Thursday, May 24, 2012

Freight Group Welcomes Rail Track Debate on Charges

Cargo Carriers Consulted on Five Year Plan for Potential Costs
Shipping News Feature

UK – Despite its undoubted limitations rail freight continues to be seen by many as the future for cargo carriage offering as it does possible reductions in both pollution and congestion. Last week the Office of Rail Regulation (ORR) published a consultation document on the variable usage charge paid by passenger and freight operators and proposals to introduce a freight specific charge.

One of the principal purposes of the exercise is to consult on the introduction of a new track access charge for certain rail freight commodities in ‘Control Period 5 ‘(CP5), the five years between 2014 and 2019, in order to recover infrastructure costs caused by freight operating on the network that are not currently recovered from other freight charges which the ORR refers to as “freight avoidable costs”.

The ORR clearly recognises that, if multimodal and other rail freight systems are to develop, then operators will need to know in advance just what their costs for track usage are likely to be. The Freight Transport Association (FTA) welcomed the news and stated that it feels an early settlement on the level of charges that will see costs set at viable levels for those using or considering rail freight as part of their supply chain as absolutely essential with Chris MacRae, FTA's Rail Freight Policy Manager, saying:

"We will be engaging with both the ORR and our members who provide or use rail freight transport to see an early and equitable settlement. Consultations like this take place every five years so it is really important that costs are set at a level that attracts and sustains freight onto rail in a viable manner.

"There is much detail in the consultation on freight avoidable costs and charges to specific sectors. But what industry needs, especially shippers considering rail for the first time, is certainty of cost and an expectation in reduction of cost to make rail competitive.

"Earlier this year FTA launched its 'Mode Shift Centre' aimed at facilitating modal shift to less polluting modes by shippers of goods. This is vital to achieve national carbon targets, but it only works if rail’s costs and efficiencies can continue on a sustainably downward trajectory to compete with road. Our 'On Track' report on retailer experience of rail freight bears this out."

The ORR consultation document is available HERE with responses to reach the ORR at  by the 10th August 2012.

Photo: Courtesy of Freightliner