Why Is Railfreight So Expensive?

[Moonshot]

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.

If it wasnt economical, why do FOCs actually exist? FOCs are private sector companies. And I rather think that freight trains travel more than 70 miles on an average journey ( Southampton and Felixstowe to Trafford park spring to mind.

As a few have stated , railfreight is high bulk movements.....clearly a train with one driver/locomotive with 70 containers in tow has a significant cost advantage on a journey between Southampton and Trafford Park than 70 HGVs with 70 drivers....

 

[tbtc]

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).

FOCs seem to prefer to use diesel locos, even when 99% of a route is electrified (since the cost of switching locos is too much/ too fiddly - something that those suggesting "drags" instead of bi-mode IEP forget), so I honestly don't see much change in diesel freight even after another thousand miles of electrification.

 

[LNW-GW Joint]

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.

I think you have to make a distinction between deep sea intermodal and domestic.
It's the domestic that never seems to take off (supermarkets and the like).
Every new flow seems to be matched by a loss as the traffic is concentrated elsewhere.
And Channel Tunnel container freight is derisory.
It has come close to complete collapse several times.
That's why Eurotunnel is running its own services.
Apart from cost, the railways are not seen as flexible enough for the distribution trade (7-day working, just in time delivery, real-time tracking etc).

While growing, railfreight still seems to be missing out on the bonanza of traffic seriously transferring from road.
Even with the big port operations, where the economics favour rail, the rail share is still only around 20-30%.

 

[CalderRail]

If it wasnt economical, why do FOCs actually exist? FOCs are private sector companies. And I rather think that freight trains travel more than 70 miles on an average journey ( Southampton and Felixstowe to Trafford park spring to mind.

As a few have stated , railfreight is high bulk movements.....clearly a train with one driver/locomotive with 70 containers in tow has a significant cost advantage on a journey between Southampton and Trafford Park than 70 HGVs with 70 drivers....

Because there are occasions when freight containers have to be moved in from one end of the country to the other. But compared to places on the continent where freight can be moved in bulk hundreds or even a thousand miles from port to inland marshalling yard, the UK has less need for rail hauling intermodal freight containers.

Given this, the freight infrastructure has developed with the assumption that motorway corridors are the primary inland freight arteries. One train with one driver can only go to one place. 70 HGVs can go to 70 different warehouses.

That makes railfreight less attractive. It's a cyclical thing.
--- old post above --- --- new post below ---

I think you have to make a distinction between deep sea intermodal and domestic.
It's the domestic that never seems to take off (supermarkets and the like).
Every new flow seems to be matched by a loss as the traffic is concentrated elsewhere.
And Channel Tunnel container freight is derisory.
It has come close to complete collapse several times.
That's why Eurotunnel is running its own services.
Apart from cost, the railways are not seen as flexible enough for the distribution trade (7-day working, just in time delivery, real-time tracking etc).

While growing, railfreight still seems to be missing out on the bonanza of traffic seriously transferring from road.
Even with the big port operations, where the economics favour rail, the rail share is still only around 20-30%.

I wish the chunnel had been bored to a size that would have permitted double-stack intermodal ISO container trains. THAT would have been a game-changer.

 

[GearJammer]

The second post by 6Gman has about hit the nail on the head, all the time your transhipping containers from trains to trucks and vice versa your adding cost, shipping lines are always trying to push down the rates for moving boxes from A 2 B which does'nt help, many road hauliers have fallen by the way side coz hauling containers is not financially viable.

As for Southampton the gauge enhancement will only do so much, the next stumbling block will be the terminals, the original plan was to scrap the two big cranes at Southampton Maritime terminal and replace with new ones that will increase capacity/productivity so that the Millbrook terminal could be closed down (this has indeed happened) but there is so much work that Freightliners Millbrook terminal will now be staying open as Maritime can't cope with all the work. Between the two terminals they can only handle so many trains in a 24 hour period and with a new berth opening in Southampton Container port very soon (4 brand new ship-shore cranes are being built as i type this) capable of handling even bigger containerships there will be even more container traffic coming through the port, rail can only handle so much of it, so it'll be going on trucks.

