CAN BREXIT FINALLY DELIVER CROSS-CHANNEL RAIL FREIGHT?

Cross-channel rail freight has seen many ups and downs and remains one of the most frustrating markets for rail freight operators and the sector in general. The volume of freight moved has never come close to the original forecasts, yet the potential has always remained strong, and with Brexit set to influence trade patterns from next year, there is growing interest in whether rail can offer something new to importers and exporters alike.

The challenges for cross-channel traffic have been many. Service reliability and journey time have not always been sufficiently good and there has been too much disruption to build customer confidence. Over time moves to liberalise the European railways have helped operators to establish new flows, and to tackle some of the worst issues at borders, yet service provision is still too frequently interrupted, most recently by strikes in France that caused multiple cancellations over the summer. The frequent migrant crises in Calais have also disrupted services, although more recently this has been improved by enhanced security measures at the tunnel portal.

More generally, however, building new services has been hampered by the trade imbalance between the UK and the Continent, which makes loading outbound trains more difficult, and the efficiency and low cost of road transport. Brexit could change both these factors. Right now, there are still many questions over the eventual deal next March, but unless there is some kind of customs arrangement there will be a direct impact on trade via the Dover straits. A ‘no-deal’ arrangement will see all consignments subject to customs and other border checks, and there will also be restrictions on the number of road driver permits available to UK haulage companies.

Rail freight will be affected too, but the UK and French Governments have committed to work on bilateral agreements that should enable trains to continue to operate. Government is also working to establish whether and how inland rail freight terminals might be able to act as customs hubs, enabling trains to run straight through, avoiding border delays. There is much to be done to establish the necessary processes and systems, but a strong commitment from the industry to make this work.

Changes in the pattern of trade could also create opportunities. If the UK can up its game on exports, the economics of cross-channel rail freight would benefit and any increase in trade from East Asia could also help support the nascent services to and from China, which we have seen operating as trials over the last year.

There are, however, still some challenges. Loading gauge across Kent is still below that of other routes, and the so-called ‘W9’ clearance that was established when the tunnel first opened is not sufficient for the most common swap-bodies used in European trade. There are also cost and access challenges for any operator using HS1, where the only available paths are at night, making it hard to meet customer demands for service rotations.

Finding the right paths across multiple railway infrastructures can also be challenging. To that end, the European Commission has established rail freight corridors, with the UK participating in the North Sea-Mediterranean route. Although the corridors are at an early stage, the aim is to ensure path availability is efficient, and that infrastructure investment is channelled to support freight. However, UK Government is likely to withdraw from the corridor post-Brexit, so operators will have to work harder to make sure that their needs are fully incorporated in future decisions.

For rolling stock and wagons there is still not full clarity on how standards and acceptance will be managed once the UK is not a member of the European Railways Agency. For cross-channel traffic, the existing wagons are likely to retain their rights, but for any future new vehicles, the framework will need to be established. There may well be some areas where there is a potential cost saving (noise testing, for example), but as most new wagons are built outside the UK this could be easily offset by increases in cost elsewhere. For cross-channel trade, any new restriction on where wagons can operate would increase costs significantly and must be avoided.

Overall, there is still much work to do to establish the necessary processes and policies, but there is clear potential for an upturn in use of cross-channel rail over the coming years as Brexit is implemented.

An opinion column of the Rail Freight Group, www.rfg.org.uk