Memorandum from The Northern Way (FT 19)
THIS SUBMISSION
1.1 This submission to the Transport Committee's
inquiry on freight transport has been prepared by the Northern
Way. We focus on the Department for Transport's role in planning
and delivering integrated infrastructure and use of the Transport
Innovation Fund; and the role of the North's ports in sustainable
freight distribution nationally.
THE NORTHERN
WAY
1.2 The Northern Way is a Government-backed
initiative, led by the three Northern Regional Development Agencies
(North West Development Agency, One North East and Yorkshire Forward).
Our goal is to bridge the £30bn annual economic output gap
between the North and the English regional average by growing
the North's economy faster.
THE NORTHERN
WAY GROWTH
STRATEGY
1.3 Published in 2004, the Northern Way
Growth Strategy Moving Forward: The Northern Way set out how
the Northern Way seeks to bridge the output gap. The Growth Strategy
was developed to build on the North's three Regional Economic
Strategies and Regional Spatial Strategies. It highlights transport
as a priority area for transformational change. The importance
of transport to the North's economic future was reaffirmed in
the stocktake of the Northern Way's activity earlier this year
and it is now one of the three areas that are the focus of Northern
Way activity.
1.4 The Growth Strategy identified three
transport investment priorities:
— to improve surface access to
the North's airports;
— to improve access to the North's
sea ports; and
— to improve links within and
between the North's City Regions.
THE NORTHERN
TRANSPORT COMPACT
1.5 The Northern Way Steering Group established
the Northern Transport Compact to provide it with advice on transport
priorities at the pan-northern level linked to productivity and
the closing of the output gap. Chaired by Professor David Begg,
the Compact includes RDA, Regional Assembly, City Regional, and
private sector members from the North's three regions. The Compact
has led the development of the Northern Way's Transport Strategic
Direction and Priorities.
THE STRATEGIC
DIRECTION FOR
TRANSPORT
1.6 To support its September 2006 submission
to the Comprehensive Spending Review (CSR), the Northern Way developed
its Strategic Direction for Transport. This is an evidence-based
assessment of the most appropriate transport interventions that
will promote productivity gain, while at the same time seeking
to protect and enhance the North's natural and built environment,
and contributing to meeting the nation's commitments regarding
climate change. Looking over a 20 to 30 year time horizon, it
sits below the three high-level transport goals of the Growth
Strategy and above the level of individual priority schemes and
projects. The Strategic Direction sets out the types of interventions
which will have a productivity impact, as well as where in the
North those interventions will have the greatest impact. The importance
of rail freight and, in particular, the growing inter-modal market
is noted and the Strategic Direction supports the enhancement
of rail access to and from the North's principal ports.
1.7 The Strategic Direction also highlights
the finite capacity of the East Coast, West Coast and Midland
Main Lines to cater for additional passenger and freight traffic
and the need for additional capacity if the detrimental effect
on productivity growth in the North is to be avoided once these
lines reach capacity. It also highlights the need to resolve the
issue of limited rail capacity for additional freight and passenger
movements of the network in and around Central Manchester (the
so-called Manchester Hub) and the importance to the North's economy
of the trans-Pennine corridor, both for passengers and freight.
1.8 The Strategic Direction also notes the
importance to the North's economy of the movement of goods by
road. While accepting that some additional road capacity will
be required, making best use of existing capacity through behavioural
change and managing demand is at the heart of the Northern Way's
approach. As part of this, the Northern Way has expressed a willingness
to work with Government to investigate road user charging for
the strategic road network on the basis that revenues are retained
within the northern economy and it supports the North's productivity.
THE NORTHERN
WAY'S
SHORT, MEDIUM
AND LONG
TERM TRANSPORT
PRIORITIES
1.9 As part of our September 2006 CSR submission
we undertook to make a further submission to Government setting
out our short, medium and long term priorities for investment
in the North's transport system. This submission was made at the
end of March 2007. What the Northern Way's prioritisation work
shows is that while the transport proposals being pursued by stakeholders
across the North will make worthwhile contributions to productivity
growth, taken together they do not allow the Strategic Direction
to be met. Consequently, if the North's productivity growth is
to be maximised, the strategic "gaps" between what is
currently being promoted and what the Strategic Direction suggests
will be required need to be addressed. Gaps identified in the
March 2007 submission include the absence of a medium to long
term strategy for the enhancement of passenger and freight rail
links between the North and London and the South East, as well
as a long term strategy for the Manchester Hub in particular and
for the trans Pennine network as a whole. We are therefore pleased
by the Minister of State for Transport's 4th October announcement
that in response to the Northern Way's work Network Rail will
now study in detail how best to increase the number of trains
that run through the Manchester Hub.
1.10 Our Priorities work has also considered
what will be needed to enhance the North's strategic road network
(with freight traffic being a key beneficiary). We agree with
Eddington's conclusion that if road user charging is introduced
road investment priorities will change. Notwithstanding this,
with or without any charging proposals we have identified that
investment will be needed in to improve port access (A63 Castle
Street, A5036 Port of Liverpool access and A160/A180 upgrades
on the South Humber Bank), as well as for a number of proposals
targeted at addressing current congestion problems and where there
is sub-standard provision on key links in the strategic network.
