Examination of Witnesses (Questions 9020
9020. LORD BERKELEY: The Committee has
heard from many customers. Lindsay is representing the second
largest rail freight operator, the Freightliner Group. Could you
explain, Ms Durham, what your company does and your experience,
Freightliner is the second largest rail freight operator in the
UK. We haul about 30 per cent of the rail freight in the UK currently.
We are a specialist in the movement of deep-sea containers from
ports to inland terminals and then for onward distribution to
retail parks and shops. We also move aggregate and cement into
the London area from the Peak District, Leicestershire and from
South Wales. I have been working for Freightliner for nearly five
years, and I have been working in the rail freight sector for
9021. If we just examine briefly your rail freight
operations and that of your colleagues, if we start on the east
side, can we have slide 22, please.
This is mostly containers. Could you just go through the business,
(Ms Durham) Freightliner trains serve the major
ports at Felixstowe and Tilbury on the east side; and in the future
we hope to serve the new port and London Gateway. We move trains
to the conurbations in the West Midlands, north and Scotland and
then onward distribution locally by road. Rail currently has a
25 per cent market share in this sector. It used to be 17 per
cent in 1996 but we have increased the market share, and we have
done that by increasing service quality. Freightliner in that
time has increased right time arrivals of containers to customers
from 90 per cent to 98 per cent. We have done this through a lot
of private investment. Freightliner alone has raised £380
million of private investment, and that is quite a lot for a company
of our size. Other rail freight operators have also invested,
and competition has also encouraged the service quality to rise.
We have to be able to reach the service quality because it is
the service quality that road also delivers. If we cannot get
the same service quality at least as road we simply do not get
the business. In order to make that investment we need certainty
on the railway; and we need to know that we can grow our business.
We cannot go to our investors and say, "We'd like some money
to buy some new locomotives", and they say, "Well, how
do you know you're actually going to be able to run those trains?"
and we say, "We don't really know". We do need to understand
that there is going to be capacity available on the railway to
grow rail freight so that we can invest.
9022. The next slide, slide 23, tries to explain
what, logistics flows?
(Ms Durham) Yes, this is just really to demonstrate
that movement by rail is somewhat more complex than movement by
road. You will see at the bottom of the slide road is a very simple
movement from the quay of the port onto the road vehicle and straight
to the final destination. Whereas by rail we have to shunt the
container onto some sort of road vehicle, it could be an internal
road vehicle, on to the train at the rail terminal, and then rail
takes the main trunk leg to another rail terminal which will be
in a conurbation, say, in the Midlands or the north and then we
lift the container by means of a crane onto a lorry and then it
is delivered locally. This slide really demonstrates that for
us to compete with road we have to be really efficient; because
if we are not efficient we just will not be able to get that 98
per cent delivery that is required by the market. You have to
remember that road still has 73 per cent of this market and we
have to keep improving to be able to move more goods by rail instead
9023. Can we move to slide 24.
Mr Cann has given some gross figures for containers and you have
similar views. Do you operate from other ports besides the ones
on the north Thames and Felixstowe?
(Ms Durham) Yes, we also operate from ports
at Southampton, Thamesport and Liverpool, but they are not directly
affected by Crossrail. We do support the forecasts that are industry
forecasts, which have been supported not only by the industry
but also by Government. It is only the continuation of the trend
for the last 20 years but it is just expected to continue in the
same manner. You have heard a lot of figures today about growth
and it is quite difficult to get your head round itlots
of growth figures over lots of different times; but one thing
we always think about is that within ten years there are going
to be two million more containers a year arriving at our ports
and they need to be transported somehow inland. If rail has the
current market share of 25 per cent this would equate to 75 more
trains a day on our rail network. Hopefully, that gives you an
idea of the scale of the issue, because it is very difficult to
relate, I know, all the different numbers to reality. We hope
to grow market share. We have already grown market share, and
we hope to continue to grow market share. We can only do this
by using our equipment very efficiently. If you think about easyJet,
they use their aircraft very efficiently. They keep their aircraft
moving all day and they only stay in the airport as short as possible.
They have relatively cheap fares but by making high use of their
capital equipment they can make a profit. In order for us to compete
with road we have to do likewise, and we have to keep our equipment
moving 24 hours a day, six days a week. It is not like a passenger
service where it stops at night. We continue to run 24 hours a
day. We would like to run seven days a week, but that is another
9024. Finally, on this slide, could you explain
to the Committee how many containers or TEUs go on one train?
Some members may find it useful to do the calculation.
(Ms Durham) On average there are 30 containers
on a train, and that is in both directions.
9025. Are they 40 foot long containers or 60
(Ms Durham) That would be a mixture of
40 foot and 20 foot containers generally on the train, because
heavier goods tend to go in 20 foot long boxes, and lighter goods
tend to go in 40 foot long boxes.
9026. Slide 25, could you explain the routeing
of the trains?
(Ms Durham) This is what I hope is a very simple
map, so that you can see the routes that are currently used from
the major ports at Felixstowe and Tilbury, and the future ports
at Bathside Bay and London Gateway. These are the rail routes;
and where it is highlighted with a red blob is the Crossrail route
east of London. You can see that our trains will have to go through
the Crossrail route, and then they go on towards the north of
Britain and the Midlands.
9027. You have left out any line between Felixstowe
and Daventry and Peterborough in the middle, which you will be
talking about presumably in the future as a diversion route. Could
you just explain why the trains do not go on that at the moment?
(Ms Durham) That route is not currently
gauge-cleared. You heard earlier about the worldwide trend of
boxes moving to be nine foot six high instead of eight foot six
high, and we cannot currently move those boxes on that route.
The Government has funded the upgrade of that route, and we hope
it will take place over the next few years. I will talk about
that a bit later. I think the important thing with that route
is that is a route for future growth. I know the next witness,
Mr Garratt, will talk about the number of trains that can be pathed
through Crossrail before and after Crossrail, and they are very
similar. There is growth that cannot be accommodated now that
is known about. The Felixstowe to Nuneaton route is to take that
9028. Let us move on to slide 26, which is the
train operator's view and what happens on the west side of London,
which rather complements Mr McLaughlin's evidence.
Take us very quickly through this, please?
(Ms Durham) The nub of it is that London needs
a constant and reliable supply of aggregate materials. One of
the big issues is the terminals in west London that were highlighted
on the earlier map are quite small. You can imagine that the cost
of land in London for an aggregate terminal is disproportionately
high, so the terminals tend to be quite small, so they need to
be very regularly restocked. It is very important to the building
industry to know that they can get a reliable supply. It is no
use going to terminal and a particular type of stone is not available.
We need to be able to deliver by train very regularly and reliably.
We cannot let those people down because they really do not hold
a lot of stock.
9029. The map on the next slide is again similar?
(Ms Durham) It is similar. You can see the
routes marked, the Midland main line, which is the main route
from Leicestershire and the Peak District quarries coming down
through London and crossing the Crossrail route; and the delivery
to the terminals are the yellow blobs. From the other direction,
the quarries in Somerset and also South Wales; and they deliver
not only to those terminals marked yellow but also to the other
side of London, to east London. They also require to use the same
route as Crossrail.
9030. If we move on to the next slide, 28, this
is really back to the more general issues of what train operators
need during the construction of Crossrail to mitigate the adverse
effect of any possessions or closures.
Could you take us through that, and could you just confirm what
Mr Elvin mentioned, that the Gospel Oak-Barking upgrade in its
total has been agreed and funded?
(Ms Durham): Yes. I will deal
with that first. The Barking to Willesden via Gospel Oak route
is funded and work has even begun on that route to upgrade it.
It has not yet finished. That has been funded by the Government
but one very important point is that the timetable model that
Crossrail has done does assume that that route is open, so although
it was not actually done solely for the purpose of Crossrail it
is a very important plank in enabling Crossrail.
9031. What I want to talk about here, though,
is more about the disruption while the Crossrail work is going
on. This is something that is currently very vague to us. We have
not yet had any proposals from Crossrail as to what the disruption
is likely to be and we are very concerned, because we need to
be able to offer a reliable consistent service otherwise our customers
will simply choose to go by road. For example, I do not know if
you remember a few years ago there was an accident at Hatfield,
and after that accident there were a lot of problems on the rail
network where trains were slowed down and Freightliner lost 15
per cent of its business to road, and it has taken many years
to build up confidence with the customers again that rail is a
reliable mode. So it is very important to us that we can continue
to run while Crossrail is being built, and there is a mixture
of measures that we would look for. One is that on both the east
and west side of London, of the tunnel, there are four rail lines
and we would ask that only two of those are closed at once, where
9032. Can I stop you there for a second? I understand
that Network Rail is concerned that they still have not reached
agreement with the Promoters over the construction phase and the
operation phase of these two four track lines. If Network Rail
was not responsible for two of the tracks and TfL was responsible,
how would that affect the construction phase and your ability
to run trains?
(Ms Durham): I think we would be very
concerned. What is important is that two out of the four lines
are open and if two belong to Network Rail and two to TfL we do
not understand how that would work. We do not have rights to run
on TfL rails, we only have rights to run on Network Rail rails,
so it is very important the four are managed as one both during
the building of Crossrail but also after, when the Crossrail service
is running, because there is still going to be a need to do regular
maintenance work on the routes. It is the normal practice now
that maintenance is done on two out of the four rail lines overnight
and we continue to run on the other two lines, but those lines
swap over in different weeks so it is very important that they
are managed as a package and not by two individual companies.
9033. Looking at the last two bullet points
on your slide, I am sure you appreciate that asking the Committee
to have a view on these two items is outside the scope of the
Bill, but are you suggesting that the Committee might recommend
to Government that they accelerated the funding of these two upgrades
for that reason?
(Ms Durham): I would ask the Committee,
yes, that they do recommend to Government. In the case of the
Barking to Willesden via Gospel Oak route, that route is fully
funded and all I would ask is that the Committee recommend to
Government that that work is finished before major construction
work starts on the Crossrail route. Also, the Felixstowe to Nuneaton
via Peterborough route is currently partly funded, the gauge work
is funded, and I know that Network Rail have recommended that
a further £50 million is spent out of the strategic freight
network money that has been allocated by the Government in the
White Paper which was published in June last year, so there is
still further work after that. I would also ask the Committee
that they recommend to Government that those works are also finished
before the Crossrail major disruption commences.
9034. Ms Durham, you have heard a lot of discussion
today about industry processes, access rights, et cetera, and
your view is on slide 29 of the works, which I think all the Petitioners
today would like to see committed.
Could you give your view on whether there is a conflict between
what the Office of Rail Regulation might be saying and what you
are asking for here in terms of asking the Committee to require
the Promoters to commit to these rights? And could you at the
same time give a view as an operator as to what it means to improve
the operation quality performance on a line from 72 PPM to 92
PPM? Is it easy? Is it child's play? Or is it incredibly difficult?
(Ms Durham): I will take the first one first.
Freightliner fully supports the Regulator's decision on the access
option. We make it absolutely clear we do not want any amendments
to that, and it is right that the independent Rail Regulator made
that decision. We do see that it is the role of the Committee
and not the Rail Regulator to make decisions on rail enhancements.
The Regulator's role is to allocate capacity on the network. We
do not see it as his role to direct people to put in new capacity:
it is really the job of Government to decide what scheme and capacity
is created. If this was a planning inquiry for a private scheme,
if Crossrail was a private scheme, it would be as part of the
planning conditions that such conditions to make commitments to
infrastructure were made, so we see the two things as quite separate,
and it is really for the Committee to decide.
