Is Railfreight a true privatisation success?

[daccer]

I have noticed a step up recently in the amount of times Railfreight has been held up as a one of the successes of privatisation. On the face of it this does seem to carry some water as some of the main aims of privatisation such as competition, innovation and a more adroit customer focus does seem to be met by the current crop of railfreight operators.

The market has grown in terms of tonne/kms and I did see that in the first quarter of 2013 tonnage lifted had gone up quite sharply. So a secondary question I suppose is what more can be done to keep these trends on a positive upwards course and is the current set up the correct way to proceed?

 

[NSEFAN]

Unlike passenger services, there is more scope for freight operators to compete as they do so on individual flows of traffic. Such a thing isn't so easy for TOC franchises which are quite prescriptive and regional. The lack of capacity on many popular routes also makes frequent open access passenger services difficult to fit in, whereas it might be easier to squeeze in a couple of off-peak paths for freight.

One thing we don't really see anymore is wagonload services like Speedlink. I understand that BR Railfreight never really made any money on these operations, with all the profits coming from the longer trainload services.

I think that rolling highways may become a feature of our railway network, in order to reduce road congestion. This would obviously need massive gauge clearance works to take place on the affected routes, but as the population increases and roads get busier, I reckon it will eventually become inevitable.

 

[Beveridges]

I don't think Railfreight has been a success as so much traffic has been lost.

Coal trains are now moving further than before due to coal being imported. That screws the statistics up and makes it look like there has been a huge upturn in coal.

Coal has and always will go by rail regardless of who is running it - BR or private company.

Other types of traffic have decreased - certain types in particular (royal mail and wagonload / "enterprise") almost completely disappear! - but we also have seen FOC's such as Fastline Freight / Victa West Link / Fragonset Freight (Remember them ?!!) / Advenza Freight Ltd go out of business altogether and lose everything!! The freight went with them - In most cases it did not transfer to another FOC, but went back to road!!

On the other hand we have seen companies such as DRS / GBRf / Colas Rail / Freightliner Heavy Haul start with almost no traffic at all and grow to where they are today. But most of their traffic came from EWS / DB Schenker - very little of it came from the roads!

Success stories such as the Class 70 Powerhaul have only had limited impact, if any.

DB Schenker is a small fraction of the size it used to be in the early EWS days when Loadhaul / Mainline / Transrail / RfD / Res were merged together, so much traffic has been lost, many marshalling yards that were once so busy are now so quiet they look like they have closed down! Warrington Arpley for one.

We also have the German state railway taking profits from UK railway while if this was BR that money would have gone to the government, so there would have even more money to waste on stupid things like wars and mass immigration!

Nothing about it shouts "success" - I think if we still had Loadhaul, Transrail & all instead of todays shower of s**te we wouldn't be any worse off than we are now.

 

[The Planner]

Considering the freight operators are working on margins of 2 or 3% with no subsidy they are doing very well in my opinion.

 

[transmanche]

money would have gone to the government, so they would have even more money to waste on stupid things like wars and mass immigration!

Interesting that you think the government somehow spends money on 'mass immigration'. When it's actually the (mainly young) immigrants who are working, paying taxes and paying NI in order to pay the pensions of our ageing population.

 

[Tiny Tim]

Growth in rail freight over the last thirty years has been sporadic at best, and not anything like as impressive as passenger increases. For most of it's life BR was constricted by irksome statutory obligations which knocked any profit out of freight. Today's privatised operators are free to carry on an entirely commercial basis, their only real handicap being Network Rail's ability to accommodate them in terms of pathing and gauge. There are various measures of freight traffic, none of which exactly scream success, but my feeling is that, overall, the privatised freight operators are doing well in a difficult market. It's almost impossible to say whether BR, fully divested of it's obligations as a common carrier, could have done the same. I think that freight privatisation has been mildly successful, and much better than any other aspect of the whole privatisation shambles.