1.11 Details of our Priorities were published
in September 2007.
THE NORTHERN
WAY AND
FREIGHT
1.12 Reflecting the Growth Strategy objective
to promote access to the North's sea ports, the Northern Way has
commissioned two pieces of work to develop the port-related evidence
base. These are
— Evidence Based Review of the
Growth Prospects of the Northern Ports, MDS Transmodal with Regeneris
Consulting, January 2006
This work cemented the importance of Northern
Ports for the Northern Way by assessing their economic footprint
and using established models to forecast inter-modal port throughput
in a number of scenarios. The work informed the Northern Way's
response to the Port Policy Review, as well as the development
of our Strategic Direction and Prioritisation work. It recommended
more detailed assessment of costs and benefits of gauge and capacity
enhancements for freight on the trans- Pennine rail routes and
from the North to the Midlands.
— Northern Rail Routes: Demand
Study, Steer Davies Gleave, to be published Autumn 2007.
This work is taking forward the recommendations
of the MDS Transmodal-led study and is producing demand scenarios
for inter-modal rail traffic to and from the main Northern ports
to inform Network Rail's on-going option and business case development
processes for gauge-cleared routes on the East Coast Main Line
north of Doncaster into Scotland; between Teesport and the Humber
Ports and the East and West Midlands; as well as a route across
the Pennines to the Mersey.
1.13 Our evidence demonstrates national
competitiveness and sustainable freight distribution benefits
arising from the growth of northern ports as well as benefits
for northern economic growth. We are strongly supportive of a
market-led policy approach with public sector intervention focused
particularly on priorities for surface access improvements to
northern ports.
1.14 The Northern Way with the Highway Agency
has also undertaken as a case study pre-feasibility work to assess
the degree to which active traffic management approaches can be
applied to the M62. This Route Action Plan work has demonstrated
that the benefits of such proposals can be significant, but so
is their cost. Importantly the work has also shown that the benefits
of such an approach are time-bound, and so while beneficial do
not provide a solution that is sustainable in the long term. We
are currently preparing further evidence on the impact of traffic
growth on the performance of the North's strategic road network.
THE NORTHERN
WAY "EARLY
WIN" INVESTMENTS
1.15 Through its Growth Fund, the Northern
Way is co-funding a number of early win freight-related rail projects.
These are:
— The reinstatement of the Olive
Mount Chord and gauge enhancement of the Runcorn route to the
West Coast Main Line (WCML) which will improve rail access of
the Port of Liverpool. A Productivity TIF-funded project awaiting
final approval will add a gauge-cleared route to the WCML via
Earlestown.
— Capacity enhancements on the
Hull Docks Branch Line. The Northern Way has also actively supported
wider Productivity TIF-funded proposals waiting final approval
to enhance rail access to the South Humber bank ports.
1.16 We are concerned at the time that it
is taking to consider and then approve the Productivity TIF elements,
especially considering that in the overall scale of rail expenditure
these are not major enhancements.
1.17 The Northern Way is also co-funding
Network Rail's on-going work to develop the options and business
case for gauge-cleared routes between Teesport and the Humber
Ports and the East and West Midlands, and across the Pennines
to the Mersey, to which we have already referred.
NORTHERN PORTS
1.18 The North's ports are important contributors
to accelerated growth. This is because of the direct employment
opportunities they bring, the opportunities that they create for
value-added employment along the supply chain and because of their
importance in facilitating imports and exports for the North's
businesses and industries and other parts of the UK, in a way
that is both economically efficient and more environmentally sustainable
than the southern alternatives. As well as the potential for port
growth, northern ports can also offer the physical space for port-related
developments that is not so easily achieved in the Greater South
East.
1.19 In terms of tonnes lifted, the Humber
Ports are the largest port complex in the UK and include the UK's
largest individual port at Grimsby and Immingham. The Tees ports
are the second largest in the UK and the Mersey ports are sixth.
The Northern ports are national assets. The Mersey ports are the
principal gateway for short-sea shipping to Ireland and deep sea
shipping to North America. The Tees and Humber ports are best
located to serve the Scandinavian, Baltic and North European markets.
The hinterland of the North's ports extends well beyond the North
into the Midlands and Scotland, and into the South East for some
traffic.
1.20 Together the North's ports cater for
nearly 34% of the tonnes handled at all UK ports. Over the last
decade the North's ports have grown faster than those in the South
and consequently their market share has increased (from under
30% in 1994). This growth has occurred because of a number of
factors. These include economic growth in the North, available
capacity at the northern ports and a relatively uncongested hinterland
transport network, as well as surface access congestion in the
South East. Significantly, land is also available to support expansion
of northern port capacity and related business uses and the planning
climate is conducive to their further development. These factors,
combined with growing market potential, have resulted in the northern
ports' owners bringing forward significant proposals. In recent
years, for example, Humber International Terminal 2 at Immingham
became operational in 2006, the Hull Container Terminal attained
Harbour Orders in 2005, the Port of Liverpool's deep sea facility
at Seaforth attained Orders in May 2007, and PD Teesport's proposals
for a deep-sea facility have local authority planning approval
and are awaiting the Secretary of State's decision on the Harbour
Orders. The Northern Way has identified that as well as bringing
direct and indirect economic benefits through increased employment,
there is also substantial potential for business and wider competitiveness
benefits too. This is also reflected in Department for Transport's
evidence that nearly 30% of GDP nationally derives from international
trade.