Moving to Felixstowe, i can see Felixstowe looseing a lot of work to DP World who run Southampton and the new London Gateway port (So don't expect these two ports to be competeing, they will work together) the reasoning being that there are proposals to put a toll on the A14 and charge HGVs to use the route, this will add cost to hauliers who will pass it back to the shipping lines, now yes they can put some of it on the train instead but again you go back to the extra cost of extra handling and like Southampton Felixstowe can only handle so many trains in a 24 hour period.

Im pretty sure both road and rail 'could' make good money shifting boxes if they worked together instead of trying to steal work from each other by stopping the shipping lines from pushing down the rates for moving boxes.

Im also surprised that no one has yet mentioned that the London Gateway port will probably also benefit (as will other ports) from the imminent closure of Thamesport at the Isle of Grain.

 

[YorkshireBear]

Everything is going down except intermodal which is going up very very very quickly. Some flows may have been lost but overall it is certainly going up. Everytime new paths are created for freight they are snapped up very quickly.

 

[Moonshot]

Given this, the freight infrastructure has developed with the assumption that motorway corridors are the primary inland freight arteries. One train with one driver can only go to one place. 70 HGVs can go to 70 different warehouses.

That makes railfreight less attractive. It's a cyclical thing.

Clearly railfreight has limitations....I wouldnt expect a locomotive ( or a HGV ) to deliver a bag of shopping ordered from Tesco to my house. However that doesnt mean to say its uneconomical for the particular area of the supply chain it serves , which is what the OP was implying with the first post.

Railfreight is what it is.....a mover of significant loads over distance. And with the UK government having signed up to the Kyoto Accord in 1997, clearly it has a part to play in achieving protocol targets..

 

[The Planner]

Everytime new paths are created for freight they are snapped up very quickly.

Doesn't quite work like that, we don't "create" paths for someone to buy at a future point in time (apart from the frankly daft and old QJ strategic paths which are useless) a FOC will have a new flow and they will spot bid for a path they want, we will then either validate it as it works as bid or go to work and tweak it or reject it.

 

[RichmondCommu]

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?

First things first. You've failed to explain how Thames Gateway and Port Salford will generate extra freight revenue despite being repeatedly asked.

Secondly I've already described two sources of rail freight that have now been lost to road transport. The reason that these flows have been lost is down to cost and I'm interested to know why. Intermodal is perceived to be the way forward and yet it has been lost to road haulers so clearly something is going wrong.

Thirdly, I'm not suggesting that rail freight is going to die a death but it does need to become more competitive. Investment in the rail network is fantastic but we also need to ensure that rail freight remains competitive or else FOC''s will continue to lose business.

 

[YorkshireBear]

Doesn't quite work like that, we don't "create" paths for someone to buy at a future point in time (apart from the frankly daft and old QJ strategic paths which are useless) a FOC will have a new flow and they will spot bid for a path they want, we will then either validate it as it works as bid or go to work and tweak it or reject it.

I was being simplistic sorry.

 

[GB]

Moving to Felixstowe, i can see Felixstowe looseing a lot of work to DP World who run Southampton and the new London Gateway port (So don't expect these two ports to be competeing, they will work together) the reasoning being that there are proposals to put a toll on the A14 and charge HGVs to use the route, this will add cost to hauliers who will pass it back to the shipping lines, now yes they can put some of it on the train instead but again you go back to the extra cost of extra handling and like Southampton Felixstowe can only handle so many trains in a 24 hour period.

The A14 toll is no longer going ahead...

http://www.highways.gov.uk/roads/road-projects/a14-cambridge-to-huntingdon-improvement-scheme/

Tolling

Our recent consultation highlighted clearly that tolling was not supported by the majority of community and stakeholder respondents.

