Why Is Railfreight So Expensive?

[RichmondCommu]

G'day everyone,

Intermodal traffic is peddled as being the way forward for rail freight in this country and yet the FOC's are struggling to retain traffic. I can only assume that this is because rail freight is not competitive and I would be interested to know why this.

Your thoughts would be very welcome!

Regards,

Richmond Commuter.

 

[6Gman]

Surely it's the contrast between loading a lorry at Point A then driving it to Point B and the unloading it,

as against:

Loading a lorry at Point A then driving it to Point X where it is transferred to a train, which runs to Point Y where it's transferred back to another lorry to take it to Point B.

The Beeching Report is interesting on this subject, and shows how the principles of railway operation have changed but little in 50+ years.

 

[Moonshot]

Not quite sure where you get the idea that freight is struggling.....

ORR data shows sustained growth in rail freight usage

The Office of Rail Regulation (ORR) has today published a new statistical release which highlights growth in Britain’s rail freight sector.

The 'Freight Rail Usage' statistical release contains information on rail freight in Great Britain covering the period from 1999-00 to 30 September 2013. Freight usage data provides a useful barometer of economic activity and is closely linked to other industries such as manufacturing and imports/exports. The data for 2013-14 Q2 (1 July 2013 to 30 Sep 2013), when compared to the same period last year, shows:

Britain’s rail network carried a greater amount of freight, with an 8.9% rise in freight moved to a total of 5.7bn net tonne kilometres.
The amount of coal moved increased by 15.6% to 2bn net tonne kilometres – accounting for 35.4% of total freight moved on the network.
Oil and petroleum, international and metal moved increased by 11.8%, 7.9% and 2.8% respectively.

 

[RichmondCommu]

Surely it's the contrast between loading a lorry at Point A then driving it to Point B and the unloading it,

as against:

Loading a lorry at Point A then driving it to Point X where it is transferred to a train, which runs to Point Y where it's transferred back to another lorry to take it to Point B.

The Beeching Report is interesting on this subject, and shows how the principles of railway operation have changed but little in 50+ years.

Agreed but the railways are losing Intermodal traffic, not wagon load traffic. Trains fully loaded with containers are no longer running and I can only assume that this because they are making a loss. And yet Intermodal is supposed to be the way forward.

 

[Moonshot]

Have a look at the figures for domestic intermodal on the link below....

http://dataportal.orr.gov.uk/displayreport/report/html/79c33859-004c-486b-b752-cd485b1dba96

 

[RichmondCommu]

Not quite sure where you get the idea that freight is struggling.....

ORR data shows sustained growth in rail freight usage

The Office of Rail Regulation (ORR) has today published a new statistical release which highlights growth in Britain’s rail freight sector.

The 'Freight Rail Usage' statistical release contains information on rail freight in Great Britain covering the period from 1999-00 to 30 September 2013. Freight usage data provides a useful barometer of economic activity and is closely linked to other industries such as manufacturing and imports/exports. The data for 2013-14 Q2 (1 July 2013 to 30 Sep 2013), when compared to the same period last year, shows:

Britain’s rail network carried a greater amount of freight, with an 8.9% rise in freight moved to a total of 5.7bn net tonne kilometres.
The amount of coal moved increased by 15.6% to 2bn net tonne kilometres – accounting for 35.4% of total freight moved on the network.
Oil and petroleum, international and metal moved increased by 11.8%, 7.9% and 2.8% respectively.

The amount of Intermodal that has been lost in the last 12 months gives me all the ideas that I need. Traffic in and out of Teesport being a case in point. I'm interested to see that your figures don't include Intermodal traffic.

 

[Moonshot]

if its losing share as you say, then why is it that Dubai World Ports recently opened a new terminal in east London? Why would Peel Group want to build Port Salford as well as enhance the capacity in Liverpool?

 

[deltic]

Railfreight is very competitive over any length of distance - short or long where both producer and supplier are rail connected - the classic is coal from mine or port to power station. When we still had a coal industry many of these flows were very short in terms of distance.

There are lots of reasons why rail struggles elsewhere. One there is rarely a backhaul so almost half the freight trains on the network are empty - this compares poorly to road where empty running has declined considerably in recent years although I recall around a quarter of all HGVs are also running empty. Second is the need to double or triple handle goods. So goods have to be moved by road from factory to rail terminal and from rail terminal by road onward to the customer's warehouse. The cost of this triple handling of goods reduces rail's ability to compete dramatically except on very long distance hauls which we dont tend to have in this country. Traffic from ports means only one additional transhipment is needed which improves rail competitiveness of shorter distances. Third the sheer volume of goods that need to be carried from A to B on a train means there are not that many freight flows available which rail can easily compete for. The big growth in UK freight has been white vans - small flows from lots of places to lots of other places - rail cant compete in this market. HGV traffic has been declining or static for many years

 

[GB]

Agreed but the railways are losing Intermodal traffic, not wagon load traffic. Trains fully loaded with containers are no longer running and I can only assume that this because they are making a loss. And yet Intermodal is supposed to be the way forward.

