Freightliner calls on Government to set ambitious rail freight target

[YorkRailFan]

7th December, 2023

Freightliner calls on the government to set an ambitious rail freight target and save 2.5 million tonnes of carbon emissions

This weekend, Freightliner, a subsidiary of Genesee & Wyoming Inc. (G&W), will appear on The Climate Show on Sky News, to discuss how growing rail freight volumes and supporting modal shift to rail will support the delivery of the UK’s zero greenhouse gas obligations.

Freightliner calls on government to set a long-term target to treble rail freight volumes by 2050. Such an ambitious target will be a clear statement of intent from Government and provide confidence to the private sector to make significant investments in long-term assets that deliver growth. A trebling of rail freight will mean over 20 million Heavy Goods Vehicles (HGVs) journeys are removed from our busy motorways each year, reducing carbon emissions by 2.5 million tonnes of carbon dioxide – the equivalent emissions of someone flying around the world 300,000 times.

Today around 9% of freight is moved by rail in Great Britain, with rail transporting all kinds of essential goods and supplies – from containers to and from the deep-sea ports and inland terminals to bulk freight like construction materials, aggregates, and cement.

Growing the amount of freight transported by rail is vital to meet our net zero greenhouse gas emission target by 2050. Each freight train can remove up to 129 HGVs from Britain’s roads, with container trains removing up to 52 HGVs. For each tonne of freight moved by rail instead of road, carbon emissions are reduced by 76%. Using an electric locomotive there is a clear route to net zero emissions as the national grid is decarbonised. "There is an increasing desire for business to become more sustainable and meet their ambitious sustainability targets. Rail freight is a critical of the solution, but to make rail the mode of choice for truck haulage and bulk movements, the economics must work for customers. The economics of rail freight have been getting more challenging in recent years. As an example, fuel duty, which is one of the largest costs for road hauliers, has been effectively frozen for 14 years. When you compare this to track access charges, the charges we pay to run our trains on the network, these have increased by over 35% through inflationary increases alone for the same time period. We are calling on the Government to set an ambitious target to treble rail freight volumes by 2050 and support the rail freight industry with some key initiatives and policies. A clear statement of intent from the Government will provide confidence to the private sector and be a catalyst to make significant investments in long-term assets in what is a highly capital-intensive industry" Tim Shoveller G&W UK/Europe, CEO
To make this a reality, Freightliner is calling on the government to support the rail freight industry in 3 key areas:

i) Halve track access charges that freight operators pay to run trains on the network.
ii) Double the modal shift grant that businesses can access to support using rail.
iii) Keep investing in the rail network to ensure that there is sufficient capacity on busy rail corridors to enable more freight trains to be timetabled.

During the Climate Show, Freightliner will highlight many other opportunities and challenges facing the rail freight sector, including the impact of climate change on the resilience of the rail network, the challenges of keeping electric traction running when electricity prices are so high and the need for increased capacity across the UK rail network, especially considering the recent HS2 announcement.

Louise Ward, Safety and Sustainability Director, G&W UK/Europe comments, “We’re not just calling on the government for support, we are also setting our own sustainability targets and roadmaps within Freightliner, for the benefit of our customers and our organisation”.

“This includes expanding our use of electric freight trains as well as investments in alternative fuels, such as hydrotreated vegetable oil (HVO), and developing new technologies for future locomotives. As the largest freight operator of electric trains in the UK, we want to increase the number of electric services, but to do so requires electricity costs to be affordable and some of today’s gaps on the rail network to be electrified”.

The programme will be broadcasted on The Climate Show, Sky News at 15:30 and 19:30 on both Saturday 9th December and Sunday 10th December.

https://www.freightliner.co.uk/news/freightliner-calls-on-the-government-to-set-an-ambitious-rail-freight-target/

My take away from this statement is that Freightliner wants lower track access charges, the argument for this is to allow more start ups into the industry, despite the fact that the industry has been consolidating.

 

[yorksrob]

I'm dead against halving track access charges for freight. If they do, guess who will be expected to expected to pay for this invisible subsidy in terms of cuts ? Yes, you've guessed it. Us passengers.

