26th Annual Rail Freight Group Conference review

There was a record turnout for the 26th Annual Rail Freight Group conference, organised by Waterfront, in April in London.

Our Executive Director Maggie Simpson opened proceedings by suggesting that the changes coming over the next 12 months might be more significant that we appreciate today – with the start of CP6 (Control Period 6), including route based regulation, and a new chief executive at Network Rail, not to mention the effect of Brexit negotiations.

John Larkinson, Director of Railway Markets & Economics, ORR (Office of Rail and Road), said that there were many changes in Control Period 6. Network Rail will have less flexibility as a public body in terms of, for instance, moving money between operations and capital investment, or back and forth between years, which will make it harder to function.  He suggested that ORR is looking at whether there would be a cap and phasing-in of the new variable freight charges. And he said the ORR is making a big effort to encourage third party investment and to say ‘we are open for business’.

Kate Jennings, Deputy Director of Rail Strategy projects, DfT, said that rail freight is a real success story – ‘the poster child’ – in terms of private sector investment and that the Department is trying to ensure that the process for taking forward third party investment proposals and engage with Government is as transparent as possible. It is holding some Rail Opportunity Days in May. She also emphasised the work that DfT have been doing to ensure that freight stakeholders are included in the franchise process.

Paul McMahon, Managing Director, Freight and National Passenger Operator (FNPO), Network Rail, looked ahead at the work his team will be doing to help support freight growth.  He called on freight operators and customers to help his team make the case for the funding of future schemes which are important to their businesses. One initiative is an end-user score card (as a further step to the operator score card) to increase communication with more stakeholders. He noted that freight makes up 3% (600) of the 22,000 trains a day on the network, but 7% of the mileage and 20% of total gross tonnage.

Tim Morris, Chief Executive, Major Ports Group, explained the future outlook for UK ports and emphasised the link between ports and rail freight. He noted that the vast majority of cargo passing through his members’ ports comes from outside the European Union and moves very swiftly through the port. In terms of Brexit, the highest ‘risk’ of delays comes from ro-ro, shortsea, turn up and go traffic, but an opportunity may arise to change the regulatory framework given that most UK ports are privately owned whereas most European ports are owned by central or local government.

Steve Freeman, Managing Director and David Cross, Commercial Director, iPort Rail, gave an update on the new iPort Rail intermodal site near Doncaster which welcomed its first train in February, and is set to grow its rail volumes over the year. David emphasised that we all need to promote the benefits of rail freight more to counteract the stories of platooning and lower emissions coming from the road sector.  They also called for more attention to be paid to increasing train length and average speed.

Carl Kent, Head of Strategy and Innovation, GB Railfreight, gave an overview of the company’s business development activities and said that road, not other FOCs, is his company’s main competitor.  He called for the advantages of new rolling stock to be reflected in lower track charges, and for quicker decisions on access rights. He said the shortage of drivers needs to be tackled by marketing it as a good, well-paid job to younger people, and by looking at different ways drivers’ work is organised.

Debbie Francis, Managing Director, DRS, looked at the factors affecting future traction choices.  She explained that the relatively small number of locos on the UK network made designing and building new rolling stock difficult, and that ‘the saga that continues to be the electrification programme’ doesn’t help with planning. She speculated that maybe the FOCs should look at joint procurement to increase buying power and that as a sector, we need to push our green credentials more widely

The panel discussion that followed looked at creating the loco of the future, especially in light of the Minister for Rail, Jo Johnson’s declaration that he wants to see all diesel-only trains off the tracks by 2040. Jon Caen, Senior Account and Marketing Manager, Electro-Motive Diesel and Chris Polack, Director at Bootham Network Solutions, joined Debbie on the panel and a lively discussion including the delegates followed.

Some suggestions included using battery power to get through the track sections where electrification is difficult, or that maybe a ‘power by the hour’ model would work. It was noted that meeting the Minister’s target would need £2-3bn of replacement locos so where was the finance going to come from? And, as cleaner air and reducing carbon are not necessarily compatible, how are priorities decided and how do we ensure a level playing field with road in terms of paying the actual environmental costs?

Thanks to all the speakers, to the delegates for asking searching questions, to Waterfront for organising the conference, Freshwater for their sponsorship and to Addleshaw Goddard for hosting the event.