 

[ex-railwayman]

Latest ORR data shows 7.59m lorry journeys avoided in 2012-13 by using rail freight, up 10.0% on the previous recording, so, moving freight by rail seems to be getting better, but, of course it didn't state all of the commodities that were carried.
We now have 30 wagon oil/petroleum trains rumbling across the rail network because we have the locomotives to haul them, we never saw anything that size in the 70's, 80's and 90's. Due to the economy of the last 25/30 years and the demise of Coal Mining, Shipbuilding, Steel works, etc, etc, the amount of traffic that's disappeared is immense, and the closure of marshalling yards, etc, is quite saddening, however, Rail Freight Group are still promoting the Chunnel Tunnel Crossing and the construction of yards/ports for the expansion of Intercontinental traffic, the London Gateway Logistics Park, for example, so, as long as competition within the industry stays healthy, they can keep lorries off British roads, which pleases the motorists and environmentalists, alike.

Cheerz. ex-railwayman.

 

[Beveridges]

We now have 30 wagon oil/petroleum trains rumbling across the rail network because we have the locomotives to haul them, we never saw anything that size in the 70's, 80's and 90's

I don't know how you can say we *now* have 30 wagon petroleum trains, they've been around for decades.
The locomotives that haul those trains are invariably Class 60's which have been around for over 20 years, and even before them we had 2X 37's on those 3000 tonners in the 1980's. It's hardly a recent thing.

They are also really, really slow with that load. I don't know how they get the paths in todays railway that is full of super fast voyagers and turbos.

 

[GB]

Considering the freight operators are working on margins of 2 or 3% with no subsidy they are doing very well in my opinion.

Don't know about other freight sectors but Intermodal certainly receive a subsidy. Something along the lines of £20 per container from the government IIRC.

Doesn't sound alot but it can make all the difference to making a service worth while.

 

[tbtc]

Handy for freight operators that they aren't hamstrung by having to meet franchise obligations like late night/ Sunday/ rural services (e.g. no time wasted on things that aren't profitable).

A lot of the changes to freight over the past twenty years are more to do with the changing nature of cargo - e.g. coal now comes from ports rather than from places like Yorkshire/ Gwent.

At the same time, there seems to be more/bigger lorries on the motorways than I can remember.

So it's not just "has rail increased its volume" or "has rail increased its distance" but "has rail kept up with the overall market".

 

[edwin_m]

Don't know about other freight sectors but Intermodal certainly receive a subsidy. Something along the lines of £20 per container from the government IIRC.

Doesn't sound alot but it can make all the difference to making a service worth while.

Do you have a source for that?

There are various grants for facilities and a favourable access charge regime for freight but I'm not aware of a straight subsidy. In any case, according to a discussion on another topic here last week, the road charges paid by road hauliers don't anywhere near pay for the damage caused by road vehicles so a subisdy for rail would just be levelling the playing field.

 

[GB]

I think it is the Mode Shift Revenue Grant.

https://www.gov.uk/government/publi...re-grant-funding-to-transport-freight-by-rail

I don't know how it works or to what value, but I have been told by my company that they do receive money from the government for containers moved by rail.

 

[The Planner]

They are also really, really slow with that load. I don't know how they get the paths in todays railway that is full of super fast voyagers and turbos.

Because they have just as many rights as the passenger operators and therefore you find paths for them. TOCs are well aware of how fixed some freight paths can be and the consequences of moving them.

 

[HSTEd]

Privatised railfreight has been a disaster.

It has gone from a net benefit to one of the largest subsidy junkies of all.
(And remember although the Modal Shift Grant is small, there is still the enormous Network Rail derived indirect Subsidy)

 

[NSEFAN]

Privatised railfreight has been a disaster.

It has gone from a net benefit to one of the largest subsidy junkies of all.
(And remember although the Modal Shift Grant is small, there is still the enormous Network Rail derived indirect Subsidy)

What indirect subsidy is this? Lower access charges of some kind?

 

[HSTEd]

What indirect subsidy is this? Lower access charges of some kind?

Yes, the access charges charged to operators on the railway do not cover Network Rail's costs.
This is the reason why Virgin can claim it net pays premiums to the taxpayer and yet is actually a huge subsidy drain overall.

 

[NSEFAN]

Yes, the access charges charged to operators on the railway do not cover Network Rail's costs.
This is the reason why Virgin can claim it net pays premiums to the taxpayer and yet is actually a huge subsidy drain overall.

