Rail Frieght Group
There can have been few years in recent history stranger than 2019. Even in early December, as this was being written, we could not really tell whether 2019 would be the year that changed everything, or the year that changed nothing. Our sector, rail freight, is not the headline grabbing news, but it cannot equally be insulated from issues nationally, politically or in the railways. Yet equally change creates opportunity and businesses have been keen to capitalise on that, with growth and continued investment across the network.
The defining political issue has of course been Brexit and we have yet to know what impact this will eventually have. During the year we acted to get ready for a potential no deal event, and to prepare more generally for any future deal which reinstated a customs border between the UK and mainland Europe. Through trains via the Channel Tunnel have been of most concern, and so Government, both the Department for Transport and Her Majesty’s Revenue & Customs, have worked with the industry to establish processes enabling customs and other checks to be completed at the receiving terminals, not at the tunnel portals. Although some of this was enabled by the original legislation back in the mid-1990s, we now have a formula fit for today and ready to be implemented if required. Interestingly there are now early thoughts of how an inland ‘customs centre’ might be linked to the establishment of free ports, if this policy area is progressed.
Brexit has perhaps indirectly also contributed to another trend we have seen this year, that of rising road costs. One of the factors behind this is a nationwide shortage drivers, demographic and social changes in society, but also to changing trade patterns and the shift in the euro – pound exchange rate. Rail is in a good place to help with this; moving 50-70 lorry loads with a single driver must surely make sense over the longer distance routes.
These factors have contributed to a wealth of new services over the year. Maritime Transport and DB Cargo announced a new partnership on intermodal trains, with Maritime now taking the commercial risk on trains and terminal operation. New services have been introduced from London Gateway to the company’s sites at Wakefield and Trafford Park. Maritime is also set to be the operator of the new East Midlands Gateway SRFI which has been in the construction phase this year and is set to open in the spring.
Other terminals are also chasing growth. iPort at Doncaster, which only opened 12 months ago, is already up to five daily trains, including a new service from Felixstowe operating in one of the new paths created by the £60 million upgrade of the port branch line which was concluded over the summer.
A service for customer Ikea is proving economically viable over a short distance of 80 miles by achieving two daily trips from the locomotive and wagons.
This is all good news, but there is also a wary eye to the economy, where ongoing uncertainty is damping growth. The national picture in construction is weak, and although thus far rail volumes have weathered the storm there is some concern that this cannot last forever. So, 2020 needs to start strongly and with renewed ambition.
This will depend on the new Government and its plans. The party manifestos of all colours were strong on transport and several mentioned rail freight explicitly. This is encouraging; political support will help to shape the decisions which need to be made in coming months. Those decisions include the shape and structure of our railways as well as devolution of transport and railway powers to regional bodies or within Network Rail.
Yet perhaps the most fundamental issue in 2019 has been the change in public attitude to the environment, and the pressure on governments around the world to respond to the climate emergency. This is a huge opportunity for rail freight but also requires a strong response to highlight how we too can decarbonise over time. There has been excellent progress in this respect, with the Decarbonisation Task Force report early in the year, and other research projects both for carbon and air quality ongoing. The Railway Industry Association’s work has reignited the debate on electrification and the Scottish Government has committed to a rolling programme of new wires for substantial carbon reduction by 2035. The challenge now is to leverage this into actual infrastructure projects to support a transition to electric and other non-diesel haulage.
So, 2019 really was a year of substantial change, and yet whether we talk of Brexit, UK politics, railway structure, decarbonisation or market growth, the real test lies ahead. The groundwork of this year however leaves rail freight in a good place to face the year to come.
An opinion column of the Rail Freight Group, www.rfg.org.uk
