Regarding domestic intermodal sector growth, retailers tend to be uneasy dealing with FOCs directly. Sometimes this is due to not having a clear understanding of what is involved, but more poignantly due to a perceived fear of their goods not being delivered on time, in full (OTIF). Unlike the traditional bulk sectors, which are more ‘volume’ than ‘time’ sensitive, domestic intermodal customers expect right time deliveries to the minute. It is much easier for them to employ a 3PL (third party logistics) supplier that will provide a turnkey contract and take on the delivery and volume risks. Risk of delivery failure is managed by transferring to road at short notice.
Similarly, a few too many containers to fit on a train but which are still required tomorrow can be sent by truck. For this reason companies such as Malcolm’s, Russell’s and Stobart, with their large HGV fleets, can succeed where the FOCs struggle. Better marketing of rail’s capability might motivate logistics managers a little more, but until our rail infrastructure is fully fit for purpose with the capability, capacity and resilience which the retailers demand, it will continue to be a difficult sector to grow, even with the 3PLs as intermediaries. The road-orientated retail sector needs to have the confidence that rail will not only deliver OTIF, but more and more it is looking for deliveries seven days per week - two big challenges for rail freight.
The DfT’s forecast growth in the automotive sector is disappointing, yet there are potential opportunities (such as JCB) which should be explored further. For example: JLR’s Land Rover plant at Solihull, the second biggest UK car exporter, is just two miles from the Coventry to Birmingham main line with no built-up area in between. A new terminal and short branch line could provide rail freight with the prospect of moving over 300,000 vehicles per annum. And do all the cars arriving at Sheerness need to go on to the rest of the UK by road?
On a similar stance, the UK is the German car industry’s biggest European customer and the majority of its production is based in the southeast of the country. A 650-mile rail journey via the Channel Tunnel to a central UK shared PDI (Pre-delivery Inspection) location correlates well with rail freight’s key strengths, and should be more economic on a door-to-door basis than rail to port to ship to port to the UK hinterland.
The Rail Freight Strategy has laudable objectives. But for rail freight to grow, while the DfT must make sound decisions to deliver best value for the taxpayer, it must also make informed decisions that provide best value to rail freight service providers. This means prioritising projects correctly, taking a truly strategic outlook, safeguarding existing scarce resources, and recognising the environmental value of rail freight.
It also needs to acknowledge that new-to-rail business, which is to the benefit of UK plc, often requires capital investment to get a project off the ground. This is particularly relevant to building new terminals.