I see. Such is the art of creative accounting, I guess.

Out of interest, are you talking about all of Network Rail's costs, including ones which can't be attributed to the running of trains?

 

[HSTEd]

I see. Such is the art of creative accounting, I guess.

Out of interest, are you talking about all of Network Rail's costs, including ones which can't be attributed to the running of trains?

The subsidy is so large that simply discounting activities as 'not attached' to the railway operation does not significantly reduce it.
It really is a mess.

 

[Tiny Tim]

All the train operators, freight and passenger, benefit from rail access charges that total less than Network Rail spends. I think the OP's definition of 'success' was intended to be within these (admittedly distorted) parameters. NR actually borrows money over and above their income and direct subsidy (there's another post on this subject). Governments have been forced to accept that the railways require support from the public purse, the alternative is Serpell Option A.

 

[Teaboy1]

Don't know about other freight sectors but Intermodal certainly receive a subsidy. Something along the lines of £20 per container from the government IIRC.

Doesn't sound alot but it can make all the difference to making a service worth while.

I am a bit lost on this statistic, £20 per container x [say] 20 containers is only £400, now given wages, NetWork Rail fee, fuel, depreciation, servicing, build costs, etc that is not going to go far IMHO!! Hardly worth getting a loco ready unless they charge another £80 / container AND the subsidy on-top.

Please explain a wee bit more [£20/container/mile] sounds grossly excesive going the other way??

 

[chuckles1066]

When I was a trainspotting youth, I always remember waiting to see a train at 8.45p.m on a Friday that was ridiculously long and consisted entirely of new cars and vans.

Do new vehicles get moved via rail these days?

 

[yorksrob]

I suppose the issue is how successful railfreight is compared to other sectors. Particularly where other sectors are perceived as wasteful and may face cuts as a result.

 

[GB]

I am a bit lost on this statistic, £20 per container x [say] 20 containers is only £400, now given wages, NetWork Rail fee, fuel, depreciation, servicing, build costs, etc that is not going to go far IMHO!! Hardly worth getting a loco ready unless they charge another £80 / container AND the subsidy on-top.

Please explain a wee bit more [£20/container/mile] sounds grossly excesive going the other way??

The subsidy is on top off the normal charges the freight operator charges the customer.

The cost to the customer to rail a container varies significantly from less than £100 to £100s of pounds.

 

[edwin_m]

I've just Googled the Mode Shift Revenue grant and found this guidance:

http://www.google.co.uk/url?sa=t&rc...Kh_G0Kr8lFjEqVg&bvm=bv.49784469,d.d2k&cad=rja

The grant is only payable for intermodal traffic and reimburses the cost difference where rail is more expensive by road. However it is only paid if justified by a calculation based on rates for removing HGV movements from different types of roads. Thus it is arguably directly linked to the environmental benefits of using rail.

There are also capital grants available for freight facilities.

 

[RichmondCommu]

When I was a trainspotting youth, I always remember waiting to see a train at 8.45p.m on a Friday that was ridiculously long and consisted entirely of new cars and vans.

Do new vehicles get moved via rail these days?

Yes, some do but sadly the two biggest manufacturers in this country (Nissan and Toyota) don't.
--- old post above --- --- new post below ---

I've just Googled the Mode Shift Revenue grant and found this guidance:

http://www.google.co.uk/url?sa=t&rc...Kh_G0Kr8lFjEqVg&bvm=bv.49784469,d.d2k&cad=rja

The grant is only payable for intermodal traffic and reimburses the cost difference where rail is more expensive by road. However it is only paid if justified by a calculation based on rates for removing HGV movements from different types of roads. Thus it is arguably directly linked to the environmental benefits of using rail.

There are also capital grants available for freight facilities.

Whilst in principle this is an excellent initiative, is there anything that stipulates whether these facilities actually have to be used? A rail served freight terminal has opened at Castle Donnington and yet no one is using it! Now given that it’s the only freight terminal in the East Midlands this is very worrying.

