Attracting rail freight through the Tunnel
Despite the advantages offered by international rail freight, the Channel Tunnel continues to operate significantly below capacity. PAUL STEPHEN joins a panel of industry experts to find out how rail can boost its ailing market share
The official opening of the Channel Tunnel on May 6 1994 by Her Majesty The Queen and French President François Mitterrand marked an exciting time for rail freight.
Directly plugging Britain into the continental rail network offered the potential for long flows of wagonload and intermodal traffic, as well as a transformation in its competitive position against road haulage, ferry services and shipping.
Yet, rail freight through the Channel Tunnel has never come close to realising its full potential. Figures from 2016 show that only one million tonnes of freight were moved via 1,797 services.
This figure is well down from a peak of three million in 1997, and far short of early predictions that some 22.5 million tonnes would be shifted each year by 2017.
It also represents less than 5% of the 20+ million tonnes of goods that are moved every 12 months on the 1.6 million trucks and lorries carried by roll-on roll-off ‘Le Shuttle’ services.
In 2013, Groupe Eurotunnel commissioned a report into the decline of freight traffic. It found a number of root causes, including frequent strike action on the French side of the Tunnel and widespread disruption to UK-bound services by illegal immigrants.
Other deterrents to conveying goods by rail included varying train lengths across the continent (a maximum of 500 metres in Italy compared with 750 metres in the UK and France), and the smaller UK gauge that necessitated shippers to use non-standard
wagons to move international freight from
HS1 and directly onto the UK conventional network.
Fast forward to the present day, and all cross-Channel operators have recently had an added problem to contend with… Brexit.
The UK’s departure from the European Single Market on December 31 2020 has inevitably led to the reintroduction of non-tariff barriers to trade, including new export rules and increased paperwork and customs checks.
To make matters worse, the imposition of this new regulatory regime came hot on the heels of a temporary closure of the border between Britain and France in late December, over fears of the spread of Coronavirus.
This toxic combination led to total freight volumes moving through the Channel Tunnel by road and rail falling by an estimated 38% in January, compared with the previous month.
It has since rebounded to 98% of normal levels, which probably suggests that Brexit and Coronavirus-related disruption will be short lived and will not affect the longer-term prospects for cross-Channel freight.
But if rail is to have a larger part to play in that future, then we must first try and understand why the original market proposition has failed to attract greater use of the Channel Tunnel.
The concept in 1994 was to establish consortiums to act as traffic aggregators, in much the same way that British Rail had sorted intermodal freight and created wagonand full trainload traffic for its train ferry business.
BR aggregated export goods and commodities from agents, couriers, consigners, hauliers and manufacturers, which were then transported by rail and BR’s Sealink ferry services on routes including HarwichZeebrugge and Dover-Dunkirk.
These ferry services carried approximately two million tonnes of freight a year, before eventually being made redundant by the Channel Tunnel.
BR sub-sector Railfreight Distribution (RfD) became responsible for train ferry traffic from 1988 and then container services in the run up to the opening of the Channel Tunnel.
RfD was eventually broken up before being privatised and sold in parts to Freightliner and EWS in 1997.
Julian Worth, former EWS Marketing Director, Transrail Freight MD and director of BR’s metal business, explains: “The physical product on offer from the Channel Tunnel was right, but the route to market was an issue. It’s fair to say that the traffic aggregators were a mixed bunch and had varying success.
“Unilog [a joint venture between RfD and Interferryboats NV] was perhaps the least promising one because of the shorter distance it had to cover from the UK to Belgium. But it was excellent, primarily because it was made up of people previously involved in Freightliner Europe container services from Harwich who knew the market and were able to go straight to the people who consign freight. There’s no substitute for that.
“The other two routes were longer distance, and we got up to 15-20 trains a week to Italy and were moving well over 500 intermodal units a day. The Spanish route also wasn’t bad, and the Transfesa (now majority-owned by DB) trains have been kept going all these years on the back of the Ford components move that has always provided its baseload.
“Other markets were less successful. A train to Lyon, Avignon and Perpignan was always a bit borderline, while there was almost nothing on the German axis.
“On the whole, the idea was OK but success or failure depended on the degree of expertise among people running those aggregators.”
David Cross, who spent 25 years working in deep sea transport for P&O before joining EWS [later sold to DB] in 2007 to run its domestic and international intermodal departments, adds: “By 2015 we were pretty busy serving Poland and Italy daily, but since 2017 there hasn’t been any intermodal freight through the Tunnel of any consequence.
