The influential representative body in the UK, the Rail Freight Group (RFG), has issued a warning over the radical reform of Britain’s railways. RFG has said that the UK government’s nationalisation plan is aimed at bringing infrastructure and passenger services under public management, a so-called track and train reorganiastion. However, RFG says the reforms need to also address the success of rail freight.
In a current editorial, written by Alex Kirk, RFG board member and commercial director at GB Railfreight, the Group argues that the everyday role played by freight is rarely seen by the travelling public or decision makers. However, RFG says freight trains deliver everything from aviation fuel into Heathrow, to moving containers from ports into distribution centres serving communities across Britain.
Supporting business and community
Kirk says he has spent much of his career working with customers that depend on rail freight. “I’ve seen first-hand the difference the railway can make when it delivers a reliable and competitive service. I’ve also seen how quickly customers look elsewhere when it doesn’t,” he said. “That is why rail reform matters. The creation of Great British Railways (GBR) presents a genuine opportunity to build a more joined-up and accountable railway. Done well, it can support economic growth, attract investment and help Britain meet its environmental ambitions.
“A commuter train supports communities and local economies. Equally, a freight train carrying aggregates may support the construction of thousands of homes. A container service linking a deep-sea port to an inland terminal can keep manufacturers supplied and supermarket shelves stocked. Freight trains carrying steel, fuels, biomass and consumer goods play a critical role in supporting economic activity across Britain.”
Business proposition good
The UK government is working towards its ambition of reversing the privatisation of the railways. That means largely taking full ownership of the many passenger franchise operations, when their contracts run out. However, the freight sector will remain in private hands. Indeed, the sector remains an attractive proposition to investors. Some operators have recently been bought out by multinational interests – including shipping lines.
The motives for these takeovers vary, but have generally been about vertical integration of logistics chains. Notable moves recently have been by shipping lines like MSC (ultimate owners of Maritime Transport) and CGM CMA, which has acquired the intermodal interests of Freightliner. DB Cargo UK is currently up for sale. These are all commercial decisions made for financial reasons, and that holds for customers as well, argues Kirk. “Those customers are deciding how to move their products, where to invest their capital and how to design their supply chains,” he added. “In most cases, rail is not competing with another rail operator. It is competing with road. That is why network access matters so much.”
Unpredictable disruption bad
Kirk believes that the rail freight sector has been one of the railway’s great investment success stories. “Freight operators, customers and investors have committed hundreds of millions of pounds to locomotives, wagons, terminals and technology without relying on taxpayer funding,” he says. “At GB Railfreight alone, we are investing £150 million in a fleet of new Class 99 bi-mode locomotives. Across the sector, ports, construction companies and logistics businesses continue to back rail because they see it as an efficient and dependable route to market.
“I’ve never had a customer tell me they use rail because they want to support the railway. They use it because it helps them run their business better. It allows them to move large volumes efficiently, reduce road mileage, improve sustainability and build supply chains they can rely on. They move when reliability becomes unpredictable, disruption becomes too frequent, or access to the network becomes more uncertain. Once a customer redesigns a supply chain around road haulage, winning that traffic back can take years, if it happens at all,”
The rights and wrongs
None of this is an argument against reform, says Kirk. He says the more positive desire is to get reform right. “GBR has the opportunity to create a framework that gives freight customers, operators and investors confidence for the long term,” he says. “That means recognising freight as an integral part of the railway, protecting fair access to the network, considering the needs of national supply chains when planning disruption and ensuring freight has a strong voice in strategic decision-making.
“Reform should build on that success, not undermine it. Ultimately, customers do not care about governance structures or organisational charts. They care whether the railway can deliver for their business. If GBR creates the conditions for freight growth, investment and innovation, the whole country will benefit. Get it right, and freight will continue to take lorries off the road, support industry and help grow the economy. Get it wrong, and customers will look elsewhere. That is why rail reform will only succeed if freight succeeds.”