Another rail served freight terminal is planned for the Derby to Stoke line at Burnaston (where the Toyota car plant is). And yet one wonders whether developers are only planning to have it rail connected in order to get their sticky paws on the grant money. Toyota has shown no interest in the past in using the railways so the omens are not good!
--- old post above --- --- new post below ---

I suppose the issue is how successful railfreight is compared to other sectors. Particularly where other sectors are perceived as wasteful and may face cuts as a result.

Sorry I'm being a bit thick here! What other sectors are you referring too?

 

[yorksrob]

Sorry I'm being a bit thick here! What other sectors are you referring too?

Specifically, the Regional passenger railway, which tends to be lumbered with the heavily subsidised label.

 

[RichmondCommu]

Specifically, the Regional passenger railway, which tends to be lumbered with the heavily subsidised label.

The problem is, how do you decide between the two? On the one hand you have the Cumbrian Coast line serving rural communities and the likes of Barrow and Workington where employment opportunities are not the greatest.

On the other side, subsidising intermodal freight helps to keep HGV's off the M6 (which of course passes through Cumbria!). I think the only answer is that both have to be continued to be subsidised. In other words my season ticket is paying for the Cumbrian Coast

 

[yorksrob]

The problem is, how do you decide between the two? On the one hand you have the Cumbrian Coast line serving rural communities and the likes of Barrow and Workington where employment opportunities are not the greatest.

On the other side, subsidising intermodal freight helps to keep HGV's off the M6 (which of course passes through Cumbria!). I think the only answer is that both have to be continued to be subsidised. In other words my season ticket is paying for the Cumbrian Coast

Precisely. They both use the same railway network, however, whenever anybody talks about the costs of that network, i.e. staffing, maintenance, signal boxes etc, this always seems to be attributed to the regional passenger railway with the implication that it is costing too much along with all the negative connotations in terms of McNulty etc. Freight is perceived as "profitable" so it doesn't accrue this negative association, even though the reality is that neither cover the cost of the infrastructure and require a certain amount of subsidy.

 

[9K43]

I went through British Rail, Yorkshire Frieght Area,EWS and DB.
With every company I saw many staff reductions, frieght jobs disappear, waggons went by the thousands , so did many yards.
We had managers that were incompetent and dicipline mad.
I think the words et tu brutus come to mind.
We had Schoolboys for managers, who did not know what the curley bit on the shunt pole was for.
Running up big taxi bills and sacking groundstaff by the 1000's
I took the money and ran. I still have my Staff Travel Documents every year, which are worth having, plus my 60 + bus pass so life aint to bad.
I now go sequence dancing after 5 years of learning, 3 continental holidays a year, but I yearn for a Charter from Warrington to Newcastle on a summers night and home pass. 2on the buzzer and off we go.

 

[RichmondCommu]

I went through British Rail, Yorkshire Frieght Area,EWS and DB.
With every company I saw many staff reductions, frieght jobs disappear, waggons went by the thousands , so did many yards.
We had managers that were incompetent and dicipline mad.
I think the words et tu brutus come to mind.
We had Schoolboys for managers, who did not know what the curley bit on the shunt pole was for.
Running up big taxi bills and sacking groundstaff by the 1000's
I took the money and ran. I still have my Staff Travel Documents every year, which are worth having, plus my 60 + bus pass so life aint to bad.
I now go sequence dancing after 5 years of learning, 3 continental holidays a year, but I yearn for a Charter from Warrington to Newcastle on a summers night and home pass. 2on the buzzer and off we go.

The thing is though a lot of this can attributed to the decline of coal industry in Yorkshire and more specificaly the steel industry in Sheffield. Healey Mills seemed to be very dependent on coal traffic and Tinsley on the steel industry. I'm sure you'll correct me if I'm wrong
--- old post above --- --- new post below ---

Precisely. They both use the same railway network, however, whenever anybody talks about the costs of that network, i.e. staffing, maintenance, signal boxes etc, this always seems to be attributed to the regional passenger railway with the implication that it is costing too much along with all the negative connotations in terms of McNulty etc. Freight is perceived as "profitable" so it doesn't accrue this negative association, even though the reality is that neither cover the cost of the infrastructure and require a certain amount of subsidy.

MGR traffic in Notts and Yorks was quite rightly regarded as 'easy money' and didn't require a subsidy. Of course that has all gone now.