DBS making £5m per month loss?

Discussion in 'UK Railway Discussion' started by Smudger105e, 10 Jun 2015.

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  1. Smudger105e

    Smudger105e Established Member

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    As I posted in another thread recently, DBS are reportedly losing £5m a month and have put a number of 66s into store.

    I have now heard that Engineering staffs are being offered redundancy.

    Are they in such deep doo - doos because of their operating practices, failure to compete effectively, because of their size or what?
     
  2. Phatdan

    Phatdan Member

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    118 redundancies I'm hearing ?
     
    Last edited: 13 Jun 2015
  3. Grafter

    Grafter Member

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    I think most of the redundancies etc will be from the north of the country due to the loss of all the coal work
     
  4. deltic

    deltic Established Member

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    Why do all such letters include statements along the lines of Para 2? That is, we want to grow the business but then to go on to say we actually need to make staff redundant.

    Far better to state upfront in the 2nd para that part of our business is in serious decline and we have to do something about it.

    I'm also find it rather odd the comment about the unexpected fast decline in coal traffic - when doing forecasts for the ORR 15yrs ago everyone was forecasting massive decline in coal - the only surprise is how well it has held up for so long.

    Hope everyone is redeployed successfully or only voluntary redundancies are required.
     
  5. class 9

    class 9 Member

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    The problem with the coal traffic was the more than doubling of the 'carbon floor price' which is a tax on carbon dioxide emissions, on April 1st.
    Due to extremely low gas prices and large amounts of coal that was stockpiled before, means that the traffic has literally fallen off a cliff.
    Both DB and FLHH recruited a lot of new drivers in the last couple of years, but the tax increase wasn't a surprise, but the effects have a lot worse than expected. Seems like poor management to me.
     
  6. RichmondCommu

    RichmondCommu Established Member

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    I passed through York recently and saw a lot of coal hoppers laid up to the north of the station on the ECML. This news also has implications for the S & C if the loss of coal traffic is permanent. I often think that when people predict future growth for freight traffic that they don't take into account the unstoppable decline in coal based freight. Fortunately for Freightliner their Intermodal traffic should keep them ticking over but they have lost aggregate based business to DBS. Its hard to see how the long future for rail freight is bright and I say that with a heavy heart :(
     
  7. WatcherZero

    WatcherZero Established Member

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    Once the coal power stations have burned through their stockpiles that they built up in anticipation of the tax change (literally) then some traffic should return, though there are fewer and fewer coal power stations.
     
  8. RichmondCommu

    RichmondCommu Established Member

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    But how much is left in the North in terms of maintenance and train crew? I think its a fair bet that whilst you have DBS you will always have Toton. Other than Toton I don't think there is much left other than Crewe Electric (CE). From what I understand DBS no longer plan to have class 92's running on the WCML so they are clearly looking to cut costs by operating class 92's overseas.
    --- old post above --- --- new post below ---
    Well exactly. All this adds up to a decline in freight traffic :(
     
  9. ainsworth74

    ainsworth74 Moderator Staff Member Moderator

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    Indeed, it was announced a few weeks ago that the coal side of Ferrybridge power station will be closing within the next few years and a gas power station will be restarted in Lincolnshire.
     
  10. muddythefish

    muddythefish Established Member

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    It might also concentrate a few minds - ie, chase port traffic harder and seek more general intermodal and supermarket traffic. There aren't enough (working) terminals in the UK and a recent railfreight conference criticised the industry for lack of innovation.
     
  11. TheJRB

    TheJRB Established Member

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    Whilst I always think one should hold significant caution before making comparisons with other countries, I do sometimes wonder why we cannot be shifting freight to the sort of degree that Germany does. When you consider how much freight they move on boats as well, it makes it all the more frustrating that our roads are so busy with lorries.

    I think it's about time we had some proper innovation from all parties and perhaps some proper compromises across the board. Things like Royal Mail moving off the rails the best part of a decade ago was a terrible decision and we should be seeing the reverse movement in an age where congestion and efficiency (both in business and environmental terms) are at the fore. Instead we end up with specific routes which are very busy because of hubs like Southampton, Daventry, Carlisle, Felixstowe etc. and other routes with no freight movements at all.
     
