National Infrastructure Commission Freight Study Call for Evidence

Submission from Rail Freight Group (RFG)

February 2018

  1. RFG is pleased to submit evidence to the National Infrastructure Commission’s Call for Evidence, as part of its inquiry into freight transport in the UK. RFG is the representative body for rail freight in the UK. We have around 120 member companies who are active in all areas of the rail freight sector including train operators, customers, supply chain and rolling stock companies, ports and terminal operators, developers and support services. Our aim is to increase the volume of goods moved by rail.
  2. RFG strongly supports the concept of the NIC’s freight study as an important way of raising the value of freight transport to the UK economy, and looking impartially at the future challenges and barriers.

General Comments

  1. Freight distribution is critical to UK economic success, for business, importers and exporters, retailers and the general public. Yet there is little political recognition of this and the NIC study is therefore a vital piece of work in highlighting the sector and its infrastructure needs. Rail freight has a long term role to play as part of the UK’s freight distribution network, but to enable it, along with other modes, to be successful, we need to encourage a new approach between Government and the private sector, which is able to focus on the positive benefits as well as externalities of freight transport, and ensure that the supporting policies and infrastructure are in place.
  2. Rail freight is a key component of the overall freight market, representing around 10% of overall surface transport, around 17-18bn tonne-km per annum. In key markets and sectors, rail’s market share is significantly higher, in particular construction materials and intermodal transport, as well as biomass and other bulks. Full details on rail freight statistics can be found on the ORR’s website Recent work by KPMG for Rail Delivery Group shows that for the calendar year 2016 rail freight delivered economic benefits totalling £1.7bn per year. This includes productivity gains for British businesses of around £1.17bn and congestion and environmental benefits of over £556m.
  3. We recognise that rail freight will only ever be one component of freight distribution and must work effectively with other modes. Rail has key advantages for certain types of movement, including longer distance trunk haul, high volume distribution and access into urban centres for certain traffic types. Freight infrastructure must therefore best support multi modal transport, linking road, rail, ports and water freight, enabling each to play to their strengths.

What are the key constraints to the effective and efficient movement of freight in the UK and what can be done to overcome them?

What do you see as the key drivers to a successful freight system that is fit for the future?

  1. Network Rail have produced forecasts of long term rail freight demand and are presently consulting on shorter term forecasts to 2024 which take better account of network constraints. DfT have also produced constrained forecasts as part of their rail freight strategy development . These forecasts demonstrate that rail freight growth can be achieved where sufficient infrastructure is in place, and where the economic position between road and rail is sufficiently well balanced.
  2. In particular, long term growth of rail freight will need;
  • Investment in network capacity at key bottlenecks, and a balanced approach to passenger and freight on the network, which is likely to need Government support. This must include measures to increase the efficiency of rail freight operations on the network.
  • Investment in ports, terminals and SRFIs which can be funded by the private sector with the right planning framework.
  • An uplift in technological innovation which will need input from Government and private sector for larger scale projects such as digital signalling, but which can be driven by industry elsewhere.
  • A coherent approach to alternative fuels and long term sustainable transport recognising that freight transport has particular needs but must also fit into an overall rail and road framework.
  • Recognition of the different charging frameworks for passenger and freight and for road and rail and a move to a more modally common approach where possible.
  • Advocacy and support from Government.

Which are the key freight corridors that matter the most? Where are the bottlenecks in the freight network, and what investments in upgrades could deliver the best value for money for freight efficiency and UK plc?

  1. In 2009 DfT defined the policy of the Strategic Freight Network which aimed to provide a core network of routes fit for rail freight. Since then, Network Rail has worked to upgrade routes for freight, including for larger gauge and for longer trains. . Presently a number of schemes remain in delivery, including upgrades to the Felixstowe branch line to allow more trains to operate, longer trains from Southampton and from Buxton, work at Port of Liverpool and to Immingham and other schemes and studies.
  2. Government has indicated that there will be some further funding available for freight in the next control period from April 2019. A long list of potential infrastructure schemes was summarised in Network Rail’s Freight Network Study The priority schemes are being developed but include further work on the Felixstowe to Nuneaton route, freight in North Transpennine upgrade, Channel Tunnel routes gauge capability and smaller projects to improve capacity and capability.
  3. Scottish Government has also provided a Scottish rail freight network investment fund as described in its rail freight strategy and has given strong support for rail freight growth in its High Level Output specification for CP6
  4. Rail freight can also benefit from the released capacity that will be generated by HS2 south of Birmingham and then Crewe. This is an important part of the case for HS2.
  5. In addition to Government investment in the rail network, there has been significant private sector investment in terminals and rolling stock. Rail Delivery Group estimated this at around £2.25bn in 2014, and the investment has continued subsequently. For example, this year already we have seen a new rail linked site iPort open in Doncaster, planning permission given for a rail site at Cricklewood and a new to rail customer open a location on the Greenwich peninsula.

