Diversity holds the key to freight’s future

But her message to those who hoped biomass would emerge as a like-for-like alternative to coal is that the transport of the material to newly converted coal-fired power stations will not yield great riches in the longer term. 

She explains: “If the big generators are going to burn biomass, they will have to go by rail - they won’t have a choice. The question is: will there be any big generation from biomass other than what we have now? Will Drax convert any more units? We don’t know the answer to that. Will more of the big generators switch over to biomass? It’s looking unlikely. There is some growth in that market, but it’s capped. It will be nothing like coal. 

“There isn’t a huge untapped sector that looks like coal, so we can’t say ‘we’re not going to move coal anymore but we are going to move this’. What we have to do is build up a whole range of different sectors and have a more diverse market. 

“There is distinct growth to be had in deep sea intermodal, particularly with ports such as Liverpool and Tees coming on stream, and retail intermodal we’re hardly touching. The construction market is growing year on year, and there are infrastructure projects coming such as HS2 and new nuclear power stations. There is a quiet transformation going on in the market from ancient old hoppers to new wagons, new terminals and longer trains, and this is all going on below the radar. 

“Retail intermodal is a difficult one to crack as you need warehousing in the right places, but that’s beginning to come through the planning system. Daventry is through, Kegworth is through , places like Slough are in the planning system, and those sorts of facilities will help get retailers on board by making the economics much better. 

“We had an event for automotives earlier in the year. I think it’s probably the first time we’ve ever had the automotive manufacturers and the rail people all together in a forum like that, and it was quite enlightening. There was a lot of misconception about what the auto-logistic sector were after and what rail could do. We export over a million cars and we import two million… and we hardly touch them. I think it’s just 10%.”

What about the mooted plan to add high-value goods to Class 43 HST services (RAIL 794), or even converting HSTs sent off-lease to freight-only by the end of the decade, as Virgin Trains East Coast and Great Western Railway displace them with Hitachi IEPs?

Simpson replies that high-speed inter-city freight is unlikely to be the silver bullet needed to transform the fortunes of the freight sector. However, making greater use of city centre railway stations is likely to emerge, as legislation becomes tighter on urban air pollution. 

“Is premium parcels or retail goods on HSTs a legitimate business for people to be looking at? Of course it is. If you take city centre freight, there isn’t an answer. They don’t want HGVs in an urban space, certainly in the daytime, and if you want to bring them in during nighttime you are up against a whole host of noise restrictions, all there for good reasons so people can sleep. 

“London has a population of eight million, who all eat and wear socks, so you have to get the deliveries in - there isn’t a magic bullet to that. If you want to get serious about emissions you’re probably talking about electric vehicles, which have range constraints. So surely having distribution hubs in railway stations that are right in the heart of cities has to be a good thing. 

“There are 250 convenience stories within a five-mile radius of Euston station and every one of those gets its delivery off a truck - as does every one of the retail units at Euston. There’s a massive loading bay out the back, and think about how much more concourse you could have if you didn’t have that. So there’s something there, and a market to be had. 

“Air quality pressures are going to drive things. We must position ourselves as part of a solution to try and make sure we are aligned with where the trends are going.”

Looking back at what was arguably a year that most freight operators would rather forget, Simpson believes there were still some shafts of light piercing the storm clouds of 2015. In statistical terms, not everything slid the wrong way, with the sector continuing to make great strides in efficiency. 

Pathing remains a perennial problem for freight operators, but that could be ameliorated by investment in boosting capacity. Perhaps that’s where Shaw comes in.

Says Simpson: “I think 2015 is the toughest year the FOCs will have ever had, but it’s important to remember that an awful lot of things shifted in a positive way. 

“Freight performance is in as good a place as it has ever been, and not just in its regulated targets. If you look at right-time departures out of terminals and arrivals into terminals, all of those are going in the right way. Retention of unused paths - 2,000 or so were given back, and although most were bits of paths, nonetheless they came back into the market. 80% of goods now go on two-thirds of the trains. 

“All those metrics go the right way, and the next one we have to tackle is efficiency of paths on the network. How can we send trains back round quicker and get asset utilisation up? 

“Some of the Drax biomass trains take four hours to travel 35 miles from Liverpool, which you can do in 35 minutes in your car. If you look at the cost of those wagons, if they were doing it in half the time you wouldn’t have had to spend so much on your wagons. Then there are the drivers. And every time you’re looped it costs 46 litres of fuel on average, which is not an inconsiderable amount of money.

“So there are a lot of things that if you want to be more competitive, you have to be able to do. You can’t make the economics work if the paths you get are too lousy. 

“Take London - the amount of containerised goods that come in is quite minimal, but a lot of the goods that end up in London have come on a train from Felixstowe via London, up to the Midlands and then back on a truck. So why aren’t they coming back on a train - there’s enough consumption in London for them to come back on the train? Or why aren’t they coming from Felixstowe direct in the first place? 

“The answer is if you could get that path in half the time you’d make the economics work, and then you’d be able to serve London by rail more effectively.” 

As for High Speed 2, well that’s another story, grins Simpson. It has been an exhaustive time for rail freight, and the sector has more than enough on its plate… for now. 

  • This feature was published in RAIL 799 on April 27 2016.

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