Tunnel
GB Railfreight has had a busy couple of years. Its sale to Eurotunnel has seen it begin services to Spain for Tesco, while its domestic services have continued to grow, as Katie Silvester discovers
W PAGE 28 MARCH 2012
hen the Channel Tunnel opened, its owners, Eurotunnel, expected it to be popular with
rail freight operators – primarily BR at the time – giving them the opportunity to run trains seamlessly between the UK and the Continent for the first time. But take-up has been low. High access charges for using the tunnel, coupled with the problems typically faced accessing infrastructure in France via the notoriously bureaucratic SNCF, have put most freight operators off. DB Schenker, formerly EWS, has always run some services through the tunnel, but other UK freight carriers have avoided it. When Freightliner wanted to expand
internationally, it began operations in Poland and Australia, rather than send trains through the Channel Tunnel. GB Railfreight was also wary of the Tunnel. MD John Smith told Rail Professional in 2007: ‘I’d rather steer clear of the Channel Tunnel. There’s too much risk involved.’ Now all that is set to change. GBRf,
formerly part of FirstGroup, was sold to Eurotunnel 18 months ago. Its new owners bought the company expressly to improve the tunnel’s credibility for rail freight, FirstGroup having sold GBRf off to settle some debts as it was a non-core business for the passenger train and bus operator.
John Smith has remained as managing
director of GBRf, but now also has responsibility for the management of Europorte Channel, Eurotunnel’s freight subsidiary. ‘Life’s changed fairly dramatically,
because we are strategically important to Eurotunnel, which wasn’t the case at First. We sit within the Europorte subsidiary, to keep operations separate from infrastructure, which is the concession of running through the Channel Tunnel. The portfolio of operations within Europorte includes other terminal operations in France – Europorte France, which is a rail freight operation, and Europorte Channel, which is what I’m now responsible for in addition to GB Railfreight.’ This sounds a bit complicated. In
essence, GBRf continues to operate as an independent freight operator as it always did, but it also offers services to other rail operators wanting to use the tunnel. Smith explains: ‘At a very practical level,
Europorte Channel has a licence to operate trains in the UK, so, depending on where the destination is, particularly for Daventry, the Europorte Channel driver climbs on the train and Europorte Channel charges the customer for haulage from Coquelles to Daventry. We don’t stop in Dollands Moor anymore, we bypass that. With some of the business we are developing, we’re going to new locations.’ GBRf has begun its own services through
vision
the tunnel. One carries refrigerated goods for Tesco from Spain through to Barking, on behalf of Stobart. It’s a time-sensitive service that needs to arrive within an hour of its booked time, but customers are prepared to pay for this level of reliability. Another regular run carries white goods from Daventry to Italy. ‘There’s talk of how much the cost of
transiting the tunnel is, but all I can say is that we’re managing to make money, satisfy customer needs and price it at a level that allows incremental growth,’ says Smith. The company is looking at other
potential services from the Continent. ‘We’ve looked at France, at the consolidation of logistics centres in France; we’ve looked at Spain, though you’ve got a gauge change; we’ve looked at the France, Germany, Spain, Italy-type corridor through the tunnel.’ Like other freight operators, GBRf
has struggled in the recession, but it hasn’t seen the losses that its larger competitors Freightliner and DB Schenker have. Its profit was £3m on a turnover of £57m in 2010, the most recent year-end figures publicly available. And the company’s performance impressed the Rail Business Awards judges sufficiently for GBRf to win the VTG Rail Freight Excellence of the Year prize in the 2010 awards. ‘Since then, growth has picked up,’ Smith
says. ‘To a certain extent, that’s because we’ve been procuring our own assets – now we don’t have to lease anymore, we’ve been buying Class 66s. Our growth has continued for 2011; that will show in our turnover and profits increasing quite dramatically.’ Smith, 50, started out as an engineer on
the railways, having begun his professional life as a toolmaker. He joined British Rail 35 years ago and ended up running
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