Brexit is coming soon. It is therefore wise to give a final account of the state of rail freight in Britain before future events come to reconsider everything.
Railway is the backbone of the British economy. It employs around 240,000 people (passengers enterprises and manufacturers including), and moves 86 million tonnes of freight each year. Contrary to what is believed, British Rail was already been reorganised into « sectors » in year 1987:
- Trainload Freight took trainload goods, with four sub-sectors coal, petroleum, metals and construction ;
- Railfreight Distribution took non-trainload goods, like ground operations ;
- Freightliner took intermodal traffic
- Rail Express Systems took parcel traffic.
In 1986, quarrying company Foster Yeoman prompted a turnaround in the reliability of rail freight by obtaining permission to run its own trains, and importing the first four EMD class 59s. Although managed by the state-owned British Rail, these units already enjoyed semi-autonomous operations. The years 1988-89 recorded nearly 149.5 million tonnes transported.
In 1996, these sectors were easily sold to new operators. Over time, the fully privatized UK rail sector has consolidated and draws the landscape we know today.
Coal, first victim of british politics
As in Belgium, France or Germany, the British railway lived mainly through heavy industry. A peculiarity of Britain was its policy centered on its oil extracted in the North Sea, coal mines as well as coal-fired power plants. The famous British Rail service ‘merry go round’ thus maintained a typical traffic of the second industrial revolution. It was undermined by Thatcher’s policy with the closure of the collieries and the social seism that followed in the 1980s.
From this troubled period, there remained in Britain only coal-fired power plants. It was without counting the new ecological influence which imposes now to put an end to this last avatar of « the old world of the XXth century ». And this is noticeable in the recent figures.
The state of the art today
Most freight operations are run by ten private sector companies. There are no public subsidies for freight operations nor franchising operations, as for passenger services. British companies operate totally open access, in an area restricted to Great Britain alone.
The two largest freight operating companies (FOCs) are DB Cargo and Freightliner, with Colas Rail, Direct Rail Services (DRS), GB Railfreight (GBRf) and « the others » accounting for most of the rest. Various other companies run rail operations within their own manufacturing or production sites. Despite the diversification of the rail freight sector, heavy industry still strongly marks transportation figures.
Since the mid-1990s, the operators have invested over £2 billion in new locomotives, wagons and other capital equipment to enhance capacity and improve performance. They have introduced new wagons to cater for new flows, for example wagons designed to handle biomass and aggregates traffic. They have also introduced new diesel locomotives to haul longer and heavier trains, from the now omnipresent Class 66 to the Class 70 ‘Powerhaul’ locomotives for Freightliner and Colas, as well as DRS’s Class 68 and electric/ diesel Class 88 locomotives.
Total volumes increased by over 65% from 13 billion net tonne kilometres in 1995/96 to over 22 billion in 2014/15. In 2015/16 volumes fell by about 20%, primarily due to a decline in coal traffic to power stations, but 2015/16 total volumes are still over 30% above 1995/96 levels. The decision to phase out coal-fired power stations in order to reduce carbon dioxide emissions continues to affect the amount of coal lifted.
The biomass, waste and automotive sectors have also seen strong growth since 2011. The total for other goods lifted has been steadily rising in this period (2009-10 to 2016-17), however, they also recorded a decrease of 3.1% on last year to 65.3 million tonnes in 2017-18.
Globally, between the early 1980s and the mid-1990s, rail’s share of the market fell, but it has since increased its market share of the transport market from about 8 per cent to 11 per cent in 2010, in terms of tonne kms moved. Freight train movements totalled 224,000 in 2016-17, an average of 613 a day. Nonetheless, road continues to dominate the domestic freight market, accounting for approximately 89% of the transport market (68% of the total domestic freight market with coastal shipping and pipeline traffic).
It is therefore interesting to see how British rail freight has been able to gain market share in other sectors that are no longer part of heavy industry. The table below shows the distribution of rail freight. We see that intermodal transport is dominant. On the other hand, one can question the international sector, barely 3%, which indicates that serious efforts must be made with rail policy via the Channel Tunnel. We are very far from the dithyrambic projections of the 90s.
As reported Network Rail in a study, the size of the manufacturing sector has declined as a proportion of the national economy and there has been an increase in the volume of imported manufactured goods. This has affected rail freight in two ways:
- Traditional bulk markets for rail, such as ESI coal (both domestic and import) and raw material supply for domestic steel production, have diminished substantially ;
- The Import of goods by major ports, increased.
The net effect of these changes, together with the recent decline in flows linked to coal imports for the electricity supply industry, is that intermodal freight has become the largest single commodity sector conveyed by rail.