The government has listened carefully to the views and opinions expressed and asked us to re-examine the business case for tolling this scheme. As a result, ministers confirmed in the 2013 Autumn Statement and in the new National Infrastructure Plan 2013 that plans to toll the A14 Cambridge to Huntingdon improvement scheme would not go forward.

Local authority and local enterprise partnership contributions to the scheme are unaffected by the decision not to toll and remain an important consideration in the overall funding model for the A14 scheme.

RichmondCommu: Maybe that particular flow is cheaper and easier by road for the shipping line due to distances involved....perhaps there were other factors behind closed doors why that shipping line changed to road haulage...or perhaps it was the rail freight company that actively withdrew the flow because they considered their investment and time did not match their return.

But you can't just say that the whole of rail freight (or just intermodal) is not competitive based on a couple of withdrawn flows. Some flows work better than others.

 

[edwin_m]

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?

How long was the train? I seem to recall a picture showing only a few wagons, whereas trains out of Felixstowe or Southampton are 500m+. A longer train (assuming it is loaded!) increases revenue in proportion but doesn't increase costs by so much.

Felistowe or Southampton generate a dozen or more trains per day so there is the economy of scale to produce trainloads to several different destinations. Even if Teesport is expanding the total TEU is much less than these larger ports.

 

[Tiny Tim]

Sorry to get picky about this, but how are we defining 'expensive'? Mainland Britain is very different situation compared to Europe. What with us being an island, most of our industry is closer to a port than in Europe, which gives road an advantage. Also, continental railways compete with an extensive commercial inland waterway network that no longer exists here. To further confuse matters, road haulage is banned for one day a week over most of Europe, which must reduce it's competitiveness.

However you look at the statistics, rail freight has shown an increase over the last few years; It's not a huge rise, and some of it has been created by changes in traffic flows (coal from ports, not pitheads) but it has happened. It seems likely to me that rail freight in Britain is less able to compete with road due to our topography, infrastructure and road legislation. Apart from the latter, there's not much to be done about it, and I can't see a UK government bringing in a Sunday lorry ban, even though most of Europe has had this for decades.

 

[HSTEd]

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?

Because titanic sums of public money are being used to prop up rail freight levels.
Its all just a huge subsidy farm.

 

[Tiny Tim]

Because titanic sums of public money are being used to prop up rail freight levels.
Its all just a huge subsidy farm.

Rail freight receives public subsidy, but so do our roads. Neither road users or rail users pay fully at point of use, it's all subsidised from taxation. It's really a question of which form of transport merits the most public support.

 

[RichmondCommu]

How long was the train? I seem to recall a picture showing only a few wagons, whereas trains out of Felixstowe or Southampton are 500m+. A longer train (assuming it is loaded!) increases revenue in proportion but doesn't increase costs by so much.

Felistowe or Southampton generate a dozen or more trains per day so there is the economy of scale to produce trainloads to several different destinations. Even if Teesport is expanding the total TEU is much less than these larger ports.

In all honesty the length was certainly not 500m+ however it was always fully loaded from what I understand. My concern comes from the fact that there was a lot of publicity surrounding the introduction of the Ferrymasters service so clearly they and DRS thought it would make money. Not to mention the fact that it took more than a year to plan.

I concur that Teesport is nothing like the size of either Southampton or Felixstowe however Teesport has expanded over the years whilst freight traffic has declined. This is what gives me cause for concern.
--- old post above --- --- new post below ---

The A14 toll is no longer going ahead...

http://www.highways.gov.uk/roads/road-projects/a14-cambridge-to-huntingdon-improvement-scheme/



RichmondCommu: Maybe that particular flow is cheaper and easier by road for the shipping line due to distances involved....perhaps there were other factors behind closed doors why that shipping line changed to road haulage...or perhaps it was the rail freight company that actively withdrew the flow because they considered their investment and time did not match their return.

But you can't just say that the whole of rail freight (or just intermodal) is not competitive based on a couple of withdrawn flows. Some flows work better than others.