To what extent are the economic benefits of freight factored into wider transport infrastructure investment planning?

  1. In assessing the business case for a rail freight scheme, the main benefits included are the environmental benefits of using rail over road. These are principally defined in the Mode Shift Revenue Support grant calculations which provide a ‘pence per mile’ benefit by road type. In some cases, estimates of productivity benefits are also included.
  2. This means that investment decisions to support rail freight are made by comparing it to other freight modes. There is no attempt generally to look at the wider societal value of freight movement. In rail schemes there is no attempt to compare the value of freight moved to passenger traffic for example in the off peaks which could also inform operational and capacity allocation decisions on congested networks.
  3. In assessing rail freight it is also important to look by market and by corridor, as values can be very different to the overall national picture. Research for DfT by Freight on Rail highlighted significant benefits from a greater use of rail freight on key corridors including the M6, A14 and A34

What are the regulatory and legal issues that, if changed, could improve freight efficiency without increasing costs or reducing efficiency?

  1. There are many areas where the regulatory and legal frameworks for different modes of freight transport differ. In some cases these are inevitable, for example in railway timetabling, but in others they could be more aligned. This would aid simplicity for users, and prevent distortions between modes which prevent each playing to their strengths.
  2. One such example is charges for rail access, which are calculated by ORR during the periodic review of Network Rail. . This includes a great deal of scrutiny of costs by mode, including by different rolling stock types, as well as additional charges for performance, use of electric traction and so on. This compares to road freight thatpaysonly fuel duty and VED set by HMT. Whilst there is some validity in both approaches, the difference makes it difficult to compare modes. The complexity of freight charging makes it hard for customers and operators to understand, and the five yearly process adds uncertainty which is unhelpful for a sector with long asset lives and investment cycles.
  3. Rail freight also needs modern and fit for purpose terminals and to achieve this, we need a planning system that can deliver new facilities and safeguard existing ones. Larger Strategic Rail Freight Interchanges are covered by the Planning Act 2008 and the National Policy Statement for National Networks and this has already helped to support the development of new sites at Kegworth and Daventry (Phase 3) with other sites in development.
  4. However, smaller locations can still struggle to achieve consent, particularly in the south east, and existing terminals are often affected by issues with inappropriate adjacent development. The Mayor of London’s draft London Plan has made some good proposals for the safeguarding of rail sites and wharves, and more generally on provision of industrial land, and extending such approaches nationwide would be appropriate. .

How might the demand for freight develop and change over the next 20-30 years?

How has the demand for freight, and types of freight, changed over the last two decades, and what will be the drivers for changes in the future?

  1. Rail freight has changed significantly over the last two decades as a consequence of privatisation. Over the same period there have been major changes in the markets moved by rail freight. The graph, from ORR data, shows the bn tonne-km moved in each commodity group. Most striking is the decline in coal over the last five years, which has arisen due to changes in generation policy away from coal to gas and renewables.

Freight Billion Tonne-Km moved


  1. The decline in coal however masks the changes in other commodities. The revised graph shows more clearly the significant increase in intermodal rail freight over the last twenty years driven by economic changes towards greater imports, and an increase in rail’s market share driven by increased competition, and investment in ports, equipment and the network. Construction materials have also risen consistently, as businesses have increased their presence on rail, and larger quarries have replaced smaller non rail linked sites.

Freight Billion Tonne-km excluding coal


  1. Presently we are expecting to see continued growth in these key market sectors, including domestic intermodal services between new rail linked warehouses, in line with the freight forecasts (as above). The key factors underlying these forecasts include;
  • Growth in construction activity including infrastructure and housebuilding coupled with continued pressure to increase rail’s market share particularly into urban centres.
  • Investment in strategic rail freight interchanges which enable more efficient rail freight services to operate for domestic retail products between distribution centres.
  • Continued growth in imports and exports and in rail’s market share from major ports.
  • Opportunities for growth in smaller markets such as automotive and steel
  1. Looking to the future, there are a number of factors which could influence demand for freight, and rail freight. These include;
  • Post Brexit changes in trade patterns, either as a consequence of new trading relationships or changes to distribution patterns through different ports. For example, a growth in freight at East Coast ports could increase demand for rail from these locations, and border controls for road on the Dover straits could help grow through rail freight via the Channel Tunnel.
  • Global changes in manufacturing locations could similarly change supply chains and rail flows, for example, any reshoring or near shoring of manufacturing. Again, this could change distribution patterns in the UK.
  • New approaches to industrial strategy which could generate new industrial locations capable of using rail, particularly if coupled with a proactive Government rail strategy.
  • Changes in how mineral products are used and supplied to the UK, and the demand for such products for major infrastructure construction. For example, any move to imports over domestic production, or changes in construction technique. However, given the long expected lives of present quarry sites, this is expected to be a long term shift rather than a short term one.
  • Changes in consumer demand and online retail, although demand for the primary haul to warehouses is still likely to be necessary.
  1. The CILT 2035 Freight and Logistics report considered some of these factors in more detail.