The ORR also notes a growth in the share of consumer goods. Recent rail freight figures show a positive future for rail freight in consumer goods and construction materials, which together now account for almost two-thirds of UK rail freight. With a 40% share of all freight moved by intermodal rail over the 12 months to April 2017, consumer goods sector recorded its highest share since 1998-1999 – and the highest for any sector since 2006-2007. Executive director of Rail Freight Group Maggie Simpson said: « The investment and efforts of train operators and their customers has delivered record-breaking results in construction and intermodal traffic, which we hope to see continue in the years ahead.» This is verified with the good performance of intermodal traffic. Port traffic accounts for 80% of total UK intermodal traffic, highlighting the importance of the container sector.
The Port of Felixstowe is Britain’s largest container rail terminal with record-breaking throughput, and the broadest and most frequent range of services of any port in Britain. Three operators – DB Schenker Rail (UK), Freightliner and GB RailFreight – share the 66 daily arrivals and departures that connect 15 domestic destinations throughout Great Britain. Such traffic demonstrates that the vitality of the intermodal transport between the port sector and the terminals inside the country is possible when we give the possibility to various entrepreneurs to manage and create quality, with good prices, in the transport of maritime containers.
The Freightliner operator, which already existed in British Rail’s time, currently operates around 100 daily trains through a network of 12 railway terminals, 8 of which are owned. It carries nearly 770,000 containers a year.
Another sector is large-scale retailers, whose logistics are known to be an essential factor in the price war between large retailers. For this reason, this sector often avoids the use of rail, which is considered less flexible and too slow. He prefers to use road transport and avoid too large stock, very expensive. This is not the case for Tesco, the UK’s leading retailer with 12.5% of the market and 3,500 points of sale throughout the UK. As a responsible retailer, Tesco places a high priority, according the entreprise, on meeting their environmental obligations. Working in partnership, Direct Rail Service and the Stobart Group have combined the very best of their road and rail capabilities to create a tailor made solution to meet Tesco’s requirements. The end result is a service which is providing highly efficient distribution between Tesco’s Daventry depot and Glasgow-Mossend. « This new service is part of our on-going commitment to be zero carbon by 2050, » said Nigel Jones, Tesco’s UK Logistics Director.
Stobart Group’s intermodal rail services operate 5 services a day, based at their hub rail terminal at DIRFT with rail services reaching all parts of the UK including Scotland’s central belt, Inverness and Aberdeen in the north down to Cardiff, South Wales and London and the South East. Stobart also has its own container terminal at Widnes (photo, between Manchester and Liverpool). This terminal is connected daily to Southampton and Felixstowe.
According Network Rail, statistical data attribute 20% of intermodal traffic to flows between non-port terminals.
Available capacities and trains length
In 2014, Network Rail created a ‘Capacity Management’ work stream with the aim of reviewing unused freight schedules. This was a collaborative work stream between Network Rail and all freight operators, intended to generate additional freight capacity without the need for infrastructure enhancements. In April 2017, the British network operator announced that almost 4,700 reserved train paths remained unused. According to the infrastructure manager, the spare capacity is attributable several factors including more efficient freight operations with longer and fuller trains, and better productivity with fewer, part-loaded freight trains, reducing wasted capacity. Paul McMahon, Network Rail’s managing director for freight and national passenger operators, said to Container-Mag: « Capacity has been freed up for the whole railway but essential capacity is reserved for freight operators. This is important given the need to support the growth of freight on the network to support the economy. »
A key driver of rail freight’s advantage relative to road is its ability to carry a greater volume of goods per journey. Where the length of trains is restricted by infrastructure limitations, this competitive advantage is diminished. Train length capability is also reliant on adequate loading and unloading facilities at ports and terminals, highlighting the need for integration across the industry.
Relatively light goods, like swap bodies, containers and automotive, are the main beneficiaries of longer trains as the traction power necessary to haul them is more readily available. For intermodal trains, the current aspiration from Network Rail is to achieve a length of 775m (including locomotive). A long-term aspiration exists across the industry to research the possibility of running trains of even greater length, for example 1500m for automotive trains.
And tomorrow ?
We would have liked to start the year 2019 with a note of hope. We can’t brings to that, because Brexit is certainly not a positive reference. Rail Delivery Group is clear about the impact of Brexit on UK rail freight: « The smooth flow of goods between the UK and EU is critical to the transport sector. Any changes to the tradin relationship with the EU will be faced by the transport sector in the first instance. The Channel Tunnel is the only physical link between Britain and mainlined Europe and one in four containers that arrive in British ports make their onward journey by rail. »
The port sector is expected to be hit hard in the truck segment from Europe via ferries. However, these trucks do not take the train in Britain because of a problem of gauge. Only swap bodies could be impacted. On the other hand, the containers are rather part of the ‘overseas’ market and will probably have to be treated with new customs rules. This may further obstruct the port terminals and an impact on rail traffic is to be expected. The Rail Delivery Group therefore proposes the creation of new Railway Customs Areas (RCAs) at rail freight terminals to avoid the need for a single border checkpoint.
It only remains to wait for the 2019 figures to get an idea of the situation ….