Peer review: Nick Gallop
Managing Director, Intermodality Ltd
Despite significant progress by Government, the industry and end users, much work remains to be done if the untapped potential for rail freight is to approach anywhere near the level of forecast growth.
Where there was once only one choice of rail freight haulier (BR), now there are several to choose from. Yet most of these will source their wagons and locomotives from the same places, have traincrew on similar terms and conditions, and obtain broadly the same rates for fuel and track access.
If each is to grow their own market, rather than simply poach customers from each other in a race to the bottom on price, the challenge will increasingly be to differentiate - on performance, or margins, or individual service offers based on different types of traction, rolling stock and bolt-on value-added services, such as terminals and road haulage.
With most of the traditional core traffic flows in the bulk sectors being mature or potentially in long-term decline, there are several new markets to tap for rail in the non-bulk sector, including sectors where rail used to have a presence. These will require new mindsets as much as service offers, as the customer requirements can be more demanding, while current traction and rolling stock may not be suitable or in sufficient supply – examples include car-carrying wagons, high-cube conventional wagons and high-speed wagons. Cracking these markets will require a bold and highly entrepreneurial view on performance, as well as investment risk.
There is no doubt that the work being done by Network Rail on upgrading the rail network to cater for taller and longer trains is yielding results that Government cost-benefit analysis would not have predicted. No one is denying that such works require significant levels of investment. Yet comparisons with other countries repeatedly indicate that the cost of maintaining and enhancing the GB rail network remains stubbornly high, suggesting further work is needed to embrace global best practice without compromising safety.
In parallel, recent reductions in cross-Channel access charges should help stimulate this obvious but under-performing sector of rail freight. Yet this alone will only achieve so much if it remains stubbornly difficult to secure reliable train paths through France, or in turn to achieve seamless pan-European (and now pan-Eurasian) transits that can compete head-on with road haulage and shipping.
The ports have shown how investment in rail facilities can make a significant contribution to smoothing the flow of freight through major import and export gateways.
Where the planning system has allowed, so too have property developers, with inland terminal developments such as DIRFT and Hams Hall. It is hoped that the new planning regime, which has helped expedite consent for the third major expansion phase of DIRFT, will be similarly able to process other inland terminal projects in a similar fashion, to once again create a vibrant and well-populated network of inter-connected terminals, able to reinvigorate the market for domestic rail freight.
Maggie also refers to speed, which should be one of rail’s key unique selling points, particularly in the face of a congested road network and retailers wanting to achieve the holy grail of ecommerce – same-day delivery. 25mph is simply not good enough when trucks can average twice this speed, and freight trains can travel at up to four times this speed when allowed.
Speed is a challenge for timetabling planning, traction and rolling stock, but get it right and road haulage won’t be able to come close!
