Memorandum by Combined Transport Limited
(CHT 11)
1. WHO WE
ARE:
Combined Transport Limited (CTL) is a wagon
operating company moving canvas sided swap-bodies and steel containers
as unitized cargo for a number of different Freight Forwarding
customers. We contract with railway operators: English, Welsh
and Scottish Railway, SNCF, and Trenitalia to provide through
timetables and locomotives to haul our wagon sets between nominated
UK and Continental rail terminals. Our services commenced in the
summer of 1994 and grew slowly year-by-year despite experiencing
a Channel Tunnel fire, blockades of facilities, floods in Northern
Italy and numerous railway strikes.
2.1 THE DISRUPTION:
The Committee will already be aware of the measures
of fines that were introduced in 2001 under the "Extension
of the Civil Penalty to Rail Freight Wagons" by the Home
Office Immigration and Nationality Directorate. We had been provided
with a Consultation Paper in the autumn of 2000. The industry's
general response was that a fine of £2,000 per head was not
a positive solution to the growing problem of illegal immigrants
attempting to enter the UK from across the Channel. Nevertheless
reasoned arguments for alternative measures appeared to have been
disregarded and the Home Office proceeded with their plans. Letters
of protest to Ministers in office at the time brought no satisfactory
answers to indicate they shared the concerns of the rail freight
industry and furthermore such measures would do nothing to help
the Government policy in getting more freight onto rail. However
later in 2001 the imposition of fines was suspended with the problem
of "asylum seekers" and the imposition of fines being
totally ineffective.
2.2 CALAIS-FRÉTHUN
On 6 November SNCF suddenly stopped all UK bound
trains for Health & Safety reasons. French Customs have their
frontier post at Fréthun Freight terminal where a change
of National locomotives takes place. Stationary trains were now
being invaded, en mass, by several hundred asylum seekers.
2.3 REVISED SERVICE
CONTINGENCIES
A reduction in active train paths and a revised
timetable were imposed by SNCF to meet the limited "time
window" for trains to proceed from Calais to the UK. This
had the immediate affect of significantly reducing the level of
business we were able to maintain. In order to assist the railway
operating companies we suspended our Paris service on 3 December
so that our wagon resources could be concentrated on the more
profitable services to and from terminals in the Milan area.
2.4 CTL'S WAGON
FLEET COSTS.
These disruptions seriously affect our wagon
flows. Wagons are our sole working asset with a large majority
on long term rental contracts. We are operating and having to
maintain (for Railway Health and Safety) far more wagons that
we need under these service restrictions. Although we have, wherever
possible, returned some in an attempt to reduce our wagon fleet
maintenance and rental costs the overall affect is a significant
decline in our financial results and place our long term viability
into question
2.5 RAIL SERVICES
BEING ABANDONED
BY THE
FREIGHT MARKET
A service operator needs to maintain a reliable
product to satisfy the needs of its customers. The affect of these
restrictions is for customers to seek alternative means of transporting
their goods. Many of our customers have reverted to road haulage.
This has meant that gradually our bookings have decreased to the
level needed to meet the rail journeys we were allowed to operate
but since the restrictions have continued far longer than anyone
could reasonably expect we now find ourselves being unable to
find the traffic to fill the services we are permitted to operate.
Some customers have openly written to us advising they will never
use rail services ever again. If a solution is ever reached it
will take many years of highly reliable rail services to persuade,
not only these, but to attract new customers.
2.6 EUROPEAN
LAW
It is essential for businesses to be masters
of their own destiny and be in control of the basics that govern
their profitability. The Treaty of Rome intended for trade to
move freely between the countries that form the European Community.
However this has hardly been the case for us since 6 November
2001 and there is no visible evidence that this prevailing situation
is likely to change in the immediate future. There is a case for
the French and British Government to answer in the Strasbourg
Courts under European Law on Human Rights for failing to allow
trade on this route to move freely.
2.7 CTL'S COST
CONTROLS
Naturally we have taken cost cutting measures.
1. Off-hiring some wagons rented on short
term leases.
2. Moving our London office to cheaper and
smaller premises.
3. Closing local rail terminal offices in
Scotland and London, Willesden.
4. Significant reductions in staff by redundancies
(43%).
5. Naturally wherever possible overheads
are being kept to a minimum. With the significant decrease in
income our trading position is extremely precarious and continues
to give us cause for alarm.
2.8 THE POSSIBLE
FUTURE OF
RAIL FREIGHT
THROUGH THE
CHANNEL TUNNEL
To allow a company such as ours to go out of
business will not mean that once these restrictions in Calais
are lifted there are likely to be other companies ready to take
our place or that we can reform and re-emerge. From our knowledge
of the market it will be many years with or without Government
incentives before any similar services emerge. The British Government's
policy to get more freight onto rail is affected by these current
measures because much of our traffic and that of our competitors
are moving by road.
2.9 WHAT
DOES THE
FUTURE HOLD
FOR CTL
Last year we began planning an auxiliary service
to accommodate traffic that had either limited access or was unable
travel through the Channel Tunnel. The subsequent events in Calais
now mean that we can add to this new route traffic intended for
our Channel Tunnel services. This is subject to our customers
being satisfied in accepting a longer transit time between Manchester
and continental rail terminals by our using ferry services operating
between Purfleet and Zeebrugge. In June 2002 we intend to launch
such a service.
3 THE IMPACT
ON SUPPLIERS
3.1 Railway Operators
There must have been significant impact on the
services provided by the National railway companies in France
and Italy; not least of the increased cost in security by SNCF
in Calais—Fréthun. Our concern is the viability of
the International division of the UK private operator English,
Welsh and Scottish Railway Ltd. We are confident they will produce
their own paper for the Sub-Committee.
3.2 UK Terminal Operators
As a result of service disruptions in Calais
the operator for the Hams Hall terminal in the Midlands, Parsec
of Europe Ltd., gave their intention to dispose of their terminal.
Hams Hall facilities have since been acquired by ABP Connect and
it is hoped they will wish these facilities to be used for international
rail business. Another terminal in the Midlands, operated by Tibbett
& Britten at Daventry, is being continuously monitored and
reviewed by the operator. They too will probably present their
situation to the sub-committee.
4 THE IMPACT
ON CUSTOMERS
Several customers have actually written declaring
their intentions never to use rail transport. Some of these have
lost contracts with Supermarket customers, not just for rail but
all traffic worldwide. We have learned that some of these decisions
not to use rail have been based on their receiving instructions
from their own clients. Many thousands of tons of cargo have been
destroyed because of damage beyond economical use. In the case
of foods stuffs whole consignments have to be destroyed having
been contaminated by human waste and in violation of the Food
Safety Act. Customers are continually taking out of service units
damaged by illegal immigrants thereby disrupting their traffic
flows and subsequently their margins. Insurance premiums are being
affected by these losses. In recent months the level of damage
has worsened as it appears there have been many incidents of gratuitous
damage.
June 2002
Annex
REDUCTION C.T.L. WAGON FLEET
NB.
Today's fleet: all wagons are long-term lease contracts.
We continue to seek further reductions with the help of the Lessor.
CTL CONTRACTED TRAINS—CANCELLED
For the period covering 6 November 2001 through to 30 April
2002
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