Examination of Witnesses (Questions 8680
8680. MR ELVIN: There were certainly
ample members of the freight industry present. I may be wrong.
I do not see anyone listed.
8681. LORD BERKELEY: Mr Bennett, our
next witness, definitely was there and it may be that another
member of the FTA staff was there as well. Mr Bennett can certainly
answer questions if it is about that particular day.
8682. MR ELVIN: So far as the hearing
before the ORR is concerned, presumably your Association is satisfied
that the freight industry set out its concerns at that hearing?
We believe the freight industry's concerns were set out, and we
are pleased with the response of the ORR. I think it is important
that those are cemented into the Bill to ensure that the security
and guarantees that I was referring to are actually there.
8683. It is right, is it not, that the FTA did
not make any representationsI know others didto
the ORR after the provisional decision was given on 3 March?
(Mr Hookham) Only to welcome them.
8684. You did not think it necessary to raise
any further matters, having seen the provisional decision?
(Mr Hookham) Not pending this hearing
and this evidence.
8685. Lord Berkeley has said and, because you
are appearing under the umbrella of his representation, I assume
you agree that full compliance with industry processes which are
fair and transparent are welcomed?
(Mr Hookham) Absolutely.
8686. Therefore I assume you would not favour
a situation which did not lead to full compliance with standard
industry and regulatory processes?
(Mr Hookham) Indeed.
8687. It is fortunate, I suppose, that today
we find ourselves much closer together on those issues than we
did two years ago?
(Mr Hookham) Indeed.
8688. MR ELVIN: Thank you, Mr Hookham.
Examined by THE
8689. LORD JAMES OF BLACKHEATH: You have
talked of the significance of the increase in the height of containers
from eight foot six to nine foot six, yes?
8690. How far does that now represent a European
standard, and is it compatible with what is coming from the Eastern
European countries, which must presumably be introducing some
new factors for you?
(Mr Hookham) Further witnesses can confirm
this, but I believe it is the preferred standard that new containers
are designed and built to because of the high cubic volume that
they are able to carry. It is a trend which is well established
and is expected to continue.
8691. CHAIRMAN: Thank you very much,
The witness withdrew
8692. LORD BERKELEY: My Lord, my next
witness is Alan Bennett. My Lords, the Committee has heard about
the importance of freight in general and from the representative
body of freight customers; it is now time to discuss rail freight
in particular. I will now call Alan Bennett, Director General
of the Rail Fright Group.
BENNETT, Sworn Examined
by LORD BERKELEY
8693. LORD BERKELEY: Mr Bennett, could
you give an outline of what the RFG is and your experience?
I am Alan Bennett. I was appointed Director General of the Rail
Freight Group in June 2007; I have over 20 years' senior level
experience of the rail freight industry and the rail freight market
in Great Britain and the European Union. The Rail Freight Group
is the representative body of the rail freight industry in Great
Britain. We have over 160 members. Our members, as Mr Hookham
described, range from freight users such as retailers and manufacturers,
through shipping lines, and the rail freight operating companies
themselves, the operators of major transport infrastructure facilities
such as ports and major inland terminals.
8694. Can you give the Committee a brief background
to rail freight in the UK? I suspect that they are all familiar
now with passenger services one way or another, but not all familiar
with freight, and stressing the difference between the two?
(Mr Bennett) In effect the Government
awards passenger franchises on a time-specific, route-specific
basis with protection from competition, moderated in some cases.
The model chosen for the rail freight sector was an industry model
that actually encouraged competition on a network-wide basis and
encouraged market entry. It did this through creating an open
access regime across the British rail network and into major freight
installations and terminal facilities; it did it by creating a
transparent and open timetabling process; a comprehensive network
code that governs the relationship of all rail freight existing
operators and new operators to Network Rail and to each other;
and it created transport disputes resolution and arbitration process,
all of which responded to an independent, economic regulator.
8695. Has the model been successful? Perhaps
we could have slide 5, please.
(Mr Bennett) On many criteria the rail freight
model can be seen as successful. There has been a 60 per cent
growth in tonne/kilometre (tonnes carried multiplied by distance
moved) since rail freight privatisation. That does not simply
reflect the growth in the total market, it reflects an increased
penetration of the road and rail market. Before privatisation
rail market share was around 8 per cent; currently it is around
12 per cent and is rising. Competition and investment in new and
more productive equipment has driven down prices. Service quality
has been greatly improved. On customers' own measure of their
required service quality, freight operating companies are regularly
delivering 98 per cent performance.
8696. Rather better than passenger services
(Mr Bennett) I would not comment. What
I would say is that because the procurement of freight transport
is an industrial process, the criteria on which freight transport
decisions are made are price competitiveness, reliability and
transit time. The increase in market share that I have just described
reflects, as I have said, improved price competitiveness, greater
productivity and greater reliability. That has been facilitated
by over £1.5 billion worth of private sector investment in
the industry, principally in rolling stock but, also, in terminal
facilities, IT systems and in ancillary facilities.
8697. LORD BERKELEY: So, Mr Bennett,
what is the expected growth in rail freight traffic? We have seen
some figures from Mr Hookham on previous slides.
8698. LORD JAMES OF BLACKHEATH: Do you
have a definition, please? I am sorry, I am trying to understandthis
is not easy. A tonne/kilometre: is that arrived at simply by multiplying
the tonnage by the distance it is travelling?
It is, my Lord.
8699. Is that really a significant factor? Presumably,
that is what you charge bythe tonne and the kilometre distancebut
is it the most significant measure of growth and impact?
(Mr Bennett) It is not necessarily the
basis on which transport is charged. It clearly is one of the
elements that goes into the price that is negotiated
5 Committee Ref: A52, Rail freight since privatisation