Written evidence from Freight on Rail
(TE 70)
Freight on Rail would like to thank the Transport
Select Committee for the opportunity to respond to its inquiry
into Transport and the Economy.
SUMMARY
Freight on Rail, a partnership of the rail freight
industry, the transport trade unions and Campaign for Better Transport,
works with local and central Government to promote rail freight,
the low carbon[228],
energy-efficient safe alternative to long distance road freight
which reduces road congestion. The sustained growth of rail's
share of consumer traffic over the past seven years demonstrates
the demand for this alternative mode for trunk haul. In fact,
rail has increased market share despite a 15% reduction in consumer
imports into the UK over the past year.
As it stands a quarter of all products imported through
the SE container ports are transported by rail. For example, Thamesport
transported a quarter of its containers by rail in July 2010.
1. Have the UK's economic conditions materially
changed since the Eddington Transport Study and, if so, does this
affect the relationship between transport spending and UK economic
growth?
Eddington's conclusions on the need to reduce congestion
on inter-urban corridors and key international ports are still
as relevant today and in the foreseeable future. The importance
of rail freight's role in reducing long distance road congestion
is recognised[229].
In fact, the economic recession makes the case even stronger for
targeted interventions to stimulate the green economy.
Road congestion is claimed
to cost businesses £17 billion per annum. FTA
The Importance of Rail Freight 2008
DfT estimate the cost of congestion being £1
per lorry miles on the most congested roads.
2. What type of transport spending should
be prioritised, in the context of an overall spending reduction,
in order best to support regional and national economic growth?
Freight on Rail believes that rail freight transport
spending should be prioritized because key limited targeted interventions
for rail freight provide significant benefits for society and
the economy and are in line with Coalition's Programme for Government
commitment to make the transport sector greener, more sustainable
and reduce carbon dioxide emissions.
Rail freight links are an important driver of economic
regeneration. The latest Network Rail research shows that the
British economy is boosted to the tune of £870 million by
the rail freight industry which further supports indirectly an
economic output of £5.9 billion over six times its direct
turnover.
For example, it is recognised that investments which
relieve bottlenecks on the rail network can have huge benefits
in productivity for existing rail freight and passenger services
which benefit the economy. Reduced journey times reduce train
running costs and decrease the amount of capital that is tied
up in the form of goods in transit. Upgrades improve reliability
which key to customers as delays can halt production or construction
as well as deterring the customer from choosing rail in future.
CASE FOR
THE STRATEGIC
RAIL FREIGHT
NETWORK
Building a robust reliable rail network with diversionary
routes, as defined in the Strategic (Rail) Freight Network (SFN)
vision, are crucial if rail freight volumes are to increase.
The SFN will provide a reliable robust strategic
network with diversionary routes to cater for the growth in intermodal
rail freight which will connect national major freight routes,
including links to the ports. To start realising the benefits
of the SFN, the previous Government committed £200 million
to start building the network. However, these schemes which have
attracted third party funding commitment and were part of the
Government High Level Output Statement (HLOS) are now awaiting
the outcome of the Comprehensive Spending Review. We urge the
Coalition Government to retain these upgrades so that rail freight
can provide the low carbon energy efficient alternative long distance
freight mode the country needs.
The rail freight industry has invested more than
£1.5 billion in the industry in the past ten years and
needs these Government interventions to give it the confidence
to invest longer term. An example of improved productivity to
be gained from upgrade schemes in the SFN project would be to
cater for 775 metre trains on the network which would allow better
asset usage (sweating).
CONSUMER RAIL
FREIGHT HAS
GROWN AND
INCREASED MARKET
SHARE DESPITE
THE RECESSION
In the last year, the share of consumer freight transported
by rail has increased by 6.5%[230],
representing the seventh consecutive year of growth, which means
that container traffic is larger than coal now. Industry experts
have demonstrated that with the correct support consumer rail
freight can increase five-fold in the next 20 years.
EXAMPLES OF
SERVICES IN
KEY EMERGING
CONSUMER MARKET
The intermodal service run by DB Schenker for Stobart
which commenced in Autumn 2009 carrying refrigerated fresh produce
from Spain to the UK is the longest rail freight service in Europe
under the operation and direct control of a single operator. This
service has 30 intermodal reefer boxes and avoids 13.7 million
road kms per annum between Spain and the UK and reduces CO2
emissions by 8,625 tonnes per annum.
DB Schenker started a direct train service linking
the Midlands with Italy at the beginning of June 2010. The flow
from Birmingham to Padova in Northern Italy builds upon existing
twice weekly DB Schenker services which take only 42 hours via
the Channel Tunnel with customers ranging from retailers, food
producers and manufacturing. The train provides customers with
a saving of at least 24 hours over traditional road haulage.
Direct Rail Services have relaunched a five day
supermarket service for WH Malcolms with each daily train hauling
up to 26 containers. It is estimated that CO2 savings
of 12,000 tonnes per year will be made. This equates to removing
over 13,000 lorry journeys off the road network between Daventry
and Mossend.
