Is the British rail freight market becoming more diversified?

Dr Allan WoodburnTransport Studies Department

University of Westminster, London

Study aim

• To investigate whether the rail freight market in Britain has been diversifying away from the traditional bulk commodity flows

Relevance of study

• Long-term decline in rail freight market share from 1950s to 1990s

• Shift from wagonload to trainload operation• Simultaneous concