Freight Village People

Despite the success of DIRFT at Daventry, Britain lacks a continental-style network of major rail freight hubs. Now, a new industry group has been formed to promote development of rail-linked 'freight villages'.

A little less consultation, a lot more action

DIRFT is a thriving distribution hub, with an intermodal terminal and adjacent warehousing, some with integral rail links. Plans exist to expand DIRFT with more warehousing, capable of being served either by direct rail links or by the intermodal terminal itself. But what about the rest of the UK?

Developers are keen to create more of these sites for their customers - retailers, manufacturers and distributors - who are similarly interested in rail, but are often frustrated by the lack of suitable sites. But if finding large sites with good road and rail links was enough of a challenge, developers also have to contend with the planning process, which has sometimes gone completely against Government support for rail freight.

Mike Hughes, Chairman of RIIG and director of developers Helios Properties, explains the rationale behind RIIG:

"The developers leading RIIG - BAA Lynton, Burford Group, Helios Properties, Prologis Developments and Shell - have decided to join forces to raise the profile of major rail freight interchanges, and seek a more constructive debate with the various arms of Government. RIIG is seeking to commit major investment into the rail industry, and help boost rail freight traffic at a time when growth has slowed, but not if that investment is wasted on abortive planning inquires and endless debate."

Life in the Village

Like parts of the rail freight industry, the wider distribution sector increasingly relies on a "hub and spoke" network, where freight from a range of smaller, dispersed sites is consolidated at regional or national "hubs", which are then linked by "trunk" hauls by road or rail, with the process reversed at the other end. The growth of the global economy has pushed these regional hubs further apart, with each then serving a larger catchment area. Until relatively recently, the average length of haul for goods vehicles in the UK continued to increase in response to this trend, but is now showing signs of tailing off, possibly because of the growing impact of road congestion - creating an opportunity for rail.

But, in order for rail to be viable in this primarily non-bulk, "general cargo" market, each train must carry a sufficiently large volume of freight and/or transport it over a sufficiently long distance. An individual retailer, manufacturer or distributor might be unable to generate such volumes. Freight villages bring various freight-generating businesses together on one site, who together can create more opportunities for viable rail freight services, to other hubs, ports etc. Furthermore, placing the customers directly between road and rail networks reduces the need to "double handle" freight en route, further improving rail's viability.

DIRFT and equivalent sites on the continent share similar characteristics:

• Sited in strategic locations relative to main centres of demand, with good links to road and rail networks, and in some cases to ports and airports as welL

• Large sites, up to 300 hectares (740 acres) in size

• Rail facilities for interchange between rail and other modes of transport, including intermodal terminals and rail-linked warehousing

• Home to up to 100 companies, engaged in manufacturing, storage and distribution of freight

• Freight is typically moved long-distance by sea, air or rail, with local distribution by road

• Sites act as regional economic "growth poles", providing focal points for regional economies, inward investment and employment.

These developments can each create large opportunities for rail freight, but as Alan Curtis, Managing Director of Prologis Developments, points out, they only form part of the jigsaw:

"As with road-based distribution, customers will need access to a range of interchanges, varying in size from local railheads through to major freight villages. There is already a good provision of smaller facilities around the country, and these will still play a vital role in maintaining rail freight traffic at current levels. However, the SRA has stated that, in order to achieve major onward growth in rail freight, particularly in the non-bulk market, a small number of large freight villages will also be required. In any case, there are only a limited number of suitable sites in the UK for such large facilities to be built."

Catching up with the Continent

Progress across mainland Europe with freight village development makes the contrast with the UK all the more apparent, not least for the volume of rail freight handled. Two such sites are shown in the panels, at opposite ends of the scale in terms of size, but otherwise sharing common features.

CASE STUDY: QUADRANTE EUROPA, VERONA, ITALY

Part of a national network of regional freight villages in Italy (Interporti), this 250 hectare (617 acre) site lies at the crossroads of the Brenner (north-south) and Serenissima (east-west) motorway and corresponding rail links. It handles international freight coming from or going to northern central Europe through the Brenner Pass, and freight traffic to and from Spain, France and Eastern Europe. More than 100 companies are based on site, with 1,800 employees. Facilities include:

• Intermodal terminal with 12 x 650 metre sidings worked by 4 overhead rail-mounted gantry cranes, and a secondary terminal with 17 sidings, worked by 8 reachstackers, Services include 10 trains per day to and from Germany, Benelux, Denmark and Sweden through the Brenner Pass, 2 trains per day to and from Southern Italy, and 2 trains per day to and from Eastern Europe

• Marshalling yard with 8 x 600 metre sidings, used to hold conventional wagons between the main line and the 7 kilometres of internal trackwork

• Warehousing, around 100,000 m2 of rail-linked warehousing on site, offering a range of value-added services

• 22 hectares of rail-connected land for handling automotive and other traffic

Together, the facilities on site handle 7m tonnes by road and 4m tonnes by rail per annum, the latter moved in 200,000 intermodal wagons and 30,000 conventional wagons (data courtesy Quadrante Europa).