REVENUE GRANTS
- MODE SHIFT
REVENUE SUPPORT
(MSRS)
It is crucial that revenue grant budget is retained
at existing levels as these grants underpin existing business
without which this traffic would be forced back onto the roads
with the resulting increased road congestion, increased emissions
and exposure to accidents. In England and Wales, the budget has
been confirmed until March 2012. However, a longer period of certainty
is needed for customers to have confidence to sign contracts.
In particular, these grants are key for the new emerging
domestic intermodal traffic which is a very competitive market,
(partly because of the cost of the two road legs involved). The
increase in market share of consumer rail freight, both deep sea
and domestic intermodal traffic, demonstrates the demand for these
services. The grants system is designed to recognise the advantages
to the economy of reducing long distance road freight congestion
as well as the social and environmental advantages of rail freight.
The rail freight industry has been actively working to reduce
its dependence on grant support over the past five years and will
continue to do so. Grants are only awarded and paid for actual
lorry miles taken off the roads.
THE ROLE
OF GRANTS
IN SUPPORTING
SUSTAINABLE FREIGHT
MOVEMENTS
Capital grants
The capital Freight Facilities Grants, which were
suspended in July 2010, pending the CSR, are important to offset
the initial start-up costs of the transfer to rail and in the
context of future business.
NEED FOR
24/7 RAILWAY
In order to offer full services to customers, 24/7
railway is needed, especially for emerging new retail business.
The logistics industry needs to be able to access the rail network
on Sundays which is often not possible at present. This approach
is in line with the Coalition Government's aim to improve asset
utilisation.
EXAMPLE OF
A SMALL
ENHANCEMENT WHICH
WOULD YIELD
SIGNIFICANT BENEFITS
Access from HS1 to London riverside terminals is
crucial to expand international services for key markets such
premium freight. This is an example of a small project which would
provide a big win.
Financial analysis showed a favourable scenario for
the Southampton to West Midlands gauge enhancements with the £70.7
million project below having a Net Present value of £376 million.
The Seeda led Impacte gauge enhancements project with partners
AWM, ABP, Network Rail (NR), European funding;
Through limited targeted Government support for rail
freight, combined with third party funding it has been possible
to implement significant and crucial upgrades to the rail network
which are allowing the rail freight industry to expand services
to customers and shift long distance freight onto the railways
to relieve road congestion and reduce emissions.
The Transport Innovation Funding Productivity Fund
TIF is an example of Government support which has brought in third
party funding to upgrade the rail freight network to make it more
efficient.
HUMBER PORTS
UPGRADES AN
EXAMPLE OF
PARTNERSHIP OF
PUBLIC AND
PRIVATE SECTOR
Northern Way, a consortium of different authorities
worked with Network Rail & ABP. The Hull Docks Branch upgrade
- increases trains from 12 to 22 per day. (£15.5 million)
on the Hull docks branch and improvements in network resilience
with the re-opening of the Brigg Line for freight services.
VALUE OF
LOGISITICS SECTOR
How valuable are logistics jobs?
| Dispatch clerks, warehouse pickers
| £300 pw | |
| HGV/truck operatives | £350 pw
| |
| Supervisory | £400 pw |
|
| Call centre operators | £278 pw
| |
Main logistics positions needs skills including IT.
Source: Midlands Logistics Study MDS Transmodal Regeneris
2005.
Daventry Rail Freight Interchange Northampton on a site of 160
hectares employs 2,595 employees which equates to 14.4 employees
per hectare.
Analysis of data by Network Rail[231]
shows that rail freight generates almost double the national average
output per employee. This reflects the high productivity and physical
capability of the industry.
3 How should the balance between revenue and capital expenditure
be altered?
Freight on Rail believes that there should be more flexibility
between capital and revenue funding so that funds can be transferred
between capital and revenue budgets, where appropriate.
4 Are the current methods for assessing proposed transport
schemes satisfactory?
No, appraisal should ensure that all external costs of the different
freight modes are fully internalised which is not the case currently
with NATA, the model used by the DfT. There should also be a consistent
model used across Government departments.
5. How will schemes be planned in the absence of regional
bodies and following the revocation and abolition of regional
spatial strategies?
NEED FOR
STRATEGIC SPATIAL
PLANNING
As it stands, there are tensions between the Localism agenda
and economic growth which need to be addressed in the Localism
Bill.
We believe some form of strategic sub-national transport planning,
in addition to local and national spatial planning is needed if
the Coalition Government is to meet its commitments to reduce
carbon dioxide emissions and build a green economy. Unless strategic
planning structures are put in place it will remain difficult
to get planning permission, for a wide range of schemes to help
regenerate the economy including medium sized wind farms and rail
freight terminals, if the schemes are opposed locally. This level
of transport planning is needed to give confidence to investors,
infrastructure providers, community initiatives, transport operators,
developers and local enterprises
Transport projects are rarely confined to local authority boundaries
which means that without a larger than local spatial planning
structure it will be difficult to plan key infrastructure projects
which cross local authority boundaries This could result in projects,
ranging from, medium-sized and small rail freight terminals and
wind farms not being granted planning permission, because of local
opposition, even though there are wider benefits to society of
these schemes.
