Shaw Review must not throw out the freight baby with the NR bath water.
The Freight on Rail response to the Government will set out why and how rail freight, which is a network-wide industry, must not be overlooked in any restructuring or devolution of Network Rail (NR). Furthermore, we will state that whatever the structure, it needs to be incentivised to take into account the needs of rail freight and explain why we do not support passenger operator-led infrastructure management.
Network Rail is in charge of signalling and the track and has an overriding command and control function.In railways terms its functions are Operations, Maintenance, Renewals and Enhancements (OMRE). The importance of rail freight in terms of its considerable socio-economic benefits to UK PLC must not be underestimated in any structural changes in this review. Fundamentally, any restructuring must not undermine the sector. We believe that further fragmentation would be a major challenge for an efficient and productive rail freight industry, as well as overall safety on the railways.
A continued centralised system operator function within NR which takes in the national co-ordination and system planning needs of all the different users, including rail freight as we as open access passenger operators, is crucial. As NR’s routes become increasingly autonomous, and the ambitions for political as well as geographical devolution of transport increase, the need to better define and structure these functions is ever more pressing.
The move towards devolved control of local passenger services and more autonomy for NR routes, poses serious challenges for rail freight. The vast majority of rail freight flows cross route boundaries which is why nationwide access, timetabling and possession planning must be managed through a central system operator. We believe that graphing rules should start with long distance passenger and freight services. In the case of possession planning, freight customers must be offered alternative diversionary routes.Planning and management of services across the network is vital as are consistent safety standards across the network. Without a strong and clearly defined central system operator function greater safeguards will be required to protect rail freight access.
Timetables need to be co-ordinated between different train operations as well as other modes of transport. Similarly, investment needs to be co-ordinated with integrated transport planning across the rail and road networks. We believe that future strategic planning for investments in parallel rail and road corridors needs to be integrated to maximise the socio-economic benefit of new or enhanced infrastructure. Therefore, the next stage of the Road Investment Strategy (RIS2) and CP6 HLOS processes should identify the corridors with the largest opportunities for rail freight to relieve road congestion.
Rail freight is worth £1.6 billion per year to the UK economy. Each year the rail freight industry carries goods worth over £30 billion ranging from high end whiskies and luxury cars to supermarket and automatic products, cement and construction materials. While coal, steel and Channel Tunnel traffic has declined sharply in the past six months, long distance consumer (intermodal and deep sea) and construction traffic can bridge these gaps if the required additional freight capacity is built. Currently a quarter of consumer goods imported into the UK are transported by rail and London alone receives 40% of its construction materials by rail. Furthermore, consumer traffic grew 5% last year and is forecast to quadruple by 2034 and construction trafficgrew 10% last year and is forecast to grow 2.5% per year.It is well known that there is suppressed demand for rail freight services out of the ports of Felixstowe and Southampton particularly where the provision of additional freight path would beused immediately so, it is crucial thatthe current Strategic Rail Freight Network CP5 funded schemes to upgrade the Felixstowe branch, Southampton train lengthening and access to Liverpool Port are urgently implemented as well as the train lengthening work at Buxton to grow more construction traffic.
The Hendy Review, which was tasked with reviewing the status of the Network Rail enhancement projects, acknowledged rail freight schemes deliver very high value for money. It stated that the average benefit cost ratio for rail freight schemes is between 4 to 51, which demonstrates that rail freight upgrades offer significant socio-economic benefits to the UK.Any structural changes which disadvantages rail freight and causes reverse modal shift will result in extra costs elsewhere for the Government as HGVs impose far higher costs on society in terms of congestion, road crashes, pollution and road damage. HGVs impose nine times higher external costs than rail freight. For example, in 2013, HGVs were six times more likely than cars to be involved in fatal collisions on minor roads2.Research carried out by MTRUforCampaign for Better Transport3 using DfT values, found that HGVs pay less than a third of their costs, such as road congestion, road collisions, road damage and pollution which equate to an annual subsidy of around £6.5 billion. These conclusions are in line with a MDS Transmodal study in 2007 which found a very similar amount of underpayment: £6billion. The Government needs to recognise HGV costs in discussion about rail freight costs so that policy implications can then be understood in both directions with road and rail being examined across the piece. The level of HGV subsidy makes a compelling case for supporting rail, which imposes much lower costs on society and the economy, equivalently.
Centralised system operation has provided a stable and consistent framework which has resulted in the rail freight industry having the confidence to invest over £2 billion in the past 20 years. The experience of devolution to date has been challenging for freight which makes the case for a system operation even stronger as the more the system is broken up. NR’s operations can be improved but we must learn from both the successes and mistakes of the past.
1. Ref 28 Hendy Review.
3. Addendum to MTRY 2014 report February 2015 and Heavy Goods Vehicles Do they pay for the damage they cause 2014