Logistics UK and its members aim to ensure rail reform is a success

As passenger numbers collapsed there was a greater awareness about the role rail freight played in keeping our supermarket shelves stocked and our supply chains moving.

FARE INCOME COLLAPSES DURING PANDEMIC 

The rail sector was heavily impacted financially during the pandemic as income from passengers disappeared overnight. Recent Office of Rail and Road (ORR) figures, however, show that things are gradually improving, with three times as many journeys made in the first quarter of 2022 as the same period last year. There is a concern that as passengers return, rail freight risks going back to the quiet workhorse of the industry. Compounded by the biggest rail reform in decades, freight will have to make sure it continues to use its voice to influence the future railway for the better. 

CONSULTATION ON LEGISLATIVE REQUIREMENTS

Last month an open consultation on the legislative requirements to implement the recommendations of the Williams-Shapps Review was published. Reforms are wide-ranging and far-reaching. There is an understandable weighting towards passenger issues, fixing the beleaguered franchising system and bringing track and (passenger) trains closer together.  

The consultation highlights many areas of interest and potential concern for freight, which must be an integral part of the discussion,” said Kate Jennings, Director of Policy, Logistics UK, “Whilst it is important to approach rail reform positively and optimistically, the consultation highlights some threats for rail freight in the implementation of the Review.”  

THREATS TO RAIL FREIGHT MARKET

A competitive rail freight market depends on fair and equal treatment with passenger operators. The mechanism to achieve this over more than two decades has been vertical separation and strong rules around access and performance.

“Whilst not perfect, it has worked,” Jennings said, “Despite track and train being separated, there has been some great collaboration both operationally and on projects.”  

Although the reforms do not suggest vertical integration, the proposals do involve a much closer relationship between the infrastructure manager – under Great British Railways (GBR) – and the passenger operators. Their relationship will be intertwined through the proposed passenger services contracts and policy setting in GBR (including on things like fares for example).

PROTECTIONS FOR RAIL FREIGHT

During the development and implementation of the reforms, it will be more important than ever for rail freight to advocate for protections to be put in place. This will include influencing the reform of the plethora of rules and processes that will be opened up to make sure there are adequate safeguards and incentives in place to not only help rail freight survive, but also thrive.  

THE SCALE OF THE TASK

The consultation highlights that changes will be implemented with as little primary legislation as possible. A pragmatic approach, but one that means that many changes – whether to the infrastructure manager’s licence or rules around planning – are on the table for industry to resolve.  

“Whilst the industry is more than capable, it can also be stretched thin due to the volume and potential speed at which it has to work,” Jennings said, “Rail freight is already lean; busy people will have to dig deep to make sure there is adequate representation during development.” 

OPPORTUNITIES FOR RAIL FREIGHT

Far from all being doom and gloom, Jennings is keen to stress that with reform comes opportunity. 

“The development of a Strategic Freight Unit (SFU) within GBR could give greater prominence to rail freight,” she said, “We are already seeing positive and ambitious leadership within the GBR Transition Team. Keen to engage, eager to raise freight’s profile and ambitious in its approach.”  

Continuing on this course could safeguard against some of the threats of greater integration of track and passenger services, Jennings believes. A dynamic SFU could go further and help lay the foundations of a more strategic approach to the rail freight network and its development. The rail freight sector will be willing and supporting this outcome. 

FREIGHT GROWTH TARGET COULD DRIVE SUCCESS

The proposed statutory rail freight growth target could also be a driver of success within GBR. An ambitious rail freight target in law will mean that colleagues in GBR and across the industry have to think freight and sometimes even put freight needs as the top priority.  

Embedding this target through the SFU and weaving it through the reforms is an opportunity for the sector.  

“To make this target ambitious it is critical that not only freight operators, but also customers and potential users, are engaged in developing it,” Jennings said, “Customers drive demand – potential customers grow it even further. There appears to be an appetite to have this conversation, and Logistics UK will be making sure it is front and centre of any target development to help these voices be heard.”  

FOUR MEASURES OF SUCCESS

To determine whether reform has been a success, Logistics UK will be considering the proposed changes in light of four key principles. 

1. Freight operators have access to high-quality, reliable paths and are treated fairly during the planning and operation of the railway.  

This will largely be a test as to whether the safeguards of integration of track and train have been successful. It will also measure whether enhancements to the railway delivered by GBR are releasing new paths to freight and facilitating growth. 

2. Customers can make easy end-to-end multimodal journeys with rail at the heart. Consignments rarely make their whole journey just by rail.  

Customers tell Logistics UK that smooth multimodal journeys are critical to making rail more attractive. A reformed industry, committed to freight growth, will support seamless journeys for freight. 

3. There are clear and predictable plans which support private sector investment in the railway.  

Rail freight drives significant private money into the industry. Certainty and clear plans mean that private investors are more likely to put money into rail and invest in major capital assets such as greener rolling stock or improved terminals. Reform of rail business planning could support this and bring continued investment into Britain’s railways.  

4. Policy and innovation to support net zero rail. The government has set ambitious, binding net zero targets and the rail industry is keen to play its part in meeting them.  

Whilst rail is a significantly lower emission way of moving freight it can always improve. Reform should have sustainability at the heart and process and regulatory changes must support this. Reform should also encourage and enable the innovation required to find technology solutions to our biggest rail net zero challenges.  

“Logistics UK and its members are looking forward to working with the Department for Transport and the GBR Transition Team to make sure reform is a success,” Jennings concluded, “There is a lot of work to do, but a lot of will to get things right for a bright and sustainable future for rail freight.”  

*www.logistics.org.uk/rail

Published On: 07/07/2022 16:00:01

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