  12. RichmondCommu

    RichmondCommu Established Member

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    Muddy, for once I absolutely agree with you. The problem is how do you make rail freight competitive in terms of journey times and price. As you say there are a fair few rail connected freight terminals that are not being used, in fact in the case of Castle Donington the freight terminal has never been used despite brand new rail infrastructure and being right next to the Marks & Spencer distribution centre.
    --- old post above --- --- new post below ---
    You have to bear in mind that Germany has a much stronger manufacturing base which will always result in more freight traffic. It's also worth mentioning that thanks to international freight traffic the distances traveled in Germany are much greater for exports to the rest of Europe. If you look at many of the freight flows in the UK all too often road haulage is more competitive in terms of price and journey times. As an example Felixstowe to London is too short to make rail freight viable. Its a real shame but sadly its true :(
     
    Last edited: 11 Jun 2015
  13. TDK

    TDK Established Member

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    Poor management and poor planning. I certainly wouldn't want to be working for a freight company at this current time, all companies are effected with FLHH possibly losing the most work. It seems that DBS have got it totally wrong as well with making hundreds redundant then having to go on a huge recruitment drive only to now have a surplus. If the current climate continues there will be a lot of drivers looking for jobs with TOC's.
     
    Last edited: 11 Jun 2015
  14. 142094

    142094 Established Member

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    On the grapevine have heard that Tyne Yard (a DBS yard), there are currently more Freightliner drivers than DBS drivers, which shows you how bad it has become in the past few years. It has just lost the Jarrow tanks as well, which isn't good news either.
     
  15. RichmondCommu

    RichmondCommu Established Member

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    Have the Jarrow tanks been lost to another FOC or other modes of transport?
     
  16. fgwrich

    fgwrich Established Member

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    Indeed, I completely agree with you both.

    However, I have felt that for some considerable time that DBS, and that of previous operator EWS has had some considerable issues building for some time. EWS put itself in a position after privatisation where they had lots of money to spend, So they went out and bought 250 66s. They of course then went out and bought 30 Class 67s. The inherited a large amount of ex BR locos but sat on them for some time before selling them on for scrap or to other operators. They then became a little too greedy, lost the Royal Mail contract which lost the majority of the work for the 67s. Over the year's they've taken some heavy hits with the loss of a lot of the infrastructure and energy sector works to the likes of GBRf & Colas, with Freightliner and DRS picking up some of it as well, they have been steadily cutting maintenance and maintenance facilities back over the years to make a lot of it all Toton centric - fine if the 66 is reliable enough, not so if you only have 1 or 2 in somewhere like St Blazey for example and that fails on the GWML or having to hire in a road crane to lift a wagon to replace a wheelset because they've sold off or demolished it's former depot, Then there's the recruitment situations as well.

    In short, they must have known that the coal sector was in decline for many a year and that eventually it would have to be heavily reduced. But when you've got 3 other FOCs who are also very good at snapping up work as well, DBS Management have been either very slow to adapt to the game or surprisingly blinkered to the current climate. And notoriously over / undercutting bids for traffic for several years now, most of which doesn't seem to be getting them any further than they presently are, if not loosing further traffic.

    On the Railfreight point mentioned above - It is a difficult and disappointing thing to see new or fairly new railfreight terminals constructed then abandoned after little or no use - The one at Telford being another example. However, some of these I think are either located in the wrong places where there is little around the start or end point, which then results in little to entice businesses to switch from road haulage to transporting their goods to one freight terminal, onto rail then off at another end. They may be able to shift more, but in this economic climate it'll all come down to cost at the end of the day, the economics and speed compared to that offered by road. And as for the M&S Castle Donnington business - that really is an absolute farce. Didn't M&S get planning permission to build the site so long as they made use of the Rail connection? Either way, it's hardly very ''Plan A'' from a company so apparently concerned about the environment. Mind you, while M&S Has a large distribution centre in Swindon for GM and at Thatcham for food, Tesco has built one of the largest in the South on the former Reading Brewery - Both near Railway Lines, Both with no intention of any use of Rail.

    I really do feel for the DBS staff who are likely to be affected by this, sadly not so for the Management who seemed to have played EWS/DBS rather badly over the past few years.
    --- old post above --- --- new post below ---
    Speaking of Railfreights and Innovation for a moment though. I have noticed that the B&Q service is still running with DBS using up to 2 former Household Coal carrying HEA Hoppers on each service full of Gravel - Doesn't this run from Southampton to Mossend?

    I wonder how far the Colas Rail developments are getting too - Not just the service from Daventry, but as TNT has a major distribution centre near Birch Coppice I believe there was talk of a Birch Coppice to Euston service as well?

    Another loss for Freightliner coming up at the end of this month will also be Ellesmere Port's Manisty Wharf which is finishing at the end of this month. It's current and only traffic is the Ellesmere Port to Fiddlers Ferry Power service.
     
    Last edited: 11 Jun 2015
  17. 142094

    142094 Established Member

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    The traffic flow has stopped completely. Looks as if Shell has made the decision to close the terminal at Jarrow and sell the land.
     