1.21 Given the importance of ports, an analysis
of the potential for unitised traffic through Northern Ports under
different scenarios was undertaken as part of the MDS Transmodal
study for the Northern Way. MDS Transmodal utilised the same forecasting
models as applied to produce the DfT forecasts for the Ports Policy
review. The Northern Way forecasts' trend scenario (in effect,
the base case) represents growth broadly in line with DfT forecasts.
However when alternative future scenarios are considered, growth
at the northern ports begins to assume different proportions of
the total market than that put forward by the DfT. In a scenario
of increasing surface access user costs around South East ports,
additional capacity at northern ports, and in due course the potential
introduction of road user charging, the North further increases
trend growth.
1.22 The modelling based on the "Trend
Plus" scenario (which assumes construction of two of the
three now approved deep sea facilities in the South East and increasing
congestion in the South East but no additional deep sea capacity
in the north) suggests that by 2020 the North could aim for a
50% increase in market share in the deep sea lo-lo market between
2003 (the base year for modelling) and 2020 and a 20% increase
in its current market share in the short sea unit load market.
The introduction of road user charging further emphasises the
growth in market share. The addition of new deep sea facilities
in the North at Liverpool and on the Tees further enhances this
pattern of growth, as would constraints in capacity in the South
East.
1.23 The key conclusions from our analysis
are that:
— In general terms measures which
increase traffic through northern ports can play an important
role in improving Britain's overall transport infrastructure,
enhancing business competitiveness nationally.
— More specifically the analysis
demonstrates the potential of the northern ports to play a crucial
role in the achievement of a more environmentally sustainable
freight distribution network nationally, by reducing total goods-vehicle
kilometres. The growth of short sea ro-ro traffic through northern
ports is likely to lead to significant reductions in HGV kilometres
on the national road network overall, reducing congestion in the
South and Midlands. This is also the case for the deep sea lo-lo
market as long as deep sea container port development is accompanied
by rail distribution inland.
We also recognise a number of potential downsides,
which need to be kept in mind:
— whilst the environmental impact
nationally is positive, overall it will lead to increased traffic
on northern road and rail networks;
— it might be also associated
by increased transport costs if this switch in traffic is associated
with road user charging. But, in these circumstances industry
would benefit from greater journey time reliability and reduced
generalised costs of freight distribution due to reduction in
congestion;
— The growth of ports will provide
economic benefits for the North.
1.24 Therefore, while we recognise that
the DfT forecasts do not seek to predetermine where growth should
be, we consider that the DfT's forecasts do not reflect adequately
constraints in the South (particularly congestion), the growth
potential of the northern ports in terms of land supply, labour
supply and their relatively uncongested surface access networks,
potential policy development such as road pricing and importantly,
the known views of the shipping industry on these issues.
THE STRATEGIC
ROAD NETWORK
1.25 oth the Eddington Transport Study and
our own work developing the Northern Way's Strategic Direction
highlight the importance of the strategic road network for the
movement of goods. As already noted, our prioritisation work highlights
the importance of three proposals to enhance strategic roads that
will directly benefit port-related goods traffic. Currently DfT's
expectation is these three schemes will be funded via Regional
Funding Allocations. Given the position that we and Eddington
have reached on such proposals and that the purpose of the productivity
Transport Innovation Fund is to support national economic growth,
we suggest that they should be considered at least for part-funding
from productivity TIF.
A RAIL STRATEGIC
FREIGHT NETWORK
1.26 The Northern Way welcomes the Government's
commitment in the Rail White Paper to develop a national Strategic
Freight Network on the basis that it will include gauge-cleared
lines and take full account of the business case work that is
being undertaken by Network Rail in association with the Northern
Way. Delivery of the Strategic Freight Network should be one of
the priorities for the Productivity Transport Innovation Fund.
1.27 Already the West Coast Main Line is
gauge-cleared to W10 and on-going work supported by the Northern
Way will link in the Port of Liverpool. Equivalent routes on the
east side of the country and across the Pennines are now needed.
The emerging findings of our market demand study is showing the
strong potential demand for inter-modal traffic from the Tees
and Humber ports to the East and West Midlands. In response to
the East Coast Main Line Route Utilisation Strategy the Northern
Way has encouraged Network Rail to investigate the creation of
a new W10 route using the Felixstowe to Nuneaton route, gauge
enhanced to connect across to the Midland Main Line at Syston
from which a gauge enhanced route to Yorkshire could be fashioned.
If this route also is to carry Haven Ports traffic, the case for
gauge enhancement currently being considered by the Northern Way
with Network Rail as a northern ports-alone issue could be very
much stronger. Our work is also contributing to Network Rail's
on-going consideration of trans-Pennine gauge enhancement options.
October 2007
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