My concern is that with the exception of the supermarket services we are unable to sustain Intermodal services that do not not run to and from a port. If rail freight is to grow in this country we need to address this matter and quickly.

We often read of planning applications for rail served freight terminals and yet they are never used! The only freight terminal in the East Midlands at Castle Donnington was supposed to be handling traffic for M&S but nothing has come of this.

 

[YorkshireBear]

The Teesport service was very rarely fully loaded and suffered due to lack of use. Teesport needs to become more established but they are doing well now with daily trains coming from that area to Leeds.

 

[RichmondCommu]

The Teesport service was very rarely fully loaded and suffered due to lack of use. Teesport needs to become more established but they are doing well now with daily trains coming from that area to Leeds.

Well that conflicts with what I'd observed but I guess it all depends on what day you see it run. Just out of interest do you have details of the trains running to Leeds from Teesport? i'm surprised that they are running as the distance is less than it is from Teesport to Ditton.

 

[Freightmaster]

Well that conflicts with what I'd observed but I guess it all depends on what day you see it run. Just out of interest do you have details of the trains running to Leeds from Teesport? i'm surprised that they are running as the distance is less than it is from Teesport to Ditton.

The Leeds to Teesside(Wilton) Freightliner service runs three days a week,
but the traffic actually originates from Southampton Maritime, rather than
Leeds itself. Freightliner also run a daily train from Felixstowe to Teesside.

The other big success in the past couple of years has been the
reopening of the container terminal at Bristol, which now sees
two daily trains from the East Coast Ports.

In terms of pure domestic traffic, DRS now operate three daily
"Tesco Express" trains from Daventry (to Mossend, Cardiff and
Tilbury), as well as three internal services within Scotland (to
Aberdeen, Inverness and Elderslie).


As several people have already tried to explain, the problem isn't
that railfreight is "too expensive", but rather that this country is
just too small to make intermodal rail traffic viable except in a
few, specific circumstances.


MARK

 

[RichmondCommu]

As several people have already tried to explain, the problem isn't
that railfreight is "too expensive", but rather that this country is
just too small to make intermodal rail traffic viable except in a
few, specific circumstances.

MARK

I take on board what you're saying but what concerns me are Intermodal services which were running but which have now ceased to run. These services have been lost to road traffic and one can only assume that this is because rail freight is too expensive.
--- old post above --- --- new post below ---

The Leeds to Teesside(Wilton) Freightliner service runs three days a week,
but the traffic actually originates from Southampton Maritime, rather than
Leeds itself. Freightliner also run a daily train from Felixstowe to Teesside.

The other big success in the past couple of years has been the
reopening of the container terminal at Bristol, which now sees
two daily trains from the East Coast Ports.

In terms of pure domestic traffic, DRS now operate three daily
"Tesco Express" trains from Daventry (to Mossend, Cardiff and
Tilbury), as well as three internal services within Scotland (to
Aberdeen, Inverness and Elderslie).
MARK

In all fairnes I've already stated that the Tesco services are doing well. What concerns me are the freight terminals that have closed and those that have been built but never used.

 

[HSTEd]

If you can reduce the cost of container 'lifts' then rail freight can compete.

But then there are all the inherent problems with low train weight and restrictive loading gauge...

 

[Oswyntail]

I am surprised that no one has yet mentioned the effect of access charges on rail costs. A road operator pays one charge per vehicle per year, and can do with that vehicle what he will without factoring in any journey charge. With the per train access charge, rail is playing on a non-level field of Himalayan proportions. Why else can so many local, independent haulage firms seem to be profitable?
As someone has implied earlier, if rail and road work together to their strengths, then there would be a better deal for the consumer and the country. Improving the rail/lorry interface to bring costs down would be a start.

 

[HowardGWR]

We often read of planning applications for rail served freight terminals and yet they are never used! The only freight terminal in the East Midlands at Castle Donnington was supposed to be handling traffic for M&S but nothing has come of this.