What I wouldn't be opposed to would be a fully transparent railfreight subsidy for the good of getting freight off of the roads.

 

[daccer]

I'm dead against halving track access charges for freight. If they do, guess who will be expected to expected to pay for this invisible subsidy in terms of cuts ? Yes, you've guessed it. Us passengers.

What I wouldn't be opposed to would be a fully transparent railfreight subsidy for the good of getting freight off of the roads.

No way this kind of growth can be achieved without Government intervention which inevitably means the tax payer stumps up somewhere along the way. One thing which has been tried elsewhere is to mandate certain commodities travelling over a certain distance have to use rail for all or part of the journey.

Another idea might be to ban trucks delivering and collecting boxes from ports unless the journey is under a certain distance. Again anything will need legislation and funding. Is any govt going to reimagine the playing field for domestic freight and pay for the reset also?

 

[yorksrob]

No way this kind of growth can be achieved without Government intervention which inevitably means the tax payer stumps up somewhere along the way. One thing which has been tried elsewhere is to mandate certain commodities travelling over a certain distance have to use rail for all or part of the journey.

Another idea might be to ban trucks delivering and collecting boxes from ports unless the journey is under a certain distance. Again anything will need legislation and funding. Is any govt going to reimagine the playing field for domestic freight and pay for the reset also?

Indeed. Legislation and funding would be needed, not an "invisible" subsidy from the passenger sector.

In terms of legislation for the road hauliers, they can kick up a stink when they want to - as when they blocked the fuel depots in 2000 ? Would need a steely leader to restrict their movements.

 

[geoffk]

Indeed. Legislation and funding would be needed, not an "invisible" subsidy from the passenger sector.

In terms of legislation for the road hauliers, they can kick up a stink when they want to - as when they blocked the fuel depots in 2000 ? Would need a steely leader to restrict their movements.

And some of you will remember the 1970s, when the Transport & General Workers' Union tried to sabotage the proposed rail freight distribution centre at Didcot. Dock workers at Southampton threatened to blockade the port in support of their "brothers" in road haulage who might lose their jobs if Didcot went ahead. Labour was in power and their manifesto supported transfer of freight to rail but the TGWU's action ensured the continued use of the A34 by heavy lorries. The sorry episode is described in the book "Holding the Line" by Richard Faulkner and Chris Austin (OPC 2012). A good start would be to make HGVs cover their track costs to ensure a level playing field with rail.

 

[yorksrob]

And some of you will remember the 1970s, when the Transport & General Workers' Union tried to sabotage the proposed rail freight distribution centre at Didcot. Dock workers at Southampton threatened to blockade the port in support of their "brothers" in road haulage who might lose their jobs if Didcot went ahead. Labour was in power and their manifesto supported transfer of freight to rail but the TGWU's action ensured the continued use of the A34 by heavy lorries. The sorry episode is described in the book "Holding the Line" by Richard Faulkner and Chris Austin (OPC 2012). A good start would be to make HGVs cover their track costs to ensure a level playing field with rail.

Indeed. Good book worth reading.

The TGWU really were the bane of the railway at the time, along with some backward thinking Labour MP's.

 

[zwk500]

Interesting to see how people move around.

On topic, @yorksrob has covered the key points - legislating to control market-based actions is very rarely an effective tactic, and the focus should instead be on using public money to benefit railfreight as a whole, not operator-specific, by investing in infrastructure to allow more efficient freight movements. Better Signalling capacity, Loop/Yard lengthening, speed improvements, that sort of thing. Longer trains within existing times or quicker schedules with existing trains is a benefit to every rail user.

 

[Midland Man]

I'm dead against halving track access charges for freight. If they do, guess who will be expected to expected to pay for this invisible subsidy in terms of cuts ? Yes, you've guessed it. Us passengers.

What I wouldn't be opposed to would be a fully transparent railfreight subsidy for the good of getting freight off of the roads.

DfT Mode Shift Revenue Support subsidy is already available for rail and inland waterway freight to 'level the playing field' with road haulage.