RAIL FREIGHT
NEEDS PLANNING
PERMISSION FOR
A NETWORK
OF TERMINALS
IF VOLUMES
ARE TO
INCREASE
A supportive spatial planning framework is needed if rail freight
is to play its role in reducing freight's emissions; rail freight
needs approval for a network of terminals, situated in the right
places to meet market requirements.
Major infrastructure projects such as large Strategic Rail Freight
Interchanges (SRFIs) will, in the longer term, be addressed through
the Major Infrastructure Unit (MIU) which will replace the Independent
Planning Commission. However, the threshold for schemes being
considered by the MIU is 60 hectares and the majority of rail/road
transfer stations are not of this scale. So we believe that the
planning framework needs to recognise the importance of getting
planning permission for medium-sized and small rail freight terminals
without which freight cannot be shifted to rail and all the economic,
social and environmental benefits to society cannot be realised.
Currently, with the abolition of the RSSs, there is a planning
vacuum as there is neither national or sub national policy with
only local plans, (which everybody recognises are crucial), in
place.
NEED FOR
THE NATIONAL
PLANNING FRAMEWORK
TO TALK
FULL ACCOUNT
OF RAIL
FREIGHT.
(a) the need for a network of terminals;
(b) Strategic Rail Freight Network should be part of framework;
(c) Existing safeguarding transport lands policies in PPG13
need to be incorporated in new Framework so that rail alignments
and suitable sites for terminals and interchanges can be protected
by local authorities in Local Plans. There is already a shortage
of suitable sites beside the railway, which could be lost for
ever without this level of protection.
NATIONAL POLICY
STATEMENT FOR
NATIONAL NETWORKS
(a) Needs to define the need for Strategic Rail Freight Interchanges
and medium-sized and small terminals.
(b) Recognise the role of rail freight in servicing the economy
in a sustainable safe[232]
way.
(c) Interchanges should only be given planning permission
if they are capable of being rail served to help the Coalition
Government meet its climate change targets.
(d) Need to be able to protect key national rail corridors,
both existing and former for future possible rail use.
SUB-NATIONAL
PLANNING AND
LOCAL ENTERPRISE
PARTNERSHIPS
The economic regeneration benefits of rail freight investment
have previously been widely recognised by local and regional authorities
so it is critical that Local Enterprise Partnerships (LEPs) have
a framework to support and fund transport schemes
Freight on Rail believes that Local Enterprise Partnerships could
be well placed to develop additional transport schemes of this
nature to expand the rail freight network as long as they are
set up taking into account certain criteria. RDAs were very effective
in bringing together public and private finance and forming partnerships
to fund projects which is a role that is hugely important and
needs to be replicated in LEPs which need to:
(a) To cover a sufficiently large geographical area to be
viable for developing transport projects.
(b) To have access to funding for rail freight schemes which
regenerate the local economy and relieve bottlenecks on the route
from Felixstowe to Nuneaton eg the Ipswich Chord supported by
Suffolk County Council.
(c) As well as local authorities and private business, LEPs
should include environmental groups, community amenity groups
and trade unions.
(d) Some form of sub-national strategic planning is needed
for economic growth because strategic transport decisions, which
affect several regions, cannot be dictated solely by local decisions
if sustainable economic regeneration is to take place.
(e) Clarity is needed on what the duty to co-operate requirement
for local authorities means in terms of output and participation.
EXAMPLES OF
PARTNERSHIP WORKING
AT LOCAL,
SUB-NATIONAL
AND NATIONAL
LEVELS WHICH
HAVE BEEN
AND WILL
CONTINUE TO
BE A
CRUCIAL PART
OF REALIZING
TRANSPORT PROJECTS
- Access to Liverpool Port supported by TIF funding, Merseytravel,
NR, Northern Way/ERDF/consortium of six authorities LTP funding
for Olive Mount Chord.
- Kilbridge Group has taken over the Keypoint Swindon Rail Freight
terminal and invested in improved road access to allow cars from
the neighbouring Honda manufacturing plant to access the terminal
directly from the factory
http://www.kilbridegroup.com/docs/case-studies.asp Swindon Keypoint
rail freight terminal.
September 2010
228
Rail freight produces 70% less CO2 emissions than the
equivalent long distance road journey DfT Logistics Perspective
December 2008. Back
229
An average freight train can remove 50 long distance HGVs journeys
from our roads - Network Rail 2010. Back
230
Rail freight has increased its market share in deep sea traffic243
by 12% - ORR Rail trends February 2010 Q3 2009-10 on q3 in 2008-09
despite the fact imports over the quay have reduced by 10-20%. Back
231
National Input-Output table 2007 Office of National Statistics
in Value of Rail Freight July 2010. Back
232
Rail freight is safer than road freight on major roads as HGVs
are over three times more likely to be involved in fatal accidents
than cars due to a combination of size, lack of proper enforcement
of drivers hours, vehicle overloading and differing foreign operating
standards. Source: Road Statistics 2008, Tables 3.2 and
3.6, Road Freight Statistics 2008 Section 5, DfT. Back
| 