How is the freight industry planning for future changes in the demand? What levers might be available to shape future demand for freight transport?

  1. Network Rail’s Freight Network Study (para 9) provides a network perspective of the infrastructure planning needed to support long term growth of freight and passenger. However there are a number of areas which are less well considered such as the release of capacity from HS2 and the impact of digital railway.
  2. Whilst it is difficult for the rail freight industry to shape overall demand for freight transport, investment in rail linked warehousing and modern construction terminals is helping to reduce associated road movements, and enable ‘value add’ processes to take place alongside the railhead.
  3. The rail industry has also been working to maximise the use of each train to reduce demand for capacity on the network. Rail Delivery Group analysis shows that the number of freight trains run fell by a third, from over 415,000 in 2002/03 to under 276,000 in 2012/13. Adjusting for tonnes carried, tonne miles have increased by 17% over the same period. This is a net increase of 70% in tonnes per train. Including changes in distances travelled, such that each freight train now carries over 50% more cargo than it did 10 years ago.’
  4. This trend has continued since that publication, with intermodal trains working towards 640m length, and construction trains working to extend their loaded volumes including in some cases use of 2 locomotives. New wagons also have increased payload over those they replace. Network Rail investment is supporting this in key locations.

What effects does congestion have on the efficiency of freight movement and emissions?

  1. Operating on a crowded rail network impacts on the efficiency of rail freight and on asset utilisation and fuel use. Analysis by Tarmac shows that the average speeds attained by their trains is consistently below 30mph, and as low as 7mph on some routes.
  1. Overall it is estimated that the average attained speed for rail freight is around 25mph, owing to poor paths and congestion on the network. (terminal time is excluded).
  2. Work for the Department for Transport by Transport Systems Catapult (slides already supplied to NIC) assessed the impact on rail freight of such ‘dwell time’ (essentially unproductive time during a journey) and concluded that,;

Dwell Impact on Industry Costs

•impact of delay estimated to be £3.30 / minute

•Industry cost of timetabled dwell time £27.1m per annum

Dwell impact on freight users

•Impact of journey time savings valued at £0.35 /minute

•Elimination of dwell time would lead to estimated £2.8m per annum in benefits to freight users

Dwell impact on demand for rail freight

•Achieving journey time reduction of 15% (elimination of dwell) estimated to lead to increase in demand, and hence industry revenues, of 20%

  1. Network Rail’s plans for CP6 include some targets to help improve freight velocity, and digitisation of the rail network is also expected to help drive efficiency. Network Rail’s System Operator function also has an important role to play in developing these areas.

How does congestion impact upon the productivity and economic contribution of freight? To what extent does congestion affect changes to mode, time or other freight choices?

  1. Rail freight tends to avoid the passenger peaks, and a significant proportion operates at night, but there are limitations around engineering work, and planning conditions at some terminals which mean that they cannot open out of hours to receive a train.

How does congestion affect the environmental impacts of the movement of freight?

  1. Poor journey times means that for diesel freight trains more fuel will be needed for each journey. Train operators are fitting some locomotives with start – stop technology which can switch off the engine when stationary for more than 15 minutes, and this is used now when in terminals or yards.

With limited space for new infrastructure, how can we better use our existing urban network to support freight? Are there changes – such as changes to modes, methods, or delivery times - that could help reduce the stress on the urban transport network?

  1. Although rail freight cannot replace road freight for urban deliveries there are areas where it can facilitate more efficient deliveries. Presently, use of rail to serve construction terminals in urban centres reduces the long distance movements for supply of materials, significantly reducing road movements
  2. There have also been trials of moving roll caged freight into passenger stations for onward distribution to store by electric vehicle, and small parcels and packages are now carried on some passenger trains . There is ambition to exploit this model for other routes and services and to look at rolling stock options to enable freight to be delivered into urban centres, for example using older passenger trains which are no longer required.
  3. Industrial property development could also offer opportunities for modern rail hubs in urban centres .

How can freight lower its carbon and air quality impacts?