 

[yorksrob]

DfT Mode Shift Revenue Support subsidy is already available for rail and inland waterway freight to 'level the playing field' with road haulage.

They presumably shouldn't have to shift costs onto passenger services by halving track access charges for freight services then.

 

[HSTEd]

I'm dead against halving track access charges for freight. If they do, guess who will be expected to expected to pay for this invisible subsidy in terms of cuts ? Yes, you've guessed it. Us passengers.

What I wouldn't be opposed to would be a fully transparent railfreight subsidy for the good of getting freight off of the roads.

The freight access charges levied on operators are already negligible.

It amounted to £11m in the last financial year, down from about £50m in the previous year.

All this is is Freightliner demanding vast increases in subsidies so they can avoid modernisation.

 

[yorksrob]

The freight access charges levied on operators are already negligible.

It amounted to £11m in the last financial year, down from about £50m in the previous year.

All this is is Freightliner demanding vast increases in subsidies so they can avoid modernisation.

Absolutely.

Nowt wrong with subsidies to freight, just so long as they are

1) transparent and

2) not at the expense of the passenger railway.

More needs to be said of this when the Government are whining about subsidies and blaming the passenger railway though.

 

[TPO]

https://www.freightliner.co.uk/news/freightliner-calls-on-the-government-to-set-an-ambitious-rail-freight-target/

My take away from this statement is that Freightliner wants lower track access charges, the argument for this is to allow more start ups into the industry, despite the fact that the industry has been consolidating.

The freight access charges levied on operators are already negligible.

It amounted to £11m in the last financial year, down from about £50m in the previous year.

All this is is Freightliner demanding vast increases in subsidies so they can avoid modernisation.

Indeed.

It's not track access charges which are a barrier to entry for new freight operators. In fact, Network Rail are very encouraging of new operators and the process for getting a track access contract is fair and transparent. In addition, there's much more pressure by Network Rail on the freight operators who cling onto WTT paths but never use them, those games are rightly being challenged.

Licence and Safety Certificates need thought and capability, but again ORR are very constructive and fair.

No, by far the biggest barriers for new freight operators to overcome are (1) the cost of the mandated overly specified insurance and (2) lack of available traction.

Some years ago, ORR consulted about the level of the insurance, and all the current big operators wanted it left as it was to keep entry costs high so they would face less competition.

Wonder if Freightliner have an agenda to get subsidy or some other concession, potentially around acquiring new traction......? JMO tho.

TPO

 

[Oxfordblues]

Why do Freightliner have to pay track access charges anyway? Take Southampton-Manchester via the A34 and M6. A road vehicle conveying a 40ft container encounters no toll gates on the entire trip. After paying Vehicle Excise Duty and Fuel Duty there's no further expense.

 

[yorksrob]

There's a whole debate around whether road hauliers contribute enough towards the upkeep of the road, but presumably their road tax is supposed to contribute the cost of the network, in the way that track access charges contribute towards the cost of maintaining the rail network.

 

[HSTEd]

Why do Freightliner have to pay track access charges anyway? Take Southampton-Manchester via the A34 and M6. A road vehicle conveying a 40ft container encounters no toll gates on the entire trip. After paying Vehicle Excise Duty and Fuel Duty there's no further expense.

Well Freightliner pay no fuel duty and essentially no VAT on their fuel (5% instead of 20%).
EDIT:

UK Energy in Brief suggests that heavy goods vehicles alone consume about 21% of the petroleum fuel supply used for road transport.

That is about 21% of £25.8bn (fuel duty take in 2023), or about £5.5bn, plus at least £1.1bn VAT on the duty alone, let alone the 20% VAT on the fuel cost itself.

Meanwhile the railfreight operators pay no fuel duty, a tiny amount of VAT on that fuel (a quarter as much per litre as road users, ignoring the VAT on the duty), and a grand total of £11m on infrastructure access charges.
There is a reason freight operators don't like electric traction and continue to use locomotives with ancient diesel engines.

On the other hand, freight operations have become a major roadblock on significant rationalisation/modernisation of the industry.

