Investing in the railway - Transport Contents

6  Freight

53. The amount of freight transported by rail has grown by 70% in the last twenty years, generating more than £1.5 billion a year in economic benefits for the UK.[186] Rail freight takes the equivalent of 7.6 million lorry journeys off our roads each year with potential for growth and further modal shift.[187] The Rail Freight Group (RFG) stated in written evidence that the sector had received "significant investment" in recent control periods through the Strategic Freight Network and Transport Innovation Fund. The RFG viewed this investment as "a strong sign of Government's support for the rail freight sector".[188] Other witnesses were less enthusiastic. Lindsay Durham, Head of Rail Strategy at Freightliner, stated that the Government's support was "fairly low-key".[189] In her oral evidence, Maggie Simpson, Executive Director of the Rail Freight Group, said that there was high-level support from the Government in principle for rail freight, but that this was not matched by resources or commitment within the Department.[190] John Smith, Managing Director, GB Railfreight, told us that "the rhetoric is certainly there, but the intelligent, pragmatic understanding of what is then needed is sadly lacking".[191] As a result, he cautioned that freight could get marginalised as the Department was "almost writing timetables [for passenger rail] that the infrastructure cannot support".[192] As a result, we heard, freight was viewed as "an inconvenient side-effect".[193] The Secretary of State told us he was "disappointed and sorry" about the feelings of the freight sector.[194]

54. While welcoming the freight-specific investments on the network, Freightliner's written evidence argued that the investment was "still small in comparison to passenger investment".[195] Freightliner argued that, at most, the freight investment accounted for just 3.2% of the enhancements fund, while freight trains account for 7.5% of all train miles on the network.[196] Nigel Jones, Head of Planning at DB Schenker and the freight representative for the Rail Delivery Group, cautioned about separating the funding for freight-specific enhancements from the work on the network as whole. He argued that while the freight-specific funding appeared "relatively small […] the vast majority of general network investment and enhancement benefits rail freight as much as it benefits passengers", noting station enhancements as the only improvement specific to passenger rail.[197] Mr Jones also said that to gain maximum benefit from freight-specific investment it needed to be implemented alongside the investment on the rest of the network. As an example he cited the need for coordination between the investment on the freight route from Felixstowe and the Midland Main Line.[198] Dr Lamonte argued that freight had "played second-fiddle to passenger services for so long", and called for freight to be treated as a priority when considering investment in trans-Pennine links.[199] Councillor Chris Shaw, Leader, North East Lincolnshire Council noted that while most UK-manufactured cars are exported through Grimsby, "none of them" travelled to the port by rail.[200] Cllr Shaw also told us that all trains coming out of Immingham docks had to go through a junction "still operated by semaphore signalling".[201]

55. We heard that the freight operators had been working far more closely with Network Rail through the Rail Delivery Group, delivering "big improvements in performance".[202] The ORR reported that when it had consulted the freight sector on Network Rail's performance, it had been "very supportive" of Network Rail.[203] In turn, we heard that the freight operators had made progress in releasing unused train paths.[204]

56. We have already noted the concerns of the freight companies over the proposed increases to track access charges. While the increases were less than originally proposed, we heard the charges have still increased by 17% during the time that road fuel duty—the main charge paid by road hauliers—had been frozen.[205] Furthermore, our witnesses argued that it was not just the increases that had affected rail freight, but also the complexity and lack of long-term certainty over the access charges, compared to fuel duty. Maggie Simpson described the system as a "hugely complicated beast", noting that "the spreadsheet of track access charges has 4,000 entries for freight".[206] In addition, the current system was set up, we heard, without an incentive for Network Rail to take measures such as investing in higher-quality track—which reduces damage to the track, allowing for a reduction in track access charges and benefits for all track users.[207]

57. Our witnesses also highlighted the obstacles to wider electrification of freight lines. We heard that there is, at present, no high-powered electric freight locomotive suitable for the UK available.[208] Freightliner said that a large order of electric locomotives would be required to make the cost of designing and testing a new electric locomotive affordable. Such an order would, Freightliner suggested "require a step change in the electrification of the UK network to either be in place or committed".[209] GB Railfreight has called for Network Rail to "prioritise the right schemes to encourage freight operators to invest in electric locomotives now", arguing that while the electric spine will be useful in the medium term, there are routes for which electrification would have a more significant impact in the short term. GB Railfreight identified these routes as Nuneaton to Hams Hall and Felixstowe to Ipswich, and for CP6, Ipswich to Nuneaton via Ely.[210]

58. A further issue with freight rolling stock is that the non-road mobile machinery European Directive requires any new locomotives purchased after 14 December to meet emission standards IIIb—for which there are no compliant locomotives suitable for UK gauges. The Rail Freight Group warned that "it is difficult to see how manufacturers will respond to this given the small UK market".[211]

59. Our witnesses were clear that delivering a modal shift from road to rail for freight would require a supportive Government policy: through grants, or certainty about access charges.[212] Lindsay Durham, Head of Rail Strategy, Freightliner Group, told us that none of the freight sector's customers would "choose to use rail freight just for the environmental benefits", stating it was a prerequisite that rail freight had to match or better road freight on price.[213] The Secretary of State confirmed that the Department was looking at road and rail freight together, but added that he was "not sure" if there was "a grand central plan as such".[214]

60. Rail freight is a crucial part of our economy, and its needs must be balanced against that of passenger rail. The Government should produce a freight strategy, considering road and rail freight together, to ensure a coherent and fair policy. It must also set out and consult on the practical steps required to achieve its strategic outcomes, including the modal shift from road to rail and the decarbonisation of freight transport. We believe the Office of Rail Regulation must consult on the track access charging regime with a view to reducing the current complexity.

186   Rail Delivery Group, Keeping the lights on and the traffic moving (May 2014), pp 4-5 Back

187   Rail Delivery Group, Keeping the lights on and the traffic moving(May 2014), p 4; Freightliner Group (IRW0038); >Campaign for Better Transport (IRW0037) para 2.4 Back

188   Rail Freight Group (IRW0006) para 3 Back

189   Q387 Back

190   Q389 Back

191   Q409 Back

192   Q409 Back

193   Q389 Back

194   Q465 Back

195   Freightliner (IRW 38) para 23 Back

196   Freightliner Group (IRW 38) para 24 Back

197   Q53 Back

198   Q53 Back

199   Q236 Back

200   Q237 Back

201   Q265 Back

202   Q99 Back

203   Q182 Back

204   Q185 Back

205   Q388 Back

206   Q398 Back

207   Q407 Back

208   Q421 [Lindsay Durham] Back

209   Rail Freight Group (IRW0006), para 29 Back

210   GB Railfreight (IRW0014) para 3.6 Back

211   Rail Freight Group (IRW0006) para 31 Back

212   Qq398,416 Back

213   Q397 Back

214   Q434 Back

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© Parliamentary copyright 2015
Prepared 23 January 2015