UK: CAN TRAINS TAKE THE STRAIN?

UK: CAN TRAINS TAKE THE STRAIN? - Rail freight has potential but many problems to sort out first.

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Last Updated: 31 Aug 2010

Rail freight has potential but many problems to sort out first.

Rail freight, as everyone knows, has been in decline since the 1960s.

Even during the last 10 years the trend has continued downwards, leaving rail with just 6% of freight business (or 13 billion tonnes of goods) in 1994. With the railways moving back to the private sector, the ratios are supposed to improve. Rail freight actually increased last year, although market share fell yet again. Is it too late to attract industry back on to the tracks?

According to the Freight Transport Association (FTA), 'there is a clear industrial will to transfer freight from road to rail wherever possible'.

But things aren't that simple. The average distance covered by freight in the UK, 50 km, is seldom economically justifiable by rail. However Julian Worth, general manager in charge of business development at the new freight operator English, Welsh & Scottish Railway (EWS), maintains that bulk can compensate for lack of miles. 'We can be competitive and profitable moving some bulk loads just two miles.' Worth adds that the 6% figure is in any case skewed, since it takes account of all road vehicles from artics to milk floats. 'Rail competes with heavy goods traffic, where it has about 20% of goods moved.'

One grave disadvantage of rail is the extra time and cost of getting goods to and from the railhead. This can add £50 or more to the cost of a load at each end of the trip. In addition, the rail operator has to pay Railtrack for track access, the charges being levied per piece of traffic. EWS is seeking to negotiate a better deal with Railtrack to reduce this cost - and to speed up responses and encourage new business all round.

'There is now a different agenda, rail operators can be more proactive,' argues David Mathew of Allied Steel & Wire who is also chairman of the FTA's Railfreight Council. The Government's decision to quadruple the track access grant (from 5p to 20p per mile), was a welcome shot in the arm. Mathew still wants to see better administration of the freight facilities grant, for investment in sidings, etc. Take-up has been poor - at around 50% - and the Department of Transport is working to make the system simpler and faster.

However the arguments in favour of rail don't all turn on subsidies.

A key factor is ever-increasing road congestion. The environmental aspect is an issue here, but a minor one. Being eco-friendly might tip the balance in favour of rail, says Neil Barlow, marketing manager of the domestic appliance manufacturer Candy - but only if costs are comparable.

Candy looked at using rail, especially for journeys between its sites in Milan and Liverpool. The system seemed suitable but for one problem. 'Our road trailers take units stacked three-high,' Barlow explains. 'Rail containers can only stack two-high. So even though per-trip costs are lower by rail, our unit cost would be 20-25% higher.' There may soon be a new wagon available that will take 9ft 6in trailers, and solve problems like Candy's. New technology is essential if rail is to compete with road, and EWS has high hopes for two systems already in place - railroaders and piggybacking.

There is no doubt about the potential of rail. Even road hauliers like Transport Development Group (TDG) are looking at ways to exploit the system.

'We are supply chain experts, so customers expect us to look at rail as well as road,' says TGD's development director Stephen Williams. 'The freight operators are developing partnerships with road logistics people like us. The ratios are bound to change - rail freight is under-exploited, but there are real problems to solve.'

Long dependent on coal, steel and aggregates, the railways are beginning to win back business in sectors like FMCGs and foods. But sustained political and commercial effort is still needed to overcome the problems, both real and perceived.

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