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Rail Freight: Delivering for Britain

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Executive SummaryExecutive Rail Freight: Delivering for Britain 1 Contents Executive SummaryExecutive Executive Summary 4 Introduction 6 The story of rail freight 7 Framework for a successful freight sector 10 Government policy should be aligned across modes 12 A set of consistent legal, commercial and regulatory mechanisms is needed to underpin continued business confidence and private sector investment 13 A network and timetable that is co-ordinated on a GB-wide basis is essential 14 Modelling capabilities should be enhanced which better capture the value of rail freight, to help make choices about network use 16 The GB-wide charging regime that provides long-term clarity and is affordable should be retained 16 An industry structure that provides strong incentives to all parties to encourage freight growth should be prioritised 17 Industry processes that provide flexibility for freight to respond to changing industrial and logistics demands must be retained 18 Case studies 19-23 1. Rail freight building a strong and balanced economy 19 2. Freight supporting Network Rail and the delivery of passenger services 20 3. Delivering benefits to businesses 20 4. Supporting the delivery of major infrastructure projects 22 5. Investment in environmental benefits 23 6. Discover the UK’s biggest mover of metals 23 This document is produced and distributed by Rail Delivery Group. All material is property of Rail Delivery Group Ltd. 2 Rail Freight: Delivering for Britain Contents 3 Executive Executive SummaryExecutive Summary SummaryExecutive This document is a submission to the Williams Government policy should be aligned Review on behalf of the RDG Freight Board. across modes The rail freight industry is vital to the A set of consistent legal, commercial economic success of Great Britain, delivering and regulatory mechanisms is needed to around £1.7bn of economic benefits and underpin continued business confidence supplying £30bn of goods to customers and private sector investment across Britain each year1. The environmental benefits from moving goods by rail rather A network and timetable that is co- than by other modes are substantial, with ordinated on a GB-wide basis is essential rail producing lower carbon emissions and less local air pollution. These benefits have Modelling capabilities should be enhanced been realised through substantial investment which better capture the value of rail by freight operators and other parties in freight, to help make choices about the logistics chain. The continued stability network use of the rail industry framework and business confidence (from freight operators and their customers) are critical to ensuring continued The GB-wide charging regime that provides investment with the economic, social and long-term clarity and is affordable should environmental benefits that this will bring. be retained An industry structure that provides strong incentives to all parties to encourage The environmental benefits from freight growth should be prioritised moving goods by rail rather than by other modes are substantial, with rail Industry processes that provide flexibility producing lower carbon emissions for freight to respond to changing industrial and less local air pollution and logistics demands must be retained This framework will not only benefit freight, To support a sustainable and successful rail but also passenger operators: delivering freight sector into the future, the following a better railway for all participants and framework should be incorporated into therefore for all the users and customers of whatever industry structure is developed the railway. through the review: 1. ‘Rail freight working for Britain’, Rail Delivery Group (June 2018), p.1–2. Values are for 2016. 4 5 Introduction The story of Introduction rail freight The story of rail freight rail story of The The rail freight industry in Great Britain • freight operators and their customers Government through Network Rail encouraged rail freight operators to invest in delivers substantial economic, environmental make significant long-term investments of has invested approximately £700m their operations, to innovate and deliver high- 2 quality services to their customers, despite the and social benefits . This paper outlines their own money in assets and people; into improving the capacity and the contribution of rail freight and details uncertainty created by the charging regimes. • there are five national freight operators the framework that the rail freight industry capability of the rail network for Freight operators commit to investments that compete with each other and with recommends is included in the Williams freight that span many control periods and different road hauliers to supply logistics services Rail Review. The paper has been developed charging periods. for business; through extensive input and consultation with Since privatisation, freight operators the freight operators, Network Rail and the • freight operators are national businesses: have invested more than £2.8bn.8 Those Rail Freight Group. organisational and administrative The rail freight industry in Great Britain makes investments have been focussed on increasing boundaries are irrelevant, with an important contribution to the economy: Underpinning this framework are three key the capacity of freight trains, enabling more approximately 80% of freight journeys delivering £30bn of goods to customers principles, which are that any rail industry goods to be moved on fewer trains, whilst crossing more than one Network Rail route across Britain and generating around £1.7bn of improving reliability, reducing delays on the structure should: 4 boundary. economic and environmental benefits. network. To date, 70% of rail freight operators’ • consider the interests of all passenger and Despite these differences, most of the Rail freight competes with road freight – 11% investments have been directed towards freight customers; 5 framework outlined in this paper would of inland freight transportation is made by rail . capacity enhancements and 30% towards 9 • ensure decisions about access to the also benefit passenger services thereby Rail freight could deliver significant additional improving reliability and performance. network continue to be based on contributing to an overall improvement in the benefits if it were to increase its market share Investments by rail freight operators have been transparent criteria; GB rail industry. of inland transportation – one freight train can complemented by investments made by other remove up to 76 Heavy Goods Vehicles (HGV) stakeholders: government through Network • support a successful rail freight sector A stable and transparent environment is from the road6, reducing congestion, delivering Rail has invested approximately £700m into (consistent with government policy to critical for ongoing private sector investment environmental benefits (as a tonne of rail improving the capacity and capability of the rail 3 support modal shift of freight to rail) . required to enable rail freight to continue to freight emits 76% less CO2 than a tonne of road network for freight operations (e.g. providing deliver economic, social and environmental 7 The rail freight sector operates very freight) and safety benefits. gauge clearance and enabling longer trains to benefits. 10 differently to most of the passenger sector: operate) and ports have invested over £250m Rail freight is a highly competitive sector, where between 2007 and 2014 to connect their • freight operators have no franchise five national operators compete directly for infrastructure to the rail network.11 The figure agreements: they operate on an open tenders and to develop new traffic to rail. This below illustrates some of the investments by access basis in response to customer competition, both with other modes and within ports in rail freight facilities across northern demand based on commercial business to rail freight, has been a significant driver of the England.12 business contracts; improvements and efficiency gains that rail freight has achieved since privatisation. It has 4. Rail Delivery Group (2018), ‘Rail Freight – Working for Britain’, June. Values are for 2016. / 5. Rail Delivery Group (2014), ‘Keeping the lights on and the traffic moving’, May, p.5. / 6. Department for Transport (2016), ‘Rail Freight 2. ‘Rail freight working for Britain’, Rail Delivery Group (June 2018); and ‘Value and importance of rail freight’, Network Strategy – Moving Britain Ahead’, September, p.6. / 7. ibid. / 8. Rail Delivery Group (2018), ‘Rail Freight Working for Rail (April 2013). / 3. ‘Rail Freight Strategy – Moving Britain Ahead’, Department for Transport (September 2016), paras Britain’, p.6. / 9. ibid. / 10. ibid. / 11. ibid, p.22. / 12. Rail Delivery Group (2015), ‘Freight Britain – Continuity and certainty 54, 61–63. for rail freight’, February, p.6–7. 6 Rail Freight: Delivering for Britain Introduction 7 Port investment in freight facilities Newcastle CP4 funded freight schemes* 1 Other major railway lines City In a typical year, freight operators Example of port provide 5,000 train services to The story of rail freight rail story of The investments worksites across Great Britain, freight rail story of The Leeds Teesport: new rail terminal make 14,500 trips on the network 1 and contribution to gauge in support of Network Rail’s Doncaster 2 clearance work on the Manchester mainline engineering activity 3 Port of Hull: rail loading Liverpool She eld 2 facilities for biomass Port
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