  18. WatcherZero

    WatcherZero Established Member

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    Though I suppose there has been a shift to biomass and most biomass is actually imported.
     
  19. shedman

    shedman Member

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    Pretty sure that letter wasn't meant for the public domain
     
  20. swt_passenger

    swt_passenger Veteran Member

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    I thought it had gone over to coastal shipping?
     
  21. Phatdan

    Phatdan Member

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    Would you like me to remove it ?
     
  22. TomJ93

    TomJ93 Member

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    So? It has no confidential information within and is addressed "Dear colleague", hardly going to cause a witch hunt by DB managers.
     
  23. JAMBO

    JAMBO Member

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    HH have not got more drivers at Tyne yard than Schenker,10 at the most. And that is just for the HOBC work with the odd coal train that can't be covered at another depot.
     
  24. David

    David Established Member

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    Apples and oranges there comparing Germany and the UK. 1 country is part of a continental land mass, while the other is a relatively small and crowded island.

    Your point about roads being full of lorries is a valid point however, but the vast majority are not on 'point to point' runs. IE. 1 delivery to an end business, and reload for a return trip to it's home warehouse. The vast majority are on multi-drop or groupage work, which is completely uneconomical or feasable for day to day operations. Most lorries will be on multi-drop or groupage work.

    Multi-drop is pretty much self explanitory, as in you have several deliveries on 1 trailor/lorry, but groupage is a bit more complex, and tends to originate (and finish the day) at an import/export terminal, such as Immingham. Groupage is several deliveries the start at the same point (either a single warehouse or loads the are imported from abroad), but are often far less than wagon load, and are combined with several collections back to the originating point, more often than not to be combined with other loads for export to A.N.Other country. My dad is a HGV driver, and I myself used to do groupage work, driving a 3.5t van, (so I do have a fairly good insight into the general road haulage industry). You can imaging the size of the loads I was delivering and collecting (I had upto 12 deliveries and collections in a day). All these 'small town hauliers' are trying to make a living for their owners and drivers, and usually have to take what work they can. Firms that can get good rates for a simple 'out and back' run (example, take 1 load from Hull to Liverpool, reload at Wigan and back to Hull) are very much in the minority, as they do have to take on more loads per run, just to pay their way and make a small profit.
     
  25. al.currie93

    al.currie93 Member

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    Correct; comes from Canada I believe :)

    With a real switch to gas, I don't see why that cannot be transported by rail either. But anyway, one of railfreight's areas is energy transportation, and this is going to be in decline due to a drive towards green energy. Therefore the railfreight industry needs to identify new freight flows to operate to stay in the game. Sadly, as RichmondCommu has said, this is easier said than done, so we will likely see a decline. I feel it will likely need road travel to really hike up in price, some sort of freight distribution regulation or a massive moral change for rail freight to really go on the up again.

    On a side note, RichmondCommu - I think this is the third time in a row that I've agreed with you now... what's happened to us :P haha!
     
  26. TheJRB

    TheJRB Established Member

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    Thanks for that. Interesting stuff. I guess it all comes down to one of the distinct failings of the Channel Tunnel to boost rail freight. Admittedly there are some flows which come from Dollands Moor having been through the tunnel such as the regular working to and from Scunthorpe and the one a day via HS1 to Ripple Lane plus the other bits to Hams Hall, Daventry, Margam, Irvine, Wembley, Trafford Park and Ditton but overall it's not teeming with freight.
     
  27. Iskra

    Iskra Established Member

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    It's also quite a pleasant example of a 'we're making loads of you jobless,' letter, so it doesn't reflect badly on DBS at all.

    Plus, I suspect they have bigger fish to fry anyway...
     
  28. Legzr1

    Legzr1 Member

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    What an absolute shambles.<(
     
  29. Kevin_Brum12

    Kevin_Brum12 Member

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    It is bad news. Hopefully though given the demand for drivers in the passenger TOC's there may be openings for some of the displaced staff there, though of course it will mean learning a different lot of traction.

    However, what are the long-term prospects of DB Schenker? I'd say things right now look pretty grim and businesses that are losing £5 million a week are prime candidates for administration or worse. It all depends on whether DB decide to persevere, or try and off-load the former EWS. I can see the venture capitalists circling, keeping what traffic and flows they think are profitable and rapidly jettisoning the rest, with a large slice of DB Schenker estate (e.g. Toton) being a potential money-spinner.
     
  30. Smudger105e

    Smudger105e Established Member

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    5 million a month not 5 million a week!
     
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