Coal’s decline the primary cause of freight’s troubles

Looking at the figures for the fourth quarter of 2015-16 (January-March, Q4 2015-16), the Office of Rail and Road said the total amount of freight moved reached 4.2 billion net tonne kilometres (ntkm) - 1.6 billion ntkm less than for Q4 2014-15 (down 27.4%).

The biggest reason for this was coal, which fell 1.4 billion ntkm. The amount of coal moved (0.46 billion ntkm) was the lowest in any quarter since the start of the time series in 1998-99.

In Q4, Domestic Intermodal accounted for the largest proportion of total freight moved (1.6 billion ntkm, 37.0%), followed by Construction (0.9 billion ntkm, 22.5%). Overall, five of the seven commodities recorded a decrease in Q4 201516 compared with Q4 2014-15 (see panel). Only Other (this category includes biomass, which has increased as power station generators are converted from coal to biomass) and Oil and Petroleum recorded an increase.

ORR said that possible changes in Q4 included the closure of Longannet power station in Scotland (reducing the amount of coal that can be moved by rail); the tightened security at Calais caused by the migrant crisis; and the fall in metal prices combined with the drop in global demand for steel, allied with competition from imported steel and plant closures. ORR also states that imported metal can be ‘interhauled’ (movement by lorry), so less freight is needed to move between plants. Construction has also slowed down, due to a reduction in orders.

ORR states that the amount of freight lifted in Q4 2015-16 was down 35.8% from that in Q4 2014-15. The amount of coal lifted was 3.5 million tonnes in Q4 2015-16, a huge drop of 73.2% compared with the corresponding period in 2014-15. And the total freight train kilometres dropped 2.3 million (21.7%) compared with Q4 2014-15.

Five of the seven operators recorded a reduction in freight train kilometres, with DB Schenker (now DB Cargo) falling by more than a quarter to 3.7 million, while Freightliner Heavy Haul more than halved from 1.3 million in Q4 2014-15 to 0.6 million in Q4 201516. DRS dropped 30.2%, GBRf was down 11.0%, and Freightliner Intermodal fell by 2.0%.

Colas Freight rose 10.3% while Devon and Cornwall Railways rose 2.5%, although ORR pointed out that these two operators account for only 21,000 net tonne kilometres.

ORR highlighted that the closure of Lamington Viaduct on the West Coast Main Line will have had an impact, as will a landslip on the Cumbrian Coast Line. The introduction of the carbon tax will also have affected FLHH’s coal movements and distance.