Comment

24.07.18

Lord Berkeley: The time for freight is now

Source: RTM June/July 2018

Lord Tony Berkeley, chairman of the Rail Freight Group, argues the case for rail freight port connections and considers the improvements that need to be made, as well as the uncertain shadow of Brexit looming over the industry.

Rail freight and ports have always been closely linked, and more so as the share of goods which the UK has exported and imported has grown over time. Most of the largest ports and some of the smaller ones have rail links, and at the major locations rail distribution is a fundamental part of onward logistics. Even with the decline of coal, rail’s role in moving other bulk products (such as steel and petrochemicals) and in inland distribution of shipping containers is significant.

On the dawn of Brexit, the importance of ports has never been more in the spotlight. Whether via the Channel Tunnel or seaport, goods traded from mainland Europe or transiting from a third country need to be able to enter and leave the UK as seamlessly and smoothly as possible or risk the economic consequences of those delays. The options for future customs arrangements are scarcely out of the headlines, but the same considerations apply to food health and food standards, animal welfare, and trading standards, as well as any border force checks.

An absence of clarity on how these requirenments must be met continues to frustrate the industry, who are only too aware of the time and resources needed to introduce and implement any new systems and build any new infrastructure.

There is also concern that, once a firm decision has been made by both the UK Government and the European Union as to future requirements for border and other controls, they will allow a reasonable time measured in years for the necessary infrastructure and IT systems to be put in place before any changes are made to the existing procedures. The industry well remembers the long-running failures and excessive costs of government IT systems.

Beyond this uncertainty and the fear of what is now known as a ‘cliff edge’ is the worry that perceived or actual delays at frontiers will affect some business sectors to the extent that they stop importing or exporting to the serious detriment of employment. All those involved in the port or rail freight sector are working hard to prepare for the most seamless transit arrangements, but remain held up by the lack of political direction.

Ports in the UK are, for the most part, privately-owned enterprises which, whilst not unique, places them in a different commercial environment than many of the large European competitors. This ownership model has led to very significant investment in port estates, including in their rail terminals.

Recently, both Peel Ports at Liverpool and PD Teesport have launched new rail services to Scotland, and over  the last decade it  is hard to find a rail-linked port which has not made some investment in its operations. This is on top of investment in quays, cranes, road facilities, on-site development for customers, and so on.

Yet, quite correctly, the port owners are reluctant to consider investment outside of the port gates, particularly in major inland links on road and rail, with such investment seen as a key role for government.

There are some exceptions: for example, Hutchison Ports is making a contribution to the costs of increasing capacity on the Felixstowe branch line as part of a planning condition, but the upkeep and development of the strategic road and rail networks has to be funded by the Treasury. This is recognised, and there have been some significant developments over time, not least the programme of work to ‘gauge clear’ the railway for modern container sizes.

Overall, however, there is a sense that this work is rather more piecemeal than strategic – and certainly in rail, with capacity needs driven more for the passenger than freight markets.

 DfT’s recently published ‘Transport Infrastructure for our Global Future: A study of England’s Port Connectivity’ is therefore an important step from government in addressing these concerns. Importantly, many of the report’s recommendations are targeted  not nat the port or transport sector, but internally, aiming to better ensure that the importance of ports and their economic links is recognised in transport investment decisions.

This includes establishing a ‘virtual team’ within the department to link modal teams and functions with common understanding and knowledge of the needs of the sector, and recognising that demand for freight transport changes over time, requiring capacity to be reserved on the tracks.

One also suspects, with ministers in charge of passenger services and seeking to add further passenger trains to the network at a time of falling demand, that there is a continuing need to remind them that the private sector freight has needs as well. We hope that the DfT virtual team will take a strong interest in this and similar schemes.

But the most important lesson to be learned from this study is the recognition that, in the case of rail freight, any improvement to rail access to ports must also be done alongside improvements further up the line to inland destinations to ensure that capacity and capability such as gauge provide for end-toend growth to meet demand. For example, the welcome capacity enhancement between Felixstowe and Ipswich will not reach its full potential until Network Rail completes work at Haughley Junction, Ely and Leicester. All these are required for passenger growth, but capacity within the design must include for freight growth as well.

It is clear that, however the Brexit cards ultimately fall, there is significant change ahead for the port sector and the rail and road operators who serve it. Those changes cannot be left solely to the private sector and a renewed impetus from government is vital at this critical time. The port connectivity study is an important first step in getting this right.

 

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