There's plenty of services running fully loaded with intermodal. Indeed some of ours are running with more containers than usual....60 odd vs 50 odd.

Intermodal also has peaks and dips through out the year and is closely related to the amount of output form the like of china etc etc.

 

[RichmondCommu]

if its losing share as you say, then why is it that Dubai World Ports recently opened a new terminal in east London? Why would Peel Group want to build Port Salford as well as enhance the capacity in Liverpool?

Is that new traffic or is it simply being switched from one port to another? I suspect the latter as I doubt that imports have increased by that much. Unless of course you know different.
--- old post above --- --- new post below ---

There's plenty of services running fully loaded with intermodal. Indeed some of ours are running with more containers than usual....60 odd vs 50 odd.

Intermodal also has peaks and dips through out the year and is closely related to the amount of output form the like of china etc etc.

In which case why are fully loaded Intermodals being cancelled?

 

[Moonshot]

Is that new traffic or is it simply being switched from one port to another? I suspect the latter as I doubt that imports have increased by that much. Unless of course you know different.

Im only going off what is freely available on the internet.....I gave you the link to the report from the ORR.

Part of HS2s business case is the transfer of road freight to rail.....which is why the Road Haulage Association are none too keen....

 

[GB]

Is that new traffic or is it simply being switched from one port to another? I suspect the latter as I doubt that imports have increased by that much. Unless of course you know different.
--- old post above --- --- new post below ---


In which case why are fully loaded Intermodals being cancelled?

A train can be cancelled for any number of reasons. But if it's a fully loaded intermodal that has been cancelled then it's probably some sort of service disruption as apposed toa loading issue.

 

[RichmondCommu]

Im only going off what is freely available on the internet.....I gave you the link to the report from the ORR.

I'm curious to know why you haven't answered my question regarding Thames Gateway or Port Salford? Do you have any evidence to suggest that they will generate new freight traffic to the railway, as opposed to container ships simply transferring to a different port?

Part of HS2s business case is the transfer of road freight to rail.....which is why the Road Haulage Association are none too keen....

Given that the Road Haulage Association would rather have more money spent on our road network that is hardly surprising. I'm well aware of HS2's business case but it's difficult to see where all of this extra freight traffic is going to come from.
--- old post above --- --- new post below ---

A train can be cancelled for any number of reasons. But if it's a fully loaded intermodal that has been cancelled then it's probably some sort of service disruption as apposed toa loading issue.

Yes I understand this. However I''m refering to Intermodal services which have been axed completely in which case I don't see why service disruption would be a factor.

 

[Moonshot]

I ve not avoided any question .....I ve given you links to the evidence, make of it what you will. But as far as I can see , intermodal freight is on the increase, and the political will is very evident to transfer freight from roads onto rail as I stated via the HS2 buisness case.

http://en.wikipedia.org/wiki/Port_Salford

Now can you provide some evidence which backs up your statement of " Why is railfreight so expensive "?

Clearly railfreight cant compete with van traffic as pointed out...but I would suggest that the longer the trip, the more economic railfreight becomes. Clearly something the Eddie Stobart Group have considered.

 

[The Planner]

Considering the amount of instances where NR are asked to look at feasibility for new paths for new Intermodal terminals (not including those mentioned above) there must be some money and traffic in it or people wouldn't be considering it.

 

[Moonshot]

The other thing to bear in mind is that FOCs only pay the avoidable cost charges to Network Rail for using the rail network.....

 

[RichmondCommu]

I ve not avoided any question .....I ve given you links to the evidence, make of it what you will. But as far as I can see , intermodal freight is on the increase, and the political will is very evident to transfer freight from roads onto rail as I stated via the HS2 buisness case.

http://en.wikipedia.org/wiki/Port_Salford

Now can you provide some evidence which backs up your statement of " Why is railfreight so expensive "?

Clearly railfreight cant compete with van traffic as pointed out...but I would suggest that the longer the trip, the more economic railfreight becomes. Clearly something the Eddie Stobart Group have considered.

Flows which FOC's lose to road transport suggest that rail freight is too expensive. The Ditton to Tees Port service is one example. The W H Malcolm service from Grangemouth to Tees Port is another.

There is plenty of political will to do lots of things in this country but that is no guarantee of a successful outcome.

So where is all this new traffic from Thames Gateway and Port Salford coming from?
--- old post above --- --- new post below ---

Considering the amount of instances where NR are asked to look at feasibility for new paths for new Intermodal terminals (not including those mentioned above) there must be some money and traffic in it or people wouldn't be considering it.