It's Castle Donington. HTH
--- old post above --- --- new post below ---

If you can reduce the cost of container 'lifts' then rail freight can compete.

That's a very good point. Automation (it's done in the likes of Amazon warehouses) must be an important factor.

 

[RichmondCommu]

It's Castle Donington. HTH

Ooops! Thanks for your correction. I'd be interested to know what HTH means.

 

[GB]

I'd be interested to know what HTH means.

Hope that helps. HTH

 

[RichmondCommu]

I am surprised that no one has yet mentioned the effect of access charges on rail costs. A road operator pays one charge per vehicle per year, and can do with that vehicle what he will without factoring in any journey charge. With the per train access charge, rail is playing on a non-level field of Himalayan proportions. Why else can so many local, independent haulage firms seem to be profitable?
As someone has implied earlier, if rail and road work together to their strengths, then there would be a better deal for the consumer and the country. Improving the rail/lorry interface to bring costs down would be a start.

But this only highlights my point. These are the kind of costs that we need to reduce if the Government wants to see more freight on our railway network.
--- old post above --- --- new post below ---

Hope that helps. HTH

Yes it does, thanks very much for that! Always learning on this forum!

 

[edwin_m]

The Leeds to Teesside(Wilton) Freightliner service runs three days a week,
but the traffic actually originates from Southampton Maritime, rather than
Leeds itself. Freightliner also run a daily train from Felixstowe to Teesside.

So in effect Teesside is an "inland" terminal rather than a transfer between trains and ships. Do any container ships actually dock on Teesside?

A few years ago the only intermodal services in the UK were to and from ports. This traffic has increased greatly, partly because of increasing flows of containers no doubt but also because rail has been gaining market share from road. This growth is partly due to gauge enhancement - but wouldn't have happened unless rail was competitive on cost and reliability.

More recently we have seen inland container flows starting, such as the Tesco trains, but these are only viable over longer distances (is Daventry-Cardiff still running?). However the prediction from the expert I know is that the breakeven distance for these will gradually reduce, driven by increasing road congestion, restrictions on road drivers' hours, increasing fuel prices and perhaps consumer pressure for businesses to be more "green". This certainly aligns with Network Rail's prediction of intermodal freight increasing greatly over the next few decades, offsetting a reduction in coal.

 

[Donny Dave]

I am surprised that no one has yet mentioned the effect of access charges on rail costs. A road operator pays one charge per vehicle per year, and can do with that vehicle what he will without factoring in any journey charge.

What's this single charge then? Firstly, you have the VOSA fee, then insurance for the lorry. Don't forget the MOT and VED either. It all adds up ....

My dad used to run his own lorry, and his expenses (including fuel) were between twenty and twenty five thousand pounds a year, so it's not as cheap or as easy as some people here make out ....

 

[CockneySparrow]

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.

They are still running hourly out of Felixstowe towards Peterborough, in fact the can't get the containers out of Felixstowe quick enough
--- old post above --- --- new post below ---

What's this single charge then? Firstly, you have the VOSA fee, then insurance for the lorry. Don't forget the MOT and VED either. It all adds up ....

My dad used to run his own lorry, and his expenses (including fuel) were between twenty and twenty five thousand pounds a year, so it's not as cheap or as easy as some people here make out ....

Then you have a wagon/train load of drivers wages to pay as well

 

[tbtc]

I am surprised that no one has yet mentioned the effect of access charges on rail costs

These are the kind of costs that we need to reduce if the Government wants to see more freight on our railway network

How do you assess track access charges?

Freight trains are obviously long and heavy, so only right that they have higher charges than for a typical DMU/ EMU.

There would certainly be a lot of complaints from TOCs if freight companies were getting discounted paths.

"Getting lorries off the road" ticks a lot of boxes in terms of green credentials/ public opinion (i.e. fewer trucks for them to deal with on motorways), of course, but at what cost?