ROAD RAIL
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Truck operators had better start looking over their shoulders. After years of declining volumes, rail freight is winning new customers, thanks to improved efficiency, environmental pressure and worsening road congestion. One new customer alone is moving more than 5,500 truck movements a year from road to rail.
W'thin the past four months, Safeway, Sainsbury's and Superdrug have all switched their first UK cargoes from road to rail. Other leading retailers and manufacturers are known to be exploring the viability of railfreight .
Although the cost and time advantages of rail over road are by no means clear cut, these new customers signal a fundamental shift in logistics' thinking. The Freight Transport Association's latest quarterly survey of transport activity among 600 of its members shows that 89% of those using conventional rail freight and 73% of those using intermodal services plan to extend their use in the next three months.
Reliability
The survey suggests two reasons for this change: improving reliability of rail services and worsening congestion on the road.
But Len Rumble, Safeway's commercial business director for logistics, offers a third reason: "We do have an environmental conscience, and that does affect the way we run our business. There has to be a balance between that stance and the practical and economic activity that you are involved in."
At the end of June, Safeway began a weeklong trial with English Welsh & Scottish Railway (EWS) between Daventry and Mossend near Glasgow. The company plans to establish a more permanent role for rail in the near future although Rumble says some drawbacks were apparent during the trial. These included the distance between the company's bonded warehouse in Welwyn Garden City and the railhead, and the absence of facilities for handling chilled and frozen goods. "To be fair to them," he says, "there is significant investment going into rail at the moment—it is really very early days."
Since the beginning of last month, Sainsbury's has been using EWS to move goods from its primary consolidation centre in Colchester to its regional distribution centre (RDC) in East Kilbride which is due to go live later this autumn.
Development
The rail terminals are some distance away, at Ely and Mossend, but the ability to use 44tonners to move goods on the road sections of their journey is an important bonus, says Garry Marshall, business development manager for primary distribution. "Certainly in terms of time it is comparable with road," he says. Marshall is now talking to EWS about serving other areas of the UK by rail.
Among the major retailers Superdrug has arguably made the biggest commitment to rail so far, using it to serve the warehousing in Mossend which is handling the company's Christmas range of products.
Head of distribution Gary Grindlay says that lower rent, rates and labour costs in Scotland more than offset the savings in transport costs that would have been made with more central warehousing. But the rail journey between its RDC in Pontefract and Mossend takes almost twice as long as by road, and is no quicker between Mossend and Superdrug's other RDC in Croydon.
"The service we are getting from EWS is very good but it really will have to be a wee bit quicker than it is at the moment," says Grindlay. The big advantage of using rail is that it cuts down the number of empty trucks that would be returning from Scotland if the company was entirely dependent on road.
Superdrug's existing RDCs have a maximum throughput of 1.8 million cases a week and Mossend will be handling up to 400,000 cases a week in the run-up to the Christmas season. Mossend is likely to be followed by a third Superdrug RDC, with even greater use of rail.
With restricted delivery times at many of its 710 stores, Grindlay believes that rail will help avoid the problems of traffic congestion.
"It's costing us more and more sitting in traffic, and with all the environmental issues facing the industry it makes sense to support the railways now," he says.
The transfer of goods from the Pontefract RDC to the nearest rail terminal at Wakefield is handled by Cobra Railfreight, whose commercial director David Northcott says failure to abide by service agreements was the biggest drawback to rail before privatisation. "They are taking great steps forward now," says Northcott, "and are building on the biggest
words they can use—
which are 'customer con fidence'."
EWS, the biggest railfreight operator, in the UK, is investing £500m on more than 200 locomotives, 5,000 railway wagons and a new customer service centre. They will all come into operation next year.
Julian Worth, EWS general manager for business development, says deals with other retailers as well as food and drink manufacturers will be agreed shortly. He adds: "We are already carrying three times the amount of food, drink and forest products that we were when we were launched as a new company last October."
Railfreight Distribution (RID), which specialises in long-distance freight through the Channel Tunnel, has increased its intermodal business by 37% over the past year to 210,000 units. Freightliner, which deals mainly with deep-sea container traffic, has increased its volumes by 15% since privatisation in 1995. E by Guy Sheppard
NEW RAIL CUSTOMERS WITHIN THE UK
• DuPont Nylon. Using Freightliner to deliver 65,000 tonnes of nylon polymer a year from its manufacturing site at Wilton, Teeside, to its central trunking centre 150km away in Doncaster. This will cut 5,500 truck movement a year. • Superdrug. Has contracted EWS to run nearly 30 rail wagons a day between its RDCs in Pontefract and Croydon and warehousing provided by TDG Harris in Mossend. This will continue until Christmas, saving the equivalent of some 37 truck movements a day. • Safeway: Ran a week-long trial from the end of June with EWS to move 400 tonnes of wine and other ambient goods between Daventry and Mossend near Glasgow. This saved the equivalent of 17 trucks driving a total of 12,400 miles. EWS has been taking occasional loads for Safeway ever since.
CO-ORDINATION OF FREIGHT MOVEMENT
Last month's collision between an express and a freight train in Southall, which caused seven deaths, has raised questions about rail's capacity to cope with increased traffic.
All rail movements are coordinated by RaiItrack which owns, manages and maintains the rail infrastructure.
Last year freight accounted for £159m of Rai'track's revenue; a Fraction of the £2,119m raised from passenger traffic. A spokeswoman for Railtrack says a large proportion of freight is moved at night when passenger trains are not running. "Last year
freight traffic grew by 3%," she says, "the first increase for 17 or 18 years. We are looking to build on that growth and are looking at several initiatives to improve facilities."
This year the Government has allocated £30.5m of freight facility grants to subsidise track access and new handling equipment. Freight services are mainly provided through the licensed train operating companies, but customers can negotiate directly with RaiItrack if they want a regular "path" on the network.