		CASE STUDY: INTERPORTO BOLOGNA This 200 hectare (500 acre) site includes 60 hectares (150 acres) of Italian Railways facilities, with direct connections to the national rail and motorway networks. The site is located at a focal point for collection and distribution throughout the Italian peninsula and abroad. The development is placed at the heart of the main traffic routes that cross Italy from north to south, along which 75% of all goods are carried by rail and road. Some 70 national and international transport companies are located on site. The site handles over 3 million tonnes of freight, of which around half is moved by rail. A further expansion area of 227 hectares (560 acres) is on schedule for development (photo courtesy Interporto Bologna).
		CASE STUDY: CARGO CENTER GRAZ, AUSTRIA At the other end of the scale in terms of size, this newly-built 50 hectare (120 acre) site has the same type of facilities as the Italian hubs, namely rail-linked warehousing, an intermodal terminal and direct links to adjacent road and rail networks. The intermodal terminal has 8 sidings of up to 780m length, operated by 2 gantry cranes and 1 mobile crane. Direct rail services have been established to a number of major European ports (photo courtesy Cargo Center Graz).

In the UK, the start of Channel Tunnel construction, and the promise of faster direct rail links to mainland Europe, sparked interest from developers and their customers in creating a UK network of freight villages. British Rail had identified, as part of its planning for Channel Tunnel services, a network of "Euroterminals" around the country, although these were almost entirely dedicated to intermodal services rather than conventional wagons and warehousing.

With the exception of DIRFT, the Euroterminals have, like Channel Tunnel freight services themselves, enjoyed mixed fortunes, and in most cases the lack of adjacent warehousing (rail-linked or otherwise) and the absence of a large freight community on site has hindered the potential for rail freight growth. RIIG believes that a new breed of freight village is needed, drawing on proven DIRFT and continental experience, which can provide substantial growth opportunities for rail freight.

Delivering the promise for rail freight

It's worth reiterating how far successive Governments have gone in recent years to support growth in rail freight, and the means to achieve that growth - policy statements have included:

"Rail freight demand forecasts show that non-bulk traffic will grow significantly…the customers for which are rarely directly connected to the railway. To support development of rail in the general freight market, a small number of large new interchanges will be required with both intermodal capacity and rail connected warehousing." (SRA)

"Concentration of traffic is important because of the high fixed costs of rail transport. This could be encouraged by a better integration of freight transport into land-use planning. For instance more freight villages could be developed and heavy users of transport concentrated near terminals with adequate facilities for changing cargoes between modes…a proper network of terminals is necessary to ensure the interface between modes."(EC)

"The performance of these 'hubs' in our distribution networks is vital both to promoting greater use of inland intermodal freight, with rail providing the 'trunk haul' elements, and in maintaining efficient trading links with our immediate neighbours in Europe and across the world."(DfT)

"Individually, ports, airports and intermodal terminals represent major investments and have substantial environmental and wider implications; implications which can make it particularly difficult to find acceptable new sites for development and which necessitate careful, long-term planning. This must develop from a local and regional consensus, within a national framework."(DfT)

"The Government has a crucial role to play in achieving a fair balance between conflicting interests. An unduly restrictive policy could result in unnecessary traffic generation elsewhere. It could also lead to development and jobs migrating to neighbouring countries such as France, Belgium or the Netherlands, with more long-distance haulage by road and increased costs and journey times for our exporters and importers."(DfT)

"Local authorities in preparing development plans will be expected to consider, and where appropriate protect, opportunities for rail connections to existing manufacturing, distribution and warehousing sites adjacent or close to the rail network and allocate sites for suitable new developments which can be served by rail."(DfT)

"The SRA in turn has identified the following priorities and aims in order to deliver the 10 Year Plan goals, including for freight, facilitating a significant increase in the number of interchanges, to connect more customers directly to the rail network and facilitate the transfer of goods from road to rail."(SRA)

Fine words indeed - but where are we against these pronouncements? Rail freight growth in Britain has tailed off over the last two years, although developers, driven by their own customer requirements, have continued to develop major freight village proposals. The development at DIRFT, whilst falling within a greenfield site, succeeded in obtaining permission in part through the strength of its location and design; it also drew heavily on the "green" credentials of the predicted major increase in rail freight (and consequent reduction on road freight) which such sites and the Channel Tunnel would bring.More recently, gaining permission to develop such sites has proven increasingly difficult, not least due to the poor performance of Channel Tunnel services, part of a wider compass of problems on the railways leading to more modest predictions for rail freight growth in coming years. In short, the planning system has become more cynical about the benefits that rail-linked sites can deliver, but without creating these major opportunities for using rail freight, growth will never happen - a self-fulfilling prophecy.

LIFE - but not as we know it New rail-linked manufacturing and distribution facilities have been constructed at Colnbook (the proposed site for the aborted LIFE project), but only to serve the Heathrow Terminal 5 construction works nearby. A typically British irony, all of this will have to be removed in 5 years time when T5 is finished!" (photo courtesy Containerlift)

The most high-profile example of this of late has been the proposed London International Freight Exchange (LIFE) at Colnbrook in West London. The site, whilst being surrounded by motorways, despoiled land and industrial activity, and the small matter of Heathrow Airport nearby, forms part of the Green Belt. Despite the support of the above strategic policies, the Inspector at the planning inquiry into the proposals was not convinced that the national and regional benefits of rail freight outweighed the local loss of Green Belt land. Contrast this view with that given to the inquiry into the adjacent development of Heathrow Terminal 5, albeit on a far greater scale. T5 got approved, while LIFE didn't, leaving the developers with abortive costs in the order of £8-£10m - monies that could otherwise have been invested in the site itself. Indeed, Stephen Joseph of the environmental transport group Transport 2000 commented:

"This rejection is bad news for rail freight and hypocritical from a Government that only last year approved Heathrow's fifth terminal right next door. If schemes like this are to be rejected, we will never see the renaissance of rail freight and reduced road congestion that the Government says it wants".

Other major schemes now in the queue, such as the 1,000 acre Alconbury Airfield (BAA / Prologis) or the London Gateway port / distribution park complex (P&O / Shell) are now anxiously awaiting their verdicts. Will the planners again come down in favour of local issues, ignoring the wider opportunities for rail freight growth; or, even more bizarrely, object to the proposals due to lack of rail network capacity to accommodate that growth?

The role of RIIG

In the current climate, it is clear that individual developers and their schemes are not getting the ear of Government, which is leading to considerable time and money being spent by each developer on proving the context for an interchange proposal, rather than being invested in rail freight infrastructure. Hence the decision to form RIIG, with a single focus and a clear mission, namely:

• To promote the investment, employment and environmental benefits of rail freight interchanges, delivering the success of such developments across mainland Europe

• To seek a more constructive approach by Government planning policy towards rail freight interchanges, to maximise the benefits to UK plc

Keith Chappell, Development Director of BAA Lynton, reiterates the reasons for forming RIIG:

"RIIG has been formed because our customers want better access to the rail network. The Government claims to be supportive of rail freight growth and interchange development and we have the skills and funds available to make the necessary investment. We appreciate that creating such freight villages is only the start, and that the rail industry will then have to deliver a similar quality of service and network capacity if the opportunities are to be realised. But without such interchanges, the scale of opportunity will be limited, as evident in the lack of growth in rail freight in recent years."

"RIIG wants to promote a constructive debate into the issues surrounding rail freight interchange developments," adds Mike Hughes, "and to ultimately gain reassurance that Government is serious in its stated policy ambitions for rail freight. From our discussions with various Government departments of late, we are hopeful that a way forward can be found. We do not want preferential treatment, but we would like to achieve a better balance between national, regional and local planning policy as applied to these major schemes. If not, then the investment, development and jobs will indeed 'migrate to neighbouring countries, with more long-distance haulage by road and increased costs and journey times for our exporters and importers'."

Thus far, the signs are encouraging - at a recent conference on developing rail freight terminals, Jeff Miles, Head of Freight Market Development at the SRA, announced that the SRA plans to engage with other Government planning and transport officials, to improve the planning process for major railfreight interchanges.

Mr Miles noted that industry was proposing to create at least 40 railfreight interchanges around the country, equivalent to £2.5 billion of investment into the rail network (around ¼ of the annual cost of running the whole GB rail network). He accepted that industry confidence had been shaken by rejection of the LIFE scheme. The SRA had reviewed the reasons for the refusal, he said, and were now seeking to engage with colleagues from Office of the Deputy Prime Minister (ODPM) and Department for Transport (DfT) to review the planning framework for such developments.

Mr Miles said: "The SRA's Executive Committee has authorised development and publication of a policy statement incorporating guidance for developers and the planning process on the need for rail freight interchanges. This will mitigate the effects of the LIFE decision and restore confidence to the market, ensure that SRA policies and strategies are given proper weight in the planning process, and provide a robust foundation for SRA engagement with the ODPM & DfT."

RIIG will be watching these developments with interest. Mike Hughes said:

"We welcome the SRA's announcement, but this commitment must now be converted into real support for railfreight interchanges on the ground - over £2 billion of investment in rail, the removal of millions of lorry trips from our crowded roads, and regeneration of the regions, now depends more than ever on Government honouring its commitments to sustainable distribution."

As a group, RIIG is realistic about the role of rail freight. Road haulage will remain the predominant means of transport for freight, and demanding that all new distribution parks should be rail-connected (as some have suggested) would be a well-meaning but pointless objective. Yet road haulage is facing increasingly serious challenges with road congestion and pricing, shorter permitted working hours for drivers and a recruitment crisis. For a small number of major rail freight interchanges, and the businesses located on and around them, rail could be as important as road for movement of freight, particularly in the long-distance market.

Investors are standing by with the funds to construct these interchanges, and it would be typically British if yet another opportunity to regenerate the railways was lost due to our unique approach to planning. The challenge to the developers and the rail industry is to explain the opportunities to the planning system, giving rail freight and government policy the recognition it deserves, and ensure that the farce of the London International Freight Exchange is not repeated - the real meaning of LIFE!

Thanks to RIIG, Cargo Center Graz, Assointerporti and Tibbett & Britten for their assistance with this article.

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