UK growth: future optimism tempered by present day concerns

The RailFreight UK Webinar heard a trio of leading rail freight commentators express confidence for the future of UK’s rail freight industry today. However, they also heard some well articulated arguments, pointing to significant challenges just ahead.

Despite being a small island, rail freight is playing a big part in moving the economy of the British Isles. For a nation that has always been regarded as a maritime power, Britain has always relied upon the railways to back up port operations. With traditional loads declining, there is even more demand for trains to carry trade.

Long term supply and demand

Mike Garratt, principal and founder of consultancy MDS Transmodal put the statistics of trade in front of the audience, with a clear message on the future of the industry. “It is a question of supply and demand, and how we model that”, he told delegates from his base in the north west of England. “The long term strategy for rail freight has to be based on a non-carbon economy. The carbon element has no future. Construction traffic and intermodal are growing, and will continue to grow. The work we have been doing for Network Rail and the Department for Transport shows that long term growth will be driven by these sectors”.

More boxes and more bulk on the rails many be a good combination for operators, but those flows are seeing contrasting fortunes right now. Maggie Simpson, director general of the industry representative Rail Freight Group, said her members were reporting mixed fortunes now, and longer term impacts on business too.

Maggie Simpson leads the Rail Freight Group and says members are having mixed fortunes in the current crisis but are optimistic about the future (image Simon Walton)

Speaking from London, Simpson said the situation in UK railfreight is mixed at the moment. “There is some really good positive news of services working really hard for retailers and supermarkets, keeping vital supplies flowing. Retailers have looked to the reliability of rail during the virus lockdown to maintain supplies”. Simpson also listed less obvious areas of activity where rail was shoring up the British economy during the current crisis. “Domestic heavy industry, such as steel, needs rail freight, but so too does less obvious but equally important flows like domestic waste, which is moved in no small measures by rail”.

Short term shipping bottleneck

In a point that was returned to throughout the morning conference, capacity is an issue that will need to be addressed, both in the present and in the future. “There will be short term capacity issue when the supply chain untangles”, said Simpson, with reference to the bottleneck in shipping, caused by the world-wide disruption to manufacturing and consumer demand. “Warehouse storage is a problem at the ports”, she said. “This is a critical issue that rail is well placed to help solve, by moving large quantities away from the quayside, to inland facilities, quickly”.

MDS Transmodal founder Mike Garratt has prepared growth reports for Network Rail and the Department for Transport (MDS Transmodal)

Longer term, getting away from ports was addressed by Mike Garratt, with a detailed examination of projected freight flows across the UK. The complicated relationships between government, operators and consumers – both freight and passenger – will put strain on the network in years to come”, he said. “What happens if you suppress rail freight demand, is that user costs go up, and road-based companies that were planning in switching to rail will not be able to do so. Changes in the way the passenger railway is managed could mean freight is left out of public decision making, and while I don’t think the industry benefits from government intervention in something it doesn’t understand very well, it is a complicated scenario. There needs to be an institutional change to address that potential loss of opportunity”.

Crucial to UK rail freight

Debate about future growth and capacity in Britain cannot of course ignore the massive HS2 project. So, the conference did not ignore the massive HS2 project, which was recently given the final green light to proceed with construction between London and the West Midlands.

Ben Goodwin, communications manager for the new high-speed line, joined from Birmingham to answer in front of the freight audience, just how the exclusively passenger railway would deliver for freight. “What is crucial to UK rail freight is the West Coast Main Line”, he said. “Around 90% of freight traffic uses the line at some point in its journey. In freight terms, what HS2 represents is a bypass for the West Coast, freeing up paths”.

Freight hubs for HS2

While Goodwin could not guarantee freight would have exclusive access to that additional capacity – that is a potential lobby issue for the likes of Rail Freight Group – he outlined just how much freight traffic the HS2 civil engineering project will generate. “HS2 is a massive freight operation. Our Willesden freight hub in London will operate 16 trains a day, moving more than six million tonnes of aggregates and tunnel spoil. That is 300,000 lorry journeys off the roads. Our Staffordshire hub, at Stone, will account for another eight trains daily”.

Ben Goodwin says HS2 civil engineering alone will generate significant traffic for rail freight with dedicated hubs in London and Staffordshire among other locations (image HS2)

Goodwin pointed out that HS2 has been in serious planning for ten years, and said freight has always been part of that process. While the lead time for freight and rail developments in general was a subject that many delegates raised, there were many useful ideas brought forward too. Train capacity, timings, traction, routing and timetabling were all explored. “A whole host of operational solutions have to be done”, said Maggie Simpson, in a point agreed by all three speakers. “Fundamentally you have to build extra capacity. HS2 is not the only thing we have to talk about and it is not the only answer to increase the capacity of the network properly”.

View again and convene again

Concluding, the speakers agreed that UK rail freight is continuing to grow, even in the most adverse of times. If rail freight can withstand the greatest peacetime threat that the UK and world economy has ever faced, then it has clearly demonstrated how robust it is.

Continued lobby is certainly called for, so that the rail freight sector does not fall out of the spotlight it currently enjoys. There is much more to discuss and act upon, and the consensus was that the industry should reconvene soon, to give voice to those actions.

Revisit the RailFreight Summit UK conference online by following this link to the video presentation.

Author: Simon Walton

Simon Walton is RailFreight's UK correspondent.

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