Wednesday, December 8, 2010

Rail Freight Report Gets A Mixed Reaction From The Industry

Can Proposed Cost Savings Please Everyone?
Shipping News Feature

UK - The report by Sir Roy McNulty into the way the country’s rail services should operate has been largely welcomed but some logistics interests have concerns regarding the age old problem of integrating freight trains into a network whose primary concern tends to be passenger carriage, especially in these days of high speed services.

Sir Roy was tasked by the previous administration to thoroughly review the rail industry as a whole and, unsurprisingly for a man who was Chairman of the UK Civil Aviation Authority (CAA) for eight years, his thoughts on the possible introduction of airline style pricing for passengers with higher tariffs at peak times to dissuade travellers, have captured most of the headlines when reviewing his preliminary report.

Now the Freight Transport Association (FTA) have spoken out after considering the report, expressing fears that the drive to transfer more of Britain’s freight from trucks to rail will be threatened if passenger carriage marginalises cargo movements. Christopher Snelling, FTA’s Head of Rail Freight, said:

“Sir Roy’s report is to be welcomed in general, but there are certain issues that will need to be resolved if rail freight is not to lose out from these changes. Firstly, the concept of integrating infrastructure with passenger operations sounds alarm bells as this will surely focus on just passenger needs, which could lead to second class service for freight.

“We are also concerned about the notion of regionalising Network Rail. FTA members already experience difficulty in other European countries where they have to work with multiple regional infrastructure managers to operate a service across the country. Unlike passenger services, which can be regionally focused, freight works when it travels across the country. It therefore needs to access the network through one simple GB-wide system.

“Unless rail freight is valued properly then these cost savings could come at great expense to rail freight and restrict the number of businesses that are able to make use of rail as a cost effective, environmentally-friendly and reliable alternative to road.”

The vast majority of freight interests in the country support the switching of traffic to the railways in a drive to produce a more carbon friendly industry but the conflict between high speed passenger services and the slower moving rail freight wagons are causing the same, and sometimes more serious, problems world wide.

Upon reading the interim report the Secretary of State for Transport Philip Hammond said yesterday:

“This Government are determined to secure a sustainable and efficient railway. The spending review settlement has demonstrated our commitment to rail transport. The sustained financial support we have offered now needs to be matched by a relentless drive for efficiency on the part of the industry. A one-size-fits-all model is unlikely to be the right solution. I am also clear that the changes we are proposing must protect the interests of freight operators on the network.”

For UK shipping interests to make any sort of meaningful switch from road freight to rail it would require a combination of cost reductions, or at least parity of rates, coupled with comparative delivery time schedules, as well as the perceived reduction in pollution associated with the medium.

In a country the size of the UK that may prove an almost insoluble problem whilst the carriage of people is seen as an overwhelming priority. It is difficult to equate the reports aim of saving £1 billion annually with its avowed intent to give rail franchisees more power as to how they go about earning a profit.