 

[shorebreeze]

How on earth did Genesee & Wyoming come to own Freightliner? G&W in the US are a local, short-distance, carload freight operator. Freightliner is a long-distance, trunk route, container company. And I guess I then have to ask, how is it going? I haven't followed the freight industry that much.

 

[hwl]

How on earth did Genesee & Wyoming come to own Freightliner? G&W in the US are a local, short-distance, carload freight operator. Freightliner is a long-distance, trunk route, container company. And I guess I then have to ask, how is it going? I haven't followed the freight industry that much.

Long distance in UK is short to medium in US. G&W have 100+ discrete separate US operation some with quite long mileages on some of those routes. G&W was bought out twice in the last decade and they currently have big institutional owner.

 

[The Planner]

On the other hand, freight operations have become a major roadblock on significant rationalisation/modernisation of the industry.

What are they blocking?

 

[eldomtom2]

How on earth did Genesee & Wyoming come to own Freightliner? G&W in the US are a local, short-distance, carload freight operator. Freightliner is a long-distance, trunk route, container company. And I guess I then have to ask, how is it going? I haven't followed the freight industry that much.

I would presume G&W listens to Freightliner management on how things work in the UK...

 

[GB]

How on earth did Genesee & Wyoming come to own Freightliner? G&W in the US are a local, short-distance, carload freight operator. Freightliner is a long-distance, trunk route, container company. And I guess I then have to ask, how is it going? I haven't followed the freight industry that much.

Freightliner is more than just a container company.

 

[hwl]

Freightliner is more than just a container company.

Indeed and with DB Cargo not in a healthy shape are quite likely to be the largest UK FOC soon.

 

[Train_manager]

.

 

[hwl]

That will only happen if Freightliner buys out DB. But who knows the future

I just checked Freightliner are already the largest FOC in Q1 2023-2024 (i.e. April-June2023) by number of freight train km and freight vehicle km

Q2 stats are out later this week.

Q1 market share

Freight Train km top 3 FOCs:
1 FL 31.5%
2 DB 28.4%
3 GBRf 28.1%

Freight vehicle km top 3 FOCs:
1 FL 38.9%
2 GBRf 29.5%
3 DB 23.3%

ORR don't publish quarterly tonne-km stats so DB might still be doing better on that metric.

 

[renegademaster]

I just checked Freightliner are already the largest FOC in Q1 2023-2024 (i.e. April-June2023) by number of freight train km and freight vehicle km

Q2 stats are out later this week.

Q1 market share

Freight Train km top 3 FOCs:
1 FL 31.5%
2 DB 28.4%
3 GBRf 28.1%

Freight vehicle km top 3 FOCs:
1 FL 38.9%
2 GBRf 29.5%
3 DB 23.3%

Wouldn't no of diagrams be a better stat? This just tells you freightliner do longer ones on average than the others.

 

[Train_manager]

.

 

[hwl]

Meanless stats mate. But hey what do I know

Try getting ORR to publish better ones then!

 

[zwk500]

Try getting ORR to publish better ones then!

What are the two FOC's revenues? That should be published by Companies House.

 

[hwl]

What are the two FOC's revenues? That should be published by Companies House.

DB Cargo Turnover 2022: £271m, with a pre Tax loss of £48.9m
FL Turnover 2022: £470m, with a pre Tax loss of £27.9m

 

[GB]

What are they blocking?

Yes I'd be interested to know too.

 

[HSTEd]

What are they blocking?

Amongst other things, freight operators are now the primary obstacle holding back signaling modernisation and the abolition of most trackside signaling infrastructure.

They are pretty much the only people left without onboard train integrity monitoring (TIM), and even though the technology to provide that for freight operations exists (ECP braking) it is almost impossible to get them to adopt it in the current environment. Whilst technically all we would need would be freight train operators to fit ETCS Level 2, the capacity needs of the British railway are such that we'd have to retain so many axle counters as to make the whole exercise pointless unless they get TIM too.

With TIM we can move to communication-based train control systems such as ETCS Hybrid Level 3 (which now has a working installation in India!) or even a Seltrac solution. As it is we won't even be rid of traditional signal boxes until 2070.