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Rail Freight Operators’ Association “The collective voice of rail freight operators”

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Presentation on theme: "Rail Freight Operators’ Association “The collective voice of rail freight operators”"— Presentation transcript:

1 Rail Freight Operators’ Association “The collective voice of rail freight operators”

2 Rail Freight - strategically important to Scotland  Plays a vital role in supporting economic connectivity and Scottish business with the rest of the UK and the world.  10 trains a day move between the Central Belt and the West Midlands moving everyday goods for retailers in both directions  Providing a gateway to the world for Scottish exports, notably whisky and other drinks moving in deep-sea containers to Felixstowe, Southampton, Tilbury, Liverpool and the Humber Ports  Moving Scottish mined coal to English power stations and supplying coal to Longannet and Cockenzie power stations to generate electricity

3 The Freight Market - A Competitive Sector  Rail operators compete directly with each other, road and ship  Competition helps drives efficient behaviour.  The Rail Value for Money study (McNulty) concluded that rail freight operators had achieved:  A 32 per cent improvement in staff productivity since 1998/99  48% growth with half the locomotives and two thirds of the wagons employed in the mid-1990s  In the future, more flexibility & efficiency is needed to keep up with competing modes and drive further modal shift:  Longer&/or heavier trains  Operating more days of the week  Simple, national access and planning regimes

4 Key rail freight markets in Scotland  Deep sea intermodal (both imports and exports)  Domestic intermodal  Coal (Anglo-Scottish and wholly Scottish flows)  Petroleum products  Chemicals  Cement  Waste  Nuclear  Pipes  Automotive products  Metals  Mail  Timber Coal currently accounts for 76% of movements Intermodal has been the fastest growing sector with 37% growth in container tonnes by rail to/from/within Scotland since 2004

5 UK Growth  Since 1994/95 UK rail freight has grown by 48% - to 19.23 billion tonne km  Coal for electricity generation has declined – although rising gas prices has increased volumes in the last year  Intermodal has become the largest sector in the market and has grown by 61% since 2003/4 whilst road movements have reduced by 14%  Investment in the Strategic Freight Network in England has enabled growth and increased modal share by rail:  Gauge clearance from major ports  Enabling longer trains

6 MDS Transmodal revised forecast freight tonnage to Scotland for 2010-2030 (based on agreed industry forecast but updated to take into account recessionary impacts)  Scottish Parliament announced January 2012 objective to increase exports by 50% by 2017  Considerable continued growth in Intermodal sector  Coal decline but potential for biomass and extension to coal usage through fitment of carbon capture storage (CCS) at power stations  2010-2030 forecast growth:  604% growth in Domestic Intermodal  877% growth in Waste (for energy) and Biomass forecast Growth in Scotland

7 Strategic Freight Network “a core network of trunk freight routes, capable of accommodating more and longer freight trains, with a selective ability to handle wagons with higher axle loads and greater loading gauge, integrated with and complementing the UK’s existing mixed traffic network.”  I n CP4 the Strategic Freight Network has been funded in England and Wales only  CP4 interventions were mainly gauge clearance projects. These have unlocked immediate growth – gauge clearance from Southampton increased rail modal share from 30 to 35%  Key projects have been on time and under budget partly due to innovation – e.g. Southampton tunnel  The principles behind the Strategic Freight Network are designed to support value for money initiatives:  Maximising train lengths to minimise the paths needed and increase rolling stock utilisation  Flexible use of capacity  continue current practice of minimising operations during periods of peak passenger operation around major conurbations  Extended hours of operation to enable more services per week - increasing use of both capacity and resources

8 Proposed CP5 Strategic Freight Network Fund for Scotland In CP5 Network Rail and RFOA propose a £50 million Strategic Freight Network fund in Scotland to support:  Economic growth  Modal shift to rail  Environmental benefit/reduce road congestion  One intermodal train removes on average 50 equivalent lorry journeys.  Scotland’s economy and sustainability targets to increase modal shift to rail  Key enablers to achieve this include  Improving freight access and capacity on the core Anglo – Scottish corridors (ECML/WCML)  Provide improved capacity and connectivity to locations north of the Central Belt such as Aberdeen and Inverness that could generate further growth.

9 Scottish Freight Aspirations for CP5  Gauge Clearance  W10 ECML Berwick to Carstairs  Grangemouth  Dundee – Aberdeen – Inverness – Elgin  Glasgow and South Western  Capacity Enhancement Mossend Area:  Accommodation of 775m trains for intermodal traffic using Central Scotland terminals (allowing more efficient utilisation of network capacity)  Freight Capacity WCML/ECML:  Interventions required to accommodate forecast future Anglo-Scottish freight growth  Freight Capacity Central Belt – Inverness/Aberdeen:  Interventions required to accommodate future growth and improve access to the rail network for business in the North of Scotland  Infill Electrification:  Grangemouth  Edinburgh Suburban  Shotts Line

10 Justifying the Investment case for CP5  Investment in the network infrastructure is needed to achieve the forecast growth and modal shift to support economic growth  CP4 Strategic Freight Network funding in England and Wales has delivered high Value for Money schemes, (business case for West Midlands – Doncaster has a BCR of 7.7:1).  Strategic Freight Network bid for £350m of funding for England and Wales with 2 projects already confirmed in the Autumn Statement to align with Scotland fund  Strategic Freight Network CP4 governance structure is being treated as best practice and likely to be rolled out to other “funds” in CP5  A specific ring fenced freight fund for Scotland will enable:  Synergies with Strategic Freight Network Fund in England and Wales to enhance a national network  Assessment of CP5 freight proposals so the highest value for money schemes can be prioritised  Focus on freight (in a passenger dominated network)

11 Wider impacts of Periodic Review  Policy alignment is needed to support modal shift to rail  Retaining access charges at existing level is vital to continue to compete with road  Opportunity to increase intermodal movements by rail further and faster if access charges reduced  Concern over impact to Scottish open-cast collieries of proposed increase in coal access charges The Office of Rail Regulation is also reviewing access charges and incentive regimes for 2014-2019  Opportunity for different approach by Transport Scotland  Network Rail must be incentivised  to improve 7 day access  enable a reliable offering  Operators and Network Rail should be incentivised to work together to reduce each other’s costs

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