But how many of those Intermodal terminals actually see any rail freight traffic? The terminals at Castle Donnington and Tinsley come to mind. Not to mention the one that has closed at Blackburn. Or the one at Portsmouth.

 

[Moonshot]

Ive no idea where all this new freight is coming from......Asia or China would be a solid guess though. However what I do know is that UK population shows a steady increase in the future.....as does GDP. All I see is investment in port facilities as ships are getting bigger. I ve posted some evidence for you .......can I suggest you do likewise and back up your claims of railfreight being too expensive etc.

 

[Bald Rick]

London Gateway won't generate much rail traffic, notwithstanding the forecasts. It has a huge distribution park on site, so the boxes come off the side, straight into the warehouses. No need for a trip to Daventry etc, for warehousing and then back in an artic to the south east area.

Also, ships heading to Gateway need to get into the dredged channel in the Thames estuary, the start of which is almost within sight of Felixstowe. So for traffic to the Midlands / NW it will still be quicker to go from Felixstowe.

 

[edwin_m]

Rail's mode share of Southampton containers pretty much doubled on completion of gauge enhancement, which suggests that rail is very competitive when the distance and volume are right and the limitation on gauge was what was holding back rail in this market. However even for maritime traffic rail needs a certain distance to break even, so for example most containers between Felixstowe and the London area go by road.

I'm not aware of the details of what might have happened at Teesport, but a flow from Ditton to Teesport is shorter than many of the Southampton and Felixstowe flows where rail has a good market share. It would also have to use one of the Transpennine routes, none of which are cleared for W10/W12, so would need either small containers or low-height wagons. I seem to recall the latter were used on this flow but they are more sophisticated, therefore cost more and may have restrictions on load or not use the length of the train efficiently. It may also be that Teesport doesn't handle enough container traffic to generate the economies of scale that rail can take advantage of.

 

[Moonshot]

Demand to grow by over 30% in next decade

Over the next decade, we expect freight demand to grow by at least 30%, the equivalent of 240 additional freight trains a day, and by as much as 140% over the next 30 years.

To cater for this growth Network Rail, in partnership with the rest of the rail industry, will continue to work with business and government to move more freight off Britain’s roads, improving our quality of life and substantially reducing carbon emissions.
Key facts

The UK rail freight sector contributes £299 million in profits and wages to the UK economy.
On average a gallon of fuel will move a tonne of goods 246 miles on rail but only 88 miles by road.
Each freight train takes about 60 HGVs off the roads.



Above is from Network Rails own website.....

 

[RichmondCommu]

Ive no idea where all this new freight is coming from......Asia or China would be a solid guess though. However what I do know is that UK population shows a steady increase in the future.....as does GDP. All I see is investment in port facilities as ships are getting bigger. I ve posted some evidence for you .......can I suggest you do likewise and back up your claims of railfreight being too expensive etc.

Well I'll tell you where all the new freight is coming from. It's coming from shipping lines transferring from one port to another! That doesn't generate new freight traffic; it just means that trains are running from a different port!

 

[Moonshot]

Well I'll tell you where all the new freight is coming from. It's coming from shipping lines transferring from one port to another! That doesn't generate new freight traffic; it just means that trains are running from a different port!

And your evidence is.....?

 

[ModernRailways]

Surely the key is how close these containers will be to their eventual destination when coming off a ship. If some containers are bound for Scotland and some are bound for London and they are both unloaded at Felixstowe(?) then surely using the railways would be best. Using one locomotive, have the front section of the train done for Scotland, then leave an empty wagon and then have the London portion. At the London freight terminal have the rear London portion separated off. A shunter will then be used to assist in loading the final containers. Later that evening the southbound train would collect the wagons and proceed back to Felixstowe(?).

I also believe that we need to increase intermodals coming through the Channel Tunnel. Is there a maximum to how many wagons can be taken through the tunnel at once? If not, then have a pretty lengthy train, which would have containers bound for multiple locations, and have them ordered. Other locomotives will be there to then take each portion onward to their location. It would be quicker for a train to get to Scotland then it would for a lorry!

Right now I would say intermodals aren't too high of an interest because it can be awkward to sort out. The company has to pay for a lorry at both ends and if either the lorry or the train is late it will cost and sometimes another lorry may have to be sought since one lorry wouldn't be able to stay there for too long, if freight operators, like DB Schenker, had their own lorries which were used then I imagine it would be a lot better for them. Right now it needs to be integrated better.

We don't have enough loco's either do we?

 

[RichmondCommu]

Rail's mode share of Southampton containers pretty much doubled on completion of gauge enhancement, which suggests that rail is very competitive when the distance and volume are right and the limitation on gauge was what was holding back rail in this market. However even for maritime traffic rail needs a certain distance to break even, so for example most containers between Felixstowe and the London area go by road.

