Memorandum from the Railfreight Interchange
Investment Group (RIIG) (FT 12)
The Railfreight Interchange Group (RIIG), a
consortium of leading property developers (Burford, Helios, Kilbride,
ProLogis and Shell) seeking to facilitate modal shift for freight
traffic, through creation of Strategic Rail Freight Interchanges.
1. The arrival of the new administration
in 1997 was followed by a number of major policy proposals by
Government, not least the publication of Sustainable Distribution—A
Strategy in 1999. For the first time, Government acknowledged
the importance of the distribution industry to the wider UK economy
and international trade, recognised that distribution is a significant
sector of the economy in its own right, and applauded the UK distribution
industry as being one of the most efficient in the world.
2. Sustainable Distribution also set out
the commercial, operational and environmental challenges facing
the industry and its customers, and proposed a raft of strategic
initiatives to improve the sustainability of the industry in the
post-Kyoto global economy.
3. Included in these initiatives were proposals
to encourage greater modal shift of freight traffic from road
to rail through transport and planning policy, and to develop
a national policy on major freight interchanges, which recognised
not only the importance of such facilities in distribution, but
also the difficulty in securing their development.
4. Alongside Sustainable Distribution, the
creation by the new administration of the Strategic Rail Authority
finally saw a Government champion for rail freight, which was
prepared to engage with industry, liaise with other Government
departments and agencies and create an overall strategy for achieving
rail freight growth.
5. As major suppliers of distribution facilities
across Europe, we felt as others in the industry did at the time,
that Government had finally woken up to distribution.
6. Yet in the years that followed this pioneering
strategy document, much of the positive proposals have become
watered-down or dissolved completely. The constant departmental
changes over this time (DTp, DETR, DTLR, DfT) and the rise and
fall of the SRA, reflects the Government's struggle in recent
years to deal with distribution issues in particular, and their
inter-relationship with transport and land-use planning in general.
7. In responding to the Transport Committee's
examination of how successfully the Department is fulfilling its
responsibility to facilitate free movement of goods while limiting
harmful impacts, our fundamental concern remains the lack of co-ordination
between Government departments on freight matters, not only between
DCLG and DfT but also with others such as BERR or DEFRA.
8. In terms of specific responses to the
questions raised by the Transport Committee, we make the following
observations:
A. Is the Department's investment in logistics
programmes—including the Sustainable Distribution Fund—good
value for money and meeting the objectives?
9. Sustainable Distribution noted that the
distribution industry accounts for nearly 10% of GDP and was valued
in 1999 at £55 billion per annum. It also acknowledged the
dominance of road haulage in distribution and its associated environmental
impacts. The Eddington Report has since further highlighted the
various impacts to UK plc and society of this dependence on road-based
distribution, and how urgent action is needed in the transport
sector to address inter alia increasing road congestion and climate
change.
10. Against this background, an annual budget
allocation for DfT of £31 million for freight programmes
is woefully inadequate against the scale of distribution activity
in the UK and the challenges that both Government and industry
are seeking to respond to. To further set this in context, the
Department's annual budget allocation represents the amount that
a developer might typically spend on infrastructure costs for
a single distribution development.
11. This lack of resources is reflected
in other areas of the Department's work, where the proposed budget
of £200 million for creation of a Strategic Freight Network
(announced in the recent Rail White Paper), is again less than
the total amount that a developer would typically invest in a
single Strategic Rail Freight Interchange. We would welcome the
Transport Committee's views on how the DfT's budget compares with
those of other Western economies.
12. Whilst the Department is to be applauded
for its work in trying to promote best practice in the freight
industry and for using its limited resources to help promote sustainable
distribution where it can (eg modal shift grants), the lack of
an integrated freight strategy for DfT, or any real integration
between Departments on development of freight policy, means that
current efforts do little more than scratch the surface.
13. In parallel, and of equal frustration,
is the inability of the private sector to commit investment in
new distribution infrastructure, due to the vagaries of the planning
process, which in some cases run counter to the objectives of
transport policy.
B. International distribution patterns involving
air freight increase carbon dioxide by up to 30 times that of
sea transport—what more can be done to promote modal shift
from road and air freight to inland waterway, shipping and rail?
How can the Government encourage and incentivise further efficiency
improvements?
14. In creating conditions favourable to
alternative modes to road haulage, there is a balance to be struck
between "push" and "pull" incentives, whether
by on the one hand increasing the relative costs of road haulage
(eg road pricing, fuel duty, driver hour restrictions) and/or
by reducing the relative costs of other modes (eg rail access
charges, longer/bigger freight trains).
15. We maintain constant dialogue with major
distribution operators and their customers, such as leading retailers,
as well as with the rail and ports industry. Their undoubted desire
to increase use of rail is not constrained by lack of freight
grants, more by a lack of capability, whether for freight train
paths, train length or loading gauge, or by a lack of suitable
interchange facilities. Getting the customers closer to the rail
network, to remove the intermediate road haulage and double-handling
which exists at present, is seen as far more important than securing
subsidies to mask otherwise inefficient operations.
16. Therefore, instead of "tinkering
around the edges" with a constrained budget for promoting
modal shift, our preference would be for the Department to focus
on creating a suitable strategic network capability for other
modes such as rail, which could then link mainland Europe and
major ports of entry with inland interchanges.
17. As noted earlier, the allocation of
£200 million to the Department to create a Strategic Freight
Network simply will not provide the required network capability
required by industry to achieve a step-change in modal shift to
rail, whether in capacity, train length or loading gauge.