9035. We have this list of six, and it is the
same list as EWS will show you tomorrow except there is one further
one, the Chadwell Heath/Goodmayes loop, which is on the east side
and EWS are not bringing that forward tomorrow. These are six
works out of the total of 24, so we are not asking for all works
to be committed, just these six, and the reason is that they are
particularly important for how passenger and freight services
will operate together, and these allow flexibility in the network.
Some of them are loops or extra bits of line that allow basically
freight services to be put one side while passenger services operate,
and they are particularly important during times of perturbation
where you have a bit of flexibility to move services around. If
you have a timetable and you plan to use 100 per cent capacity
it will not be reliable, and this may be one of the issues as
to why the current model only shows a 71 per cent PPM, which everyone
has agreed is unacceptable, and I know Crossrail have agreed that
it should be at least 92 PPM. It is a very big challenge to get
from 71 to 92; the 71 already assumes that all this infrastructure
will be built as per the list in the Bill, and we will be concerned
if these were taken out, that would make 71 even worse. So on
top of that I think there is a big challenge, and I think we are
waiting for Crossrail to put forward proposals as to how they
are going to get from 71 to 92.
9036. Finally, were you aware of the first response
from the Promoters to the ORR's termination of the access option
where basically, and it is dated 17 March and I think you have
seen it already, the Promoters have not quite, I think, accepted
the wonderful independent due of the industry processes, and in
paragraph 4 they are basically saying: "Well, if we do not
get all the trains we asked for in the original option application
we are going to leave out these freight loops, because there is
not really any demand for them and there is no business case".
Is that reasonable?
(Ms Durham): Obviously we are aware of this
response and when we received a copy of it we were quite concerned,
because it does seem to indicate that Crossrail were unhappy with
the proposed access option from the Rail Regulator where the Rail
Regulator has said that at the moment he will not allocate two
paths an hour offpeak to Crossrail but he will leave those unallocated
and anyone can apply, including Crossrail and freight operators
in the future, and as a consequence of this the DfT wrote this
letter that indicates that some of the enhancements will not be
done if they do not get their two paths an hour. So it is an indication
to us that Crossrail are considering not doing all the enhancements,
and I think these will particularly be a concern to reaching the
levels of performance for freight and passenger together, and
even being able to time all of the freight services if these are
9037. Even if they have done a timetable which
was only based on all those enhancements being built?
(Ms Durham): Yes. Obviously there is the
Regulator's process to protect us but I think one of our concerns
is that these works need to be done at an early stage of Crossrail.
It is no use getting to the end of all the works and then finding
the model does not work, because it would be exceptionally disruptive
to go back and have to do more works rather than new Crossrail
services operating, so it is very important that all the works
are done during the construction phase.
9038. LORD BERKELEY: That is the end
of my examination, Ms Durham.
9039. CHAIRMAN: Mr Elvin?
Cross-examined by MR
31 Committee Ref: A52, Movement of deep-sea containers
by rail (LINEWD-34_05-023) Back
Committee Ref: A52, Deep-sea containers supply chain-Rail v.
road (LINEWD-34_05-024) Back
Committee Ref: A52, Future Growth (LINEWD-34_05-025) Back
Committee Ref: A52, Freightliner map highlighting interaction
with the Crossrail Shenfield to Stratford line (LINEWD-34_05-026) Back
Committee Ref: A52, Movements of aggregates and building materials
for London (LINEWD-34_05-027) Back
Committee Ref: A52, Freightliner map highlighting interaction
with the Crossrail Maidenhead to Paddington line (LINEWD-34_05-028) Back
Committee Ref: A52, Freight train operators' needs (LINEWD-34_05-029) Back
Committee Ref: A52, The essential new works for freight (LINEWD-34_05-030) Back
Committee Ref: A52, DfT response to the ORR's decision on the
Crossrail Access Option (LINEWD-34_05-093) Back