I'm not aware of the details of what might have happened at Teesport, but a flow from Ditton to Teesport is shorter than many of the Southampton and Felixstowe flows where rail has a good market share. It would also have to use one of the Transpennine routes, none of which are cleared for W10/W12, so would need either small containers or low-height wagons. I seem to recall the latter were used on this flow but they are more sophisticated, therefore cost more and may have restrictions on load or not use the length of the train efficiently. It may also be that Teesport doesn't handle enough container traffic to generate the economies of scale that rail can take advantage of.

Yes DRS were using low-height wagons but surely this would be considered as a one off cost? Not only that but I understand that the train was generally fully loaded. The other point regarding Teesport is that it has expanded considerably over the last few years and so would have expected to have been a prime target for rail freight?
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And your evidence is.....?

The business pages of the various broadsheets. Thames Gateway is looking to win business from other ports i.e. Felixstowe.
--- old post above --- --- new post below ---

Rail's mode share of Southampton containers pretty much doubled on completion of gauge enhancement, which suggests that rail is very competitive when the distance and volume are right and the limitation on gauge was what was holding back rail in this market. However even for maritime traffic rail needs a certain distance to break even, so for example most containers between Felixstowe and the London area go by road.

I've no doubt that gauge enhancement has certainly helped but as you have suggested in terms of distance that will only take us so far.

The problem is the SE consumes an awful lot of goods / commodities and yet rail freight is too expensive to take advantage of this. Which comes back to my original point? Colas had a trial freight service into London which quickly died a death.

 

[Moonshot]

The business pages of the various broadsheets. Thames Gateway is looking to win business from other ports i.e. Felixstowe.

Which is no different from any other private sector investment.....but what is very clear to me backed up by the links I ve posted to hard facts and figures is that ( as pointed out by others as well ) is that there is significant investment going into rail infrastructure to accomadate freight traffic, which increasingly needs larger gauge clearance. In logisitics, economics are driven by size, and individual logistic flows only happen when there is an end customer. This is not passenger traffic...which happens whether there is a passenger or not.

 

[RichmondCommu]

I also believe that we need to increase intermodals coming through the Channel Tunnel. Is there a maximum to how many wagons can be taken through the tunnel at once? If not, then have a pretty lengthy train, which would have containers bound for multiple locations, and have them ordered. Other locomotives will be there to then take each portion onward to their location. It would be quicker for a train to get to Scotland then it would for a lorry!

The issue here is that we are competing against Hamburg and Rotterdam in terms of container traffic between the UK and the rest of Europe. Also the more loco's you involve the higher the cost.
--- old post above --- --- new post below ---

The business pages of the various broadsheets. Thames Gateway is looking to win business from other ports i.e. Felixstowe.

Which is no different from any other private sector investment.....but what is very clear to me backed up by the links I ve posted to hard facts and figures is that ( as pointed out by others as well ) is that there is significant investment going into rail infrastructure to accomadate freight traffic, which increasingly needs larger gauge clearance. In logisitics, economics are driven by size, and individual logistic flows only happen when there is an end customer. This is not passenger traffic...which happens whether there is a passenger or not.

But switching from one to port to another is not going to generate any more business for the FOC's. The service between Teesport and Ditton was always full and yet it was deemed uneconomical. Which goes back to my original point; rail freight is too expensive.....

 

[Moonshot]

But switching from one to port to another is not going to generate any more business for the FOC's. The service between Teesport and Ditton was always full and yet it was deemed uneconomical. Which goes back to my original point; rail freight is too expensive.....

Richmond .....you dont seem to understand what I and others are telling you.....Railfreight becomes economic at a certain size of train and length of journey. Now Ive already given you hard evidence .....are you saying that railfreight is going to decline and die a death? If so why is all this investment happening in the industry?

 

[CalderRail]

Part of the reason railfreight isn't economical in the UK is the fact that distances from the sea just aren't long enough. In the UK, you are never more than 70 miles from the sea.

 

[Jonny]

The issue here is that we are competing against Hamburg and Rotterdam in terms of container traffic between the UK and the rest of Europe. Also the more loco's you involve the higher the cost.
--- old post above --- --- new post below ---


But switching from one to port to another is not going to generate any more business for the FOC's. The service between Teesport and Ditton was always full and yet it was deemed uneconomical. Which goes back to my original point; rail freight is too expensive.....

As an aside, could it be that the cost of getting it over the Pennines (sharp uphill and straight back down) using diesel traction is the limiting factor, and how will the economic balance of such flows change once the Transpennine route is electrified (and possibly Teesside if posts on other parts of this forum are correct).