18. Furthermore, the Department is constrained
in its ability to help the private sector make its own contribution,
in terms of developing a network of ports and major inland interchanges
to connect to this Strategic Freight Network. We have over £2
billion ready to commit to new interchanges, but the considerable
costs, lead time and risks which we face through the planning
system means that this investment is itself being constrained
and delayed. If Government is serious in its policy objectives
for rail freight, we would greatly welcome the Department being
given greater responsibility and authority to support new private-sector
port and interchange development.
C. Air freight in the South-East is forecast
to grow from 2.2 million tonnes a year in 2003 to 14 million tonnes
by 2030. Has the Department adequately planned for the capacity
and access implications of this very significant growth? How will
transport networks need to adjust to serve the growing air freight
market?
19. It is unclear how far the Department
has looked to rail as an alternative to air transport in the intra-European
and domestic context, or as a complementary mode of transport
to link in with global air freight to and from major UK airports.
In recent years rail has provided express freight services able
to operate at speeds of up to 110 mph, and the French postal service
operates its own dedicated fleet of high-speed freight trains,
derived from TGV technology, at speeds of up to 170 mph.
20. We have yet to identify any signs of
interest or vision from the Department in developing better integrated
air-rail connectivity for freight. Indeed, the failure of the
proposed major rail freight interchange at Colnbrook to secure
planning permission in 2001 (the "LIFE" scheme) is in
stark contrast to the subsequent permission given to Heathrow
Terminal 5 and the World Cargo Centre, the latter entirely without
any provision for the level of rail freight access that LIFE was
seeking to provide.
21. Should the Department have more
responsibility for planning and delivering integrated infrastructure
which might promote "free movement of goods"? How is
this to be balanced with the Department's other commitments? What
should be the priorities for the Transport Innovation Fund productivity
stream?
22. Creation of a strategic infrastructure
network for freight would, in our view, achieve a greater step-change
in modal shift, than the current fragmented approach towards Government
support for capital investment and operating subsidies.
23. We believe that the Department should
be given more responsibility to not only develop an integrated,
over-arching strategy for freight infrastructure, but then to
drive its implementation through Government delivery agencies
(eg the Highways Agency and Network Rail), and to support private
sector investment in complementary infrastructure, whether in
new ports, interchanges, toll roads or railway lines.
24. The Department should be tasked with
co-ordinating with other Departments and agencies (not least DCLG)
to ensure that such a strategic freight network, whether funded
by public and/or private sectors, is acknowledged across Departments
as being of national importance within transport and planning
policy, to help speed up implementation and investment.
25. In terms of the Department's other commitments,
we believe that creation of a national, multimodal strategic freight
network should take priority over initiatives such as freight
grants, and if necessary transfer funding from such programmes.
In this regard, the Transport Innovation Fund (TIF) has been a
welcome source of funding for new rail freight infrastructure
projects, and could be used as the focus for investment in this
strategic freight network.
D. How successfully has the Government influenced
European negotiations regarding freight operations? How could
the Government help to ensure a level playing field between UK
and overseas freight companies?
26. There is no apparent evidence that the
Government has had a significant influence on European freight
operations, in particular to secure full interoperability with
the mainland European rail network. Despite being one of Europe's
largest economies, the UK rail network remains unable to carry
high-cube swap bodies and piggyback trailers that can be carried
across the rest of the mainland, due to the height (rather than
width) restrictions of the UK rail loading gauge.
27. Again there is no evidence that the
Government has sought to engage with or seek support from the
European Commission to address this obstacle, which would permit
a step-change in rail's addressable market. Instead, the UK has
sought a derogation from European standards on railway interoperability,
impacting on modal shift and connectivity with the mainland, placing
the UK at a continued disadvantage for trade and inward investment.
E. How effective are the Freight Quality
Partnerships in improving the local experience of freight and
deliveries? Are the restrictions on night-time deliveries still
appropriate? What impact would weakening the restrictions have
on quality of life and other factors?
28. We believe that suitably resourced and
managed, FQPs can help bridge the gap between public and private
sectors, in promoting greater understanding of respective roles
and constraints and achieving joint solutions. Indeed our major
interchange projects include specific provision to contribute
to local FQPs, in some cases beyond their existing budget allocations,
to help integrate these new schemes into the local environment
and achieve their objectives to promote sustainable distribution.
29. In terms of night-time deliveries, we
believe it is time for a more pragmatic view, which not only reflects
the improvements in vehicle technology, but also the significant
benefits to distribution in particular, and the road network in
general, which could be achieved by allowing more out-of-hours
deliveries, particularly for premises with delivery facilities
suitably screened from residential property. We believe it should
be possible to achieve a balance between the type of vehicles
permitted to deliver at night (eg smaller/low-noise/alternative-fuelled)
and the hours and locations when such vehicles could operate.
F. How can the road safety record of haulage
vehicles be improved?
30. Whilst we have no particular strength
of opinion on this issue, suffice to say that improved enforcement
(particularly on foreign vehicles) and training measures would
help in this regard.
CONCLUDING REMARKS
31. Whilst Sustainable Distribution represented
a laudable attempt by Government to move towards an integrated
freight strategy, a new strategy is needed, which builds on Sustainable
Distribution, addresses the issues raised by the recent Stern,
Barker and Eddington reviews, and co-ordinates within and between
Departments, to provide a clear vision and implementation strategy.
32. This new integrated approach should
create a partnership between Government and industry, where Government
provides leadership with a clear vision and direction for freight
transport, backed by a properly-funded strategic national transport
infrastructure network, to which industry can then respond by
providing suitable access to this network through interchange
facilities, and exploiting the opportunities for new multimodal
transport services between these nodes across the national network.
October 2007
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