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Column - May 2019

Railís role in integrated intermodal logistics.

The transport sector accounts for 28% of greenhouse gas emissions, making it the largest emitting sector in the UK economy. Substantial cuts in surface transport emissions, which account for the majority of domestic transport emissions,are therefore essential to delivering the UK’s climate targets cost-effectively. Rail freight, which produces 76 per cent less carbon dioxide emissions than the equivalent heavy goods vehicle journey, can and should play a key role in reducing freight’s emissions.

The market for rail freight remains buoyant as the latest Office of Rail and Road (ORR) statistics show. Compared to the same quarter the previous year, general merchandise, mail parcels and domestic waste were up 25 per cent, metals up two per cent and construction up one per cent.Overall, consumer (intermodal) traffic has grown around a third in the past ten years with rail having over a quarter of the market out of the southern container ports; rail’s share out of Southampton is around 36 per cent. Clearly rail is well placed to offer long distance consumer services as well as the traditional bulk traffic.

Freight train photoRail and road complement each other and should play to their individual strengths. The new venture between Maritime Transport and DB Cargo is an example of integrated intermodal collaboration with road and rail operators combining their expertise to increase rail freight capacity and services. Maritime Intermodal will take on responsibility for DB Cargo UK’s terminals in Trafford Park, Manchester and Wakefield in West Yorkshire, with DB continuing to run haulage for all the joint services. The four services alone remove 32 million lorry miles per year.

The Eddie Stobart container linking London ports by rail to central Scotland has now been confirmed as a permanent service. The service, hauled by DRS using its class 88 electric locomotives, connects the port of Tilbury to Tesco’s site at Daventry for onward rail connection to Mossend in Scotland. Meanwhile, Freightliner has secured a further new contract with FSEW, an intermodal forwarder, for additional capacity between Southampton and South Wales which will take more HGVs off key congested corridors especially the M4. GB Rail freight has launched a new five day a week container service between Birch Coppice in the Midlands and Felixstowe further demonstrating the importance of rail freight to the consumer sector.

The continuation of the current Department for Transport (DfT) funding for rail freight grantsbeyond March 2020 is crucialto enable rail freight to play its full role in the supply chain. Otherwise, more freight will be transferred to road, as the freight market is distorted in favour of HGVs with HGVs receiving a £6 billion subsidy annually. Research from MTRU shows that HGVs only pay a third of the costs they impose on society in terms of congestion, collisions, road damage and pollution. These conclusions are in line with two other reports; Transport & Environment’s research (2016) which also found that HGVs across the EU were only internalising around 30 per cent of their costs, and MDS Transmodal’s study (2007) which found a very similar amount of underpayment: £6billion. 

The DfT’s rail freight grants go some way to compensating the rail freight industry for the lack of parity between HGVs and rail freight as well as helping the Government meet its productivity goals and its legally binding climate change targets. The current grants regime is only awarded for actual containers removed from roads so it represents excellent value for money for UK taxpayers. It has been effective at moving freight from to road to rail: container volumes have increased by 30% in the past ten years and construction traffic grew by 50% in the same period. The total annual budget has decreased from over £40 million to £15 million over the past 15 years. Any further budget reduction of the scheme would abruptly force back onto the roads significant rail flows and customers would lose confidence in the use of rail. Estimates indicate that on flows to the Midlands, around 250,000 containers would shift back to road with further knock-on impacts on other routes. Domestic intermodal traffic which is mostly supermarket flows are particularly vulnerable with narrow margins because they require a road leg at both ends, unlike deep-sea container traffic which only needs one road leg. Meanwhile, according to Inrix, congestion in 2018 cost the country £7.9 billion.

The scale of HGV involvement in road closures and the number of hours lost every year further highlight the productivity benefits of the transfer to rail. Earlier this year we sent aFreedom of Information Request to Highways England; the reply showed HGVs were involved in 43 per cent of critical incidents lasting more than five hours, and 56 per cent of critical incidents lasting more than ten hours on motorways and trunk roads last year despite the fact that HGVs account for just one in ten vehicles on our motorways []. Our safety research backs up those figures and shows that HGVs are far more likely to be involved in fatal collisions than cars. In fact, on average, over the past 11 years HGVs were almost five times more likely than cars to be involved in fatal crashes on minor roads; three and a half times more likely to be involved on motorways; and over three times more likely than cars to be involved in fatal collisions on A roads []

Rail freight is the cleaner, safer, low carbon alternative to HGVs which reduces road congestion and road damage. If the Government is serious about climate change, safety and congestion, it must continue its rail freight grants.

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