“I agree with the original concept, but what we’ve seen in the intervening years is that only two of the freight operating companies in this country have got themselves a licence to operate through the Tunnel.
“Also, of the two companies involved, neither DB nor GB Railfreight appear to want to take any risk or to aggregate anything,
Running into the UK is easy and is proven, and there is sufficient capacity in the Tunnel. But then what do you do? There isn’t sufficient volume of British manufactured goods that go in containers to specific destinations, so we need to focus on UK exports plc.
David Cross, Managing Partner, DC Consult
and they do not want to retail freight trains. They will only take full trainloads - whether that’s coal or containers.
“I agree that aggregation is the way forward. But if only two freight operators are doing it, and both are against doing any retail, then we have a big problem.
“That’s a very sad thing as domestic aggregation (to Scotland) is clearly working very well. But through the Tunnel there is no appetite from UK or continental operators to consolidate or aggregate traffic at a time when there are dozens of reasons that it should be a good sell.”
Despite no longer directly working on Channel Tunnel operations, both Worth and Cross are still very much involved in the rail freight market.
Worth provides strategic advice to a range of clients and chairs the Chartered Institute of Logistics and Transport Rail Freight Forum.
Meanwhile, Cross is managing partner at DC Consult and was until recently commercial manager at Iport Rail, which opened near Doncaster as one of the UK’s newest inland rail terminals in 2018.
Before leaving DB in 2017, he also played a pivotal role in launching the first ever UK-China rail freight service, which ran for more than 7,500 miles between London Gateway, Barking and Zhejiang Province.
Worth and Cross are joined in a round table discussion by Hull Trains founder Mike Jones, who previously served as National Marketing Manager for BR’s Speedlink wagonload freight service until 1982, and then as National Business Manager for various products in BR’s Railfreight sector until 1990.
Jones guides the conversation to the two million tonnes of annual freight the industry inherited from the defunct train ferry business.
Worth replies: “There’s the daily Danone Waters train which has continued unabated, but we’ve lost significant steel tonnage in recent months from the Scunthorpe-Hayange movement. That can’t be helped, though, and is entirely down to politics following the division of British Steel’s assets as part of its sale to the Chinese.
“There’s also been a bit of a revival in strip steel from South Wales to Belgium, and there’s a daily train of aluminium coil to Daventry and Widnes, which returns to Germany with aluminium blocks produced from recycled cans. So, if you put together what we do on trainload, then it just about equates to what we used to do on the train ferry.
“Some of the conventional wagon fleet is showing signs of age but there ought to be an investment case for a couple of hundred wagons for these commodities, which are well suited to conventional wagons due to their weight.”
Away from conventional wagon flows in steel, aluminium and water, another important part of trainload traffic through the Channel Tunnel was always anticipated to be from the automotive sector.
However, business from that area seems to have been equally disappointing, despite a strong car building presence having built up in this country.
Worth says: “At the start we had two trains a day - one of Rovers from Italy and another coming in from France to bring finished cars to Corby. All of that has gone, and apart from one or two trials for Honda and Nissan it has been a huge disappointment over the last two decades, particularly as RfD - and thus the taxpayer - built a fleet of exceptionally good and fully covered car carriers.
“Moving cars is all about minimal handling to avoid the risk of damage, so if you can take a car from the factory all the way to a distribution point in a destination country, in a covered wagon, then there should be nothing better in terms of product quality.
“There are still large volumes of cars coming in and out of the UK from Europe, so that advantage has not been properly marketed, in my view.”
Cross agrees: “Cars are still successful domestically. But a bit like the water wagons, it needs investment. Cars are getting bigger and bigger, and it’s the width that matters because getting cars into wagons and then getting the driver out is becoming more and more challenging.
“That could be a bit of a problem on UK gauge, where cars might become too big for the wagons, but doesn’t really apply to the Channel Tunnel. In fact, DB built an enormous yard at Barking after 2012 because it has access to HS1. That means it can be accessed by European car carriers that are up to three vehicles high.
“That gives you an opportunity to either get cars down to Barking to transfer them onto HS1, or to bring them in so that half of the cars can be driven off to dealers in London and the South East while the rest would go onto British standard wagons to the Midlands and the North.
“Unfortunately, it was never really able to work on cost grounds. And despite the potential, nobody seems to be that keen.”
One of the major hurdles to increasing international automotive rail freight is the questionable decision by government in the 1980s and 1990s to allow new car plants to be built without being rail-connected.
