UPDATED: Freightliner to withdraw entire electric fleet

Freightliner has confirmed that it will be withdrawing its entire fleet of electric locomotives in response to soaring electricity prices.

The company, which is the largest UK freight operator of electric locomotives, says it has been forced to replace its 23 Class 90s with diesel traction following a steep rise in wholesale electricity prices of more than 200% between September and October.

Although such a move has caused dismay in terms of its environmental implications, FL argues that the alternative would have been to pass on the enormous price rises to its customers.

This would have injected further costs into a supply chain that is already under increased pressure to keep shelves stocked in the run-up to Christmas, and which is suffering from a chronic shortage of HGV drivers.

A Freightliner spokesman said: “As a result of an unprecedented increase in electricity prices, FL has taken the difficult decision to temporarily replace its electric freight services with diesel-hauled services in order to maintain a cost-effective solution for transporting essential goods and supplies around the UK.

“Rail remains the most carbon-efficient way to transport freight around Great Britain, even with diesel locomotives. Each tonne of freight moved by rail instead of road reduces CO2 emissions by 76%.”

According to senior industry sources, the issue is unlikely to be confined to Freightliner, with most other non-franchised freight and open access operators facing a similar dilemma.

That is because of the way in which operators of electric traction are given a choice to either agree fixed costs with Network Rail for their electricity supply or to accept the market price each month (see panel).

RAIL understands that a majority of franchised passenger operators fall into the former category and are therefore currently protected against the recent sharp price increase. Any franchised operators which do not have a fixed price contract would also be able to pass on any cost increase directly to government.

But for Freightliner and other operators in the latter category, which may previously have had fixed rate contracts that have since expired, they must now try to find a way to absorb the price hike, pass it on to customers, or to avoid it completely by switching to an alternative (albeit more polluting) fuel source.

Official government policy is to deliver a net zero emissions rail network by 2050. Published in July, the Transport Decarbonisation Plan restates an ambition to remove all diesel traction from the railway by 2040 and to invest in increasing the proportion of rail freight hauled by electric traction.

Rail unions also rounded on ministers to intervene in the energy “omnishambles”, with ASLEF General Secretary Mick Whelan calling on the Government to “do the right thing for people, the right thing for business, and the right thing for our rail network. Because it is also the right thing for our planet.”

In response to the wider energy crisis, the Department for Business, Energy and Industrial Strategy (BEIS) told RAIL: “This ​temporary decision is a commercial matter for private sector freight operators. We fully recognise business’ concerns around increasing energy prices, and the Government is engaging with industry on a regular basis. Our priority is to ensure costs are managed and supplies of energy are maintained.”

N: Full coverage in RAIL 942 (on sale digitally October 16 and in print October 20).