DDRF ANNUAL CONFERENCE
Creating a stable policy environment for freight
At the DDRF annual conference 2013, Rail Freight Group executive director, Maggie Simpson, set out the obstacles and opportunity for freight.
F
reight has some massive opportunities ahead to consolidate growth and help the UK attract large-scale investment. Speaking at the DDRF’s annual conference 2013, Maggie Simpson, RFG executive director, welcomed the “huge amount” of private sector and Government funding, with the promise of more to come.
But there are also substantial challenges, which she set out with detail and clarity. Issues ranged from capacity, effi ciency and policy, to shared resources and integration into the logistics sector.
In terms of effi ciency, Simpson highlighted the “woeful” average speeds attained by rail freight in the UK — 25mph. Companies seeking to use freight to transport their goods want their services faster, with quicker turnaround times for effi cient business.
“We’re miles apart on some of this. We’ve got to get that better,” she said.
two on a Sunday. Trying to get this sorted was diffi cult, she said, when “we spend our time arguing”. She highlighted diversionary routes which were available, if engineering work could only be aligned more effectively.
Safeguarding capacity
Certain areas would demand new capacity, such as the Felixstowe to Nuneaton cross-country corridor and the “massive work programme” at Leicester planned for CP5 to make space for freight as well as passenger traffi c.
Simpson added that the “enormous” new port, London Gateway, would be a game-changer for the intermodal market.
“We think that we’ve got all the answers and we haven’t. We haven’t even got 2% of the answers when it comes to the logistics sector.”
growth would be essential. Making the most of what we’ve got
One of the most pertinent issues on the RFG’s agenda is the lack of capacity to run freight services quickly and effi ciently.
Simpson explained: “We’re moving from freight fl ows that have been going on the backwaters of the UK rail network, onto fl ows trying to compete on the mainline of the network with passenger services. If we’re going to get serious about taking that business off the roads, we’re going to have to have the capacity to do that.”
This will involve making more of what’s currently available, with longer and more frequent services, plus better planning of engineering works. Ensuring both passenger services and freight can benefi t is important, she said.
Simpson was not calling for services running 24/7 but her ambition is not far off: “We’ll settle for 20/6, possibly 20/6.5. There’s capacity out there that’s doing nothing.”
The Felixstowe branch line, for example, is full at 29 trains a day in each direction, but only
24 | rail technology magazine Feb/Mar 13
“If you’re building capacity for freight, it would be really nice to know that when we need it we can use it. At the moment there isn’t any effi cient way of safeguarding capacity for freight, even when it’s been built for freight.”
Making it easy to invest
A “surprising number” of companies within the private sector are willing to invest, but the freight industry makes it “phenomenally diffi cult” due to a lack of confi dence and certainty in the future. This confusion and indecision is putting off international players, who could easily spend their money elsewhere.
“All they want to know is that if they put their money in, they’ve got a good chance of making a return on it. It’s not really rocket science.
“We’ve got to start building back up their confi dence that the UK rail freight sector is a good place to invest.”
This could be secured via a more stable policy environment that follows a single course of action for a sustained period of time.
She acknowledged that this was complicated but said it was a challenge the industry had to grasp. Access to current capacity is also a problem, and planning freight services to manage
Maggie Simpson gives RTM her views on the ORR’s decision on CP5 rail access charges.
In reaching its conclusions on rail freight access charges for the next control period, ORR has clearly taken notice of some of the feedback from the industry. For power station coal, the proposed new ‘Freight Specifi c Charge’ has been set at the lower end of the range which was consulted on, and the charge will also be phased in. There is no doubt this is helpful, but the charge still represents a large increase over current levels. The Scottish domestic coal producers are particularly concerned as, being further from the English power stations than many ports, their products are likely to suffer the greatest disadvantage, and we know they are still considering the impacts these changes will make.
For most other commodities, ORR have attempted to provide certainty through a cap on charges of 23%. Whilst this looks reasonable at one level, it still means that there is the potential for access charges to increase quite signifi cantly below that level, and it may be some time yet before we know in any detail what the actual charges will be. Of course, businesses have to be able to deal with increases to all their costs, but generally these are small year-on-year rises, and not big step changes which can be destabilising. There is no attempt to phase these increases or to limit them only to small percentages.
Elsewhere, there is still a lot of work on- going on charges, such as capacity charges, coal spillage charges and the performance regime, and we remain concerned, as we have been throughout, at the lack of a holistic approach which seeks to understand the overall fi nancial affordability of the sector and also identify the really important things which ORR wants to incentivise as priorities. The current piecemeal approach risks a number of perverse, and expensive outcomes.
Why are ORR’s conclusions disappointing for the rail freight sector?
© Paul Bigland
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