Toyota’s Burnaston factory near Derby is one example, as is Nissan’s Sunderland plant - from where thousands of cars are moved by road to the Port of Tyne for export.
There’s also great uncertainty over the future of the automotive sector, as the Government plans to prohibit the sale of all new-build petrol and diesel cars from 2030.
“The current routes are all based on North
HS1 and its ability to handle the entire continental fleet is really key to this. If you can get a train up to Barking, then you can either distribute by road or do a rail-to-rail transfer onto UK domestic wagons.
Julian Worth, Chairman, Chartered Institute of Logistics and Transport Rail Freight Forum
Sea/cross-Channel shipping, which has managed to see off rail and we’ve never been able to get back in,” adds Worth.
“The whole market is in a state of flux anyway. It’s unclear who is going to build what and where, so it’s probably not the time for anyone to make a strategic move in automotive. But when the market and production locations become clearer, it is important that railways can mount a much stronger offering to the automotive sector.”
Moving on to possible solutions to boost rail’s market share, it’s not all doom and gloom from Cross and Worth. They believe that a successful formula can be found for aggregation to attract more of the intermodal market away from trucks and lorries.
Transfesa is a name that crops up once again, following the Spanish company’s successful introduction of express services to the UK. Since last October, it has partnered with Tesco to bring up to 15 loads a week of refrigerated containers from Almussafes in Valencia to Barking rail terminal.
Worth says: “Part of the answer has to be firms like Transfesa, which is part-owned by DB but operates as an independent logistics company.
“The reason it works for them is that they have a baseload customer in Ford and then move lots of other things like fresh produce. I think there is scope to develop that on other axes - and with other retailers - so the first people I would talk to would be Transfesa and then the guys who ran Unilog, to download their views.”
Cross believes that there could also be a market for running more of the 1.13 million containers carried by train between China and continental Europe through the Tunnel.
Approximately 35-40 trains a week travel between China and the vast Duisburg inland terminal in western Germany, and Cross says the problem is not finding interested parties in the UK to import the containers, but in securing sufficient backload for when they return.
He explains: “Running into the UK is easy and is proven, and there is sufficient capacity in the Tunnel. But then what do you do? There isn’t sufficient volume of British manufactured goods that go in containers to specific destinations, so we need to focus on UK exports plc, whoever they are.
“Bringing a train to the UK is exactly what people want because it’s low carbon, all the documentation is organised, there are no queues, it’s ten days faster from China than by sea and you have one driver pulling 40 containers. But they want backload and this is where the need for an aggregator is so obvious.”
Cross says that part of the answer to that will be through more aggressive pricing, to make outbound flows more attractive to customers that currently use road.
The collapse of Eurostar traffic should also provide an added benefit, by making
HS1 Ltd more willing to find daytime paths for freight. This would reduce transit and turnaround times, which will in turn increase the utilisation of wagons by achieving more round trips.
However, to sustain any new freight paths, a loop near Wennington on the Essex Marches will be needed once Eurostar services begin returning to normal.
According to Cross and Worth, this should form part of a wider financial commitment from government to fund other much-needed improvements, such as greater gauge clearance on the conventional network and providing greater capacity to transfer containers between UK and continental gauge wagons at locations such as Barking.
Worth concludes: “HS1 and its ability to handle the entire continental fleet is really key to this. If you can get a train up to Barking, then you can either distribute by road within the South East or do a rail-to-rail transfer onto UK domestic wagons.
“The onward movement from Barking is relatively straightforward. We’ve had gauge clearance across North London and up the WCML and ECML for a few years and the GWML has just been cleared to W10 for trains to Wentloog terminal near Cardiff. We know we can do it and there’s a large piece of ground at Barking where you could probably load and unload six 600-metre trains a day.
“Until the second migrant crisis stopped operations for an extended period, Barking was used for a very successful daily service for JG Russell from Dourges near Lille. On short distance shuttles like this a set of wagons can make a round trip each day, which brings costs down to a competitive level. The same could be done from Muizen in Belgium, and potentially from Duisburg, to create a link with Germany and a connection with services from China.
“These terminals have a range of transEuropean services that could feed into the shuttles, as an alternative to connecting with freight ferries across the North Sea - in reality, there’s more than enough business for both routes into the UK.
“But building Wennington will be crucial in the longer term, and the cost of lifts at Barking is something government could also assist with. I think it would be perfectly reasonable to defray the cost of those lifts by supporting the levelling-up agenda, so that the whole of the UK can benefit from freight on HS1.”