of the transport network for road freight and to invest in sustainable alternatives • Rail freight schemes TFSE Executive Summary P Xiii

15. TFSE Transport Strategy Executive Summary PXI

16. Ibid P98

17. Ibid P88

18. TFSE Transport Strategy P101

19. TFSE Transport Strategy Executive Summary Page Xiii

20. Ibid section 4.36

21. Network Rail Value of Freight 2013

22. Source Highways England via FOE on HILO data

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

24. TFSE Transport Strategy The gateway to the British Isles 2.24- 2.26

25. TFSE Transport Strategy section 2.2.6

26. TFSE Transport Strategy  P36 4.33 4.34

27. TFSE Strategy section 4.29

28. TFSE Transport Strategy International Gateways & Freight Journeys P85

29. TFSE Page 83  section 4.29

30. Port of Southampton Port Masterplan 2016 Associated British Ports 2016

31. TFSE Transport Strategy P28 section 2.26

32. Network Rail Rail freight forecasts Scenarios for 2033/34 & 2043/44.2019

33. TFSE Transport Strategy  2.27 2.28

34. TFSE Transport Strategy  P28 section 2.27

35. Ibid challenges 5 & 6

36. TFSE Transport Strategy Page 7

37. DfT Rail Freight Strategy September 2016   

38. DfT Rail Freight Strategy September 2016   

39. T-Systems: Toll Collect fact sheet.

40. VCÖ-Factsheet 2013-16 - Lkw-Maut in Österreichausweiten (2016)

41. TFSE Transport Strategy P84 Challenges and opportunities

42. https://dataportal.orr.gov.uk/media/1654/freight-rail-usage-performance-2019-20-q2.pdf

43. TFSE Transport Strategy P84 Challenges and opportunities

44. The environmental benefits from moving goods by rail rather than by other modes are substantial – Rail Freight Delivering for Britain P5 Rail Delivery Group 2019

45. TFSE Transport Strategy P84 Challenges & Opportunities

46. DfT Rail Freight Strategy P10 section 26

47. TFSE Transport Strategy P84

48. TVCA Electrification is the answer for rail P35

49. DfT Rail Freight Strategy September 2016   

50. National Infrastructure Commission Freight Study April 2019 electrification P73

51. https://www.theccc.org.uk/comingup/uks-long-term-climate-targets/ Page 199

52. DfT Rail Freight Strategy September 2016   

53. Institute of Mechanical Engineers The future of Hydrogen trains Feb 2019

54. TFSE Transport Strategy Challenge 7 P89 

55. TFSE Transport Strategy Challenges & opportunities challenge 5 P84

56. TFSE Transport Strategy P78

57. TFSE Transport Strategy P97

58. Source: Traffic statistics table TRA0104, Accident statistics Table RAS 30017 DfT issued September 2019

 

 

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