The remarkable rise of rail freight
The success of rail freight since privatisation presents new opportunities and new challenges.
Introduction
Mr Chairman, ladies and gentlemen, I’m delighted to be here today (15 June 2015) to talk about the successful British industry that is rail freight.
I am really pleased to be back as Rail Minister and to add rail freight to my portfolio.
Some of the ins and outs of freight are new.
But I have seen and heard much of the benefits of well-directed freight investment.
I visited the vital port of Immingham to hear about the plan for investment there.
And last March I formally opened the upgraded Great Northern and Great Eastern Joint Line.
I saw the potential of the DfT-funded transformation of that 86 mile stretch, both for higher quality freight paths but also for new passenger services.
I believe there are many other projects out there where some joint-thinking could deliver benefits for both passengers and products.
And later in these remarks I am going to ask for your help in finding those opportunities.
The government’s focus on infrastructure
But before then, I wanted to say something about this government’s priorities for rail freight, and to put them in the context of the government’s focus on infrastructure as a whole.
Our starting point is a belief that successive governments have failed to invest the sums necessary in infrastructure across the UK.
Most of our railway network dates back to the Victorian age.
Much of our motorway network dates back to the 1960s.
And we haven’t built a new full-length runway in the south east of England since the Second World War.
Yet demand for transport is increasing.
We are making twice as many journeys as we did in 1970.
As a result, parts of our transport network are now full.
But this government is determined to turn things around.
It is no accident that transport featured second in the manifesto.
Both the Prime Minister and the Chancellor can tell you what a Pacer is.
I would love it if they could also confidently reference a Class 66.
So, our plan is to invest record amounts in infrastructure.
More than £70 billion between now and 2020.
On the railways, we are building HS2, Crossrail, and pressing ahead with plans for Crossrail 2.
But we are also funding the biggest investment in our classic rail network since Victorian times.
And rail freight is at the heart of that plan.
Because this government wants more than anything to deliver balanced, sustainable economic growth.
And you can’t grow a local, regional or national economy without moving people and products.
The success of rail freight
You have been a great success.
Since privatisation your growth and performance has been remarkable.
Rail’s share of the freight market has doubled to 11%.
Productivity has improved significantly, with rail freight carrying 70% more goods but with 30% fewer train paths.
All reducing costs for customers.
And we know your industry has an appetite to increase its markets.
Britain now has one of the most dynamic rail freight markets in Europe.
We compare well further afield, too.
Consider China.
A country vastly greater in size than the UK.
And a country experiencing meteoric growth in construction, manufacturing and – most famously – railways.
Yet in the UK, rail has a significantly greater share of the freight market than it has in China.
That share of the UK freight market is good news, because the benefits from rail freight are clear.
It can help reduce road congestion.
It is significantly safer and less polluting than road haulage, and it is highly reliable.
And thanks to work the Rail Delivery Group has undertaken, we now know the value of those benefits to the UK economy: some £1.6 billion every year.
Forecast freight growth over the next 5 years is even greater than passenger growth in percentage terms, and the longer-term forecasts are equally strong.
So over the next 5 years, the government wants to work with the rail freight industry to realise that growth.
And to help remove the barriers that might inhibit it.
We have started as we mean to go on.
The work that has already been done to provide gauge clearance on strategic routes, and to make room for longer freight trains, will help the industry improve its productivity and efficiency.
All the better to compete with road haulage.
Both the Doncaster North Chord and the Ipswich Chord have given us significant improvements in rail freight journey times out of Immingham and Felixstowe.
We have just opened the Reading flyover, providing grade separation to improve both rail freight performance and reliability for passengers.
At the same time, we are looking at new opportunities for carrying goods by rail.
We know there have been pilot schemes for carrying low-bulk goods on passenger trains.
Such as the partnership between East Midlands Trains and 5PL on routes between Leicester, Nottingham and London.
There should be scope to grow this market.
We are looking at other transport industries for ideas, too.
Passenger airlines can earn extra revenue by carrying goods, so if passenger trains have off-peak services with very few passengers, why should they not make use of available space to offer a parcel service?
Beyond our borders, membership of the network of European Rail Freight Corridors will open up new possibilities.
European partners in France, Belgium and the Netherlands see this as a major potential area for growth.
And some of the rail freight corridors are also looking at links with eastern Europe and with Asia.
In particular, China is starting to grow its inter-modal market and is interested in rail freight links through to Germany.
There is no reason these couldn’t extend to Britain.
New opportunities and new challenges
However, just as there are opportunities, there are some significant challenges ahead, too.
The world is rapidly changing.
And rail needs to evolve if it is going to retain the competitive advantage that it’s enjoyed in the past.
The automotive sector is evolving at a tremendous rate.
In the lifespan of 1 freight train, we can expect 4 or 5 generations of HGV.
Each delivering higher performance, greater efficiency and lower emissions.
Electrification of the road network will challenge rail’s green credentials.
We’ve seen around 30,000 plug-in car and plug-in van grant claims submitted since the grant scheme began in 2010.
Autonomous road vehicles and the platooning of lorries are being developed around the world.
And trials of autonomous road vehicles will take place here in the UK in Greenwich, Bristol, Milton Keynes and Coventry.
Rail needs to respond to these developments.
In recent work that the DfT has done on technology and innovation, 3 themes stand out which are all relevant to rail.
First, energy.
Just as we have with road vehicles, we need to think about how we power the rail network and ensure our use of energy is efficient.
The electrification programme is key, but electrification is unlikely to be cost-effective everywhere.
That’s why there is so much interest in the Independently Powered EMU – also known as the battery powered train – which has recently completed several successful weeks in passenger service.
And the energy challenge will be more acute for freight, where you need a locomotive that can run for long periods on non-electrified routes.
Not to mention the challenge from European legislation on diesel emissions, and the need to reconcile the size of compliant diesel engines with the smaller locomotives needed for the UK’s narrower loading gauge.
That brings me to the second theme: new kinds of infrastructure, and so-called intelligent assets.
Crossrail’s smart infrastructure is a great example.
Sensors on trains, low-maintenance components, new materials that increase the life of the infrastructure.
For freight, there is the challenge of creating similar innovations, particularly to reduce wear and tear on the track.
If we can get that right, it should then benefit the operators through reduced track access charges.
The third theme is connectivity, data and automation.
In signalling and control we are seeing a total transformation.
Traffic management systems promise to improve the capacity of the network by allowing an increased number of train paths.
Inevitably, rail freight operations will be among the first to experience the fresh challenges of operating over new signalling systems.
New challenges are not alien to the rail freight industry, but the industry needs to keep up.
Which is why I am particularly grateful to the Railway Engineers Forum for inviting me today.
Because you are the people whose expertise will be critical to ensuring that the rail industry has the technology it needs to develop its competitive edge.
Conclusion
So, as promised, I would like to ask for your help.
What do you need from my department and from government?
More joined-up investment with passenger-facing improvements?
Better planning guidance to make sure critical road and rail interfaces are built where they should be?
Help in raising the profile of rail freight? After all, you are a great privatisation success story
I want to listen to you and your colleagues across the industry.
I am looking forward to working with you all.
Thank you.