Transport is a major concern for most people with a hand in the fresh produce industry, and traditionally road haulage has taken the lion’s share of the job.
However, this method of transport is suffering from a widely publicised set of drawbacks, which is prompting people to look for alternative modes of transport.
One of the more contentious and timely issues is the environmental implication of excessive road use. A recent Defra report showed that in 2004, lorries delivering to UK destinations travelled 5.6 billion ‘food miles’, prompting a Liberal Democrat spokesman to work out that supermarket lorries travel the equivalent of almost four return trips to the moon every day.
In an age where retailers are fighting tooth and nail to show customers their caring sides, gas guzzling, emission-exuding trucks clogging up the countryside is not an image that sits comfortably with many chains. This is aptly illustrated by Sainsbury’s gesture to rely less on lorry usage - cutting down by five per cent - around 29,000 trips a year taken off the road.
There is of course also the rising cost of fuel to contend with. While there is much good research being done to find alternatives, such as vehicles powered by hydrogen, bio-fuel and dual fuel systems, making these a realistic alternative available on a large commercial scale seems some way off. In the meantime, fuel is having a serious effect on road users, pushing costs up by around 10 per cent with no sign of them coming down again.
Congestion too is a constant headache. Lorries stuck in traffic jams means late consignments - a major problem for those relying on tight delivery schedules.
Moreover, the impact of foreign lorries on UK roads is a bone of contention in this country as many feel their presence on the UK’s road transport network is not mitigated with any kind of compensation. Colin Beaumont, director general at British International Freight Association (BIFA), explains: “The impact is that [foreign lorries] are taking business from UK companies and are not paying anything for using UK roads,” he says.
Ian Wilson of Geo-Logistics agrees: “Foreign trucks are entering the UK and not contributing to any revenue for road use or fuel taxes. Furthermore, there is official evidence that foreign trucks are significantly more likely to have accidents, work illegally in terms of time, fatigue and compliance, and the vehicles are not as well maintained and serviced as UK-compliant vehicles; the UK industry is highly regulated and controlled.”
But while the government may be laying down the rules liberally, it is not always seen as the supportive power it perhaps should be. Road haulage is one of the highest payers and tax collectors of any working industry, with at least 10 tax implications: corporation tax, income tax, national insurance, waste tax, road fund license, car tax, business rate tax, insurance premium tax, and VAT.
Add to this muddle problems with driver shortages and the obstacles thrown up by the Working Time Directive, and it’s small wonder that people are striving for a solution to bypass some of these drawbacks.
On the face of it, transferring some of the transport burden to rail is an ideal solution. It is fast - sometimes up to 125mph - and works to a strict timetable, enabling those sending and receiving consignments to be well-organised. This works very well for contract orders, but the flexibility required by a large proportion of fresh produce transit is not catered for, making road more adaptable in that sense.
But what rail lacks in flexibility, it can gain in reliability, says Andrew Traill of the Freight Transport Association (FTA). “Operators can accommodate 90-95 per cent reliability, although it is not certain whether they are all measuring the same things or indeed where their start and end points for such performance measurements are,” he concedes. “For example, whether they are from terminal to terminal or door to door.”
Nevertheless, the consensus is that rail pips road to the post in the reliability stakes - for the unpredictable congestion problem, if nothing else. Although, when things go wrong, they go seriously wrong with rail. “This is because you may well be looking at a whole train load being delayed, rather than simply a truck load,” Traill says. However, when disaster strikes, many have contingency plans in place. “Some of the rail-freight operators have sizeable road freight fleets at their disposal - often supporting the door-to-door service provided. It is possible for these assets to be used in the event of a service failure.”
The amount that can be moved by rail in a single journey is on the one hand a plus - but on the other, quite difficult for freighting fresh produce. Generally, a full train is 25x40 containers, reefers or boxes, and freighting in volume helps keep rail more cost-efficient than road. Nevertheless, resources can be a problem. “Rail generally reduces the cost,” says Michael Orpin of Geo-Logistics. “Containers are collected from the port or depot and taken to the nearest commercial siding before being loaded on to suitable wagons.
However, the considerations for reefers are correct size, with facilities to enable the refrigeration to run. In our experience there are only so many available per trip.”
This ‘shortage’ is something Traill too has experienced. “Rail, even on a W10 gauge, which means it can carry a high cube - a 9’6”container - may not be able to accommodate the 2.55 or 2.6 metre-wide containers that make up many of the temperature-controlled or refrigerated containers,” he says. “And wagons to accommodate reefers are in short supply according to our sources.”
There is also a problem with the fact that the sheer volume being transported per journey is not actually always what is required. “To achieve full volumes by rail, aggregators and retailers will need to be open-minded about sharing rail services in the same way as road vehicles share traffic jams on motorways,” says Neil Stevens from the Rail Freight Group (RFG). A 25-box train may end up being part Tesco, part Asda and part Marks and Spencer in order to achieve a 25 box loading on a timetabled departure from point A to point B.”
There has been a marked move by retailers towards rail freight. While fresh produce makes up little of this, it still represents an attitude shift from supermarkets, and possibly an indication of developments in fresh produce distribution to come. Stevens points out M&S’s recent move towards rail freight, with 30 per cent of its global intake and 60 per cent of its intake from continental Europe, of beers wines and spirits being moved this way - a big change from 2000 when it didn’t use rail at all.
Tesco too has recently become the first retailer in the UK to move a significant amount of its volumes - albeit non-food - to rail from road, with the introduction of purpose-built ‘green trains’.
With little room for manoeuvre in the price stakes, it is not surprising that many are looking to attract consumers with a greener image, and while the jury is still technically out on whether trains are actually kinder to the environment than trucks, it is widely regarded as an advantage of rail. According to RFG, per tonne carried, rail produces around 10 per cent of the CO2 produced by road and one journey transferred from road to rail between Thrapston and Edinburgh saves 12kg CO2 or 7kg of solid carbon.
Many think rail offers retailers a slightly cheaper alternative, with fewer drivers needed, making it more economical to run and so on.
However, retailers will have to back up their commitment to rail freight with some investment to add credibility to this type of transport. “All retailers are looking to reduce supply chain costs and the truck and train are in the middle of this ‘war zone,’” says Wilson. “Rail has to form part of any strategy, but the RDC network established by the retailers is not rail-friendly. There are some token efforts taking place but the rail network is already at high levels of capacity and there are no significant track additions to facilitate additional capacity on the horizon. New freight depots are opening, but no real new track is being laid.”
For all these problems, rail use is gaining momentum. Its merits have seen it achieve steady growth in recent years - around 50 per cent since privatisation of the railways in the early-mid 1990s.
A combined study by the FTA and the RFG looked to forecast demand up to 2014, and found some promising results: between 2005-2014 the report suggests a 20-per cent growth in tonnes lifted; 2014-2030 three per cent growth in tonnes lifted; and between 2005-2030, 23.5 per cent growth in tonnes lifted.
“A number of supermarkets have already begun to incorporate rail freight into parts of their logistics operations - they have large volumes moving regularly between central distribution centres, which lends itself to rail freight - provided the service remains reliable, and costs remain competitive,” says Traill, emphasising that the largest growth has come from growth in imports in containers. “We forecast that in 2014, the tonnage carried in maritime containers moving by rail will increase from 13 million tonnes in 2005, to 18.7mt, and then to 30.5mt by 2030 - that’s in the region of two million containers.”
“This is largely being controlled by the ocean carriers and large logistics companies that see rail distribution as a benefit to centralised distribution strategies. The container ports also recognise that if they and the connecting road infrastructure are not to become blocked then distribution of the containers by rail is of growing importance.”
While it is still uncertain how much of a part fresh produce will play in this growth, industry experts are confident it does have potential for the industry, “Rail freight in general is increasing, fresh produce movement is not,” Stevens, says. “However, there is an increasing awareness of what rail can do and is doing, and an increasing number of industry players are asking questions about the art of the possible.”
Traill says that the big opportunity for fresh produce moving by rail could come in the form of through-channel-tunnel rail-freight services that can continue on the Channel Tunnel Rail Link (CTRL). However, there are setbacks. While the CTRL is opening for freight in the autumn of 2007, the owners - Union Rail - are reported to have been less than enthusiastic to allow freight trains onto the otherwise dedicated high-speed passenger route from the Tunnel to London, for fear of increasing the costs of track maintenance. They could decide that, despite by law having to allow access to the line for freight services, they will set the access charges so high as to make it uneconomical to operate freight services. Also, even if the access charges to the CTRL are set at reasonable levels, there continues to be uncertainty over the future of Eurotunnel itself, and whether it will even be open for through-freight-train business in 2007.
“There is also the question of reliability on the French rail network,” Traill says. “France has earned a reputation for rail-freight services being hindered by the baggage of union working restrictions and practices, industrial action, and government rail policy heavily influenced by the unions that has resulted in unreliability.” He says that there appears to be a silver lining in that the French government and the state-owned railway company, SNCF, are getting to grips with the issues and allowing more competition. The pressure from the unions is receding in recognition of the fact that rail freight in France will die if they do not change their approach.
“Certainly the European Commission is devoting much resource and effort to the liberalisation of rail freight across Europe, and to improving infrastructure on the key strategic rail-freight corridors in Europe; all of which suggests more freight on rail in the future, greater efficiency, better service, and perhaps more fresh produce using a fast and seamless rail freight network that includes the CTRL between centres in Europe and London,” he surmises.
Stevens shares his vision: “It will never rival road as the principle mode, but it could play a much bigger role overall and provide a realistic additional option to retailers and shippers. Similar scope also exists to move produce from Europe to the UK through ports and through the tunnel.”
In the UK, there are also talks about a north-south high-speed line, but it remains to be seen whether this will be a freight or passenger line.
However, inevitably this all costs money, and while the country’s rail network is privatised, the need for an improved infrastructure to support the UK’s burgeoning economy needs to be addressed.
The government is looking to the private industry to fund most of the growth in rail where it is the major user of a route or section of track or the main beneficiary of any enhancement to the track, or where it is because of freight traffic that work on the track is necessary in the first place, Traill says.
“On the face of it, one can understand the sentiment, but it ignores the role the government has for ensuring essential transport infrastructure exists to support a growing economy,” he says. “Therefore, the FTA has been making the case that support with public money continues to be essential as part of a strategic economic policy into which transport policy and infrastructure investment strategies fit. The consequences for some businesses being required to pay for the maintenance and renewal of the lines they use would be huge: they may - if they had no other choice - close down; at best they may simply shift their freight to road, which simply exacerbates the congestion issues and costs of highway maintenance, and does nothing for attainment of any environmental objectives through shifting freight off roads onto rail.”
In response, the FTA advocates a strategic freight policy rather than a separate road, rail, sea, port or even air/airfreight policies. It argues that decisions regarding efficiency of transport are made simpler and more informed by looking at the bigger transport picture.
“Rail, road and sea freight all work together to enable business to function, to compete and grow,” Traill says. “If you focus on each individually you end up with a lot of mismatched policies.”
Whether or not rail can become a serious contender for fresh produce freight remains to be seen. What is apparent is the support amongst the industry. While it seems no one method of transport offers a golden-ticket solution, the benefits of rail over road - and vice versa - are being recognised and use of rail, it seems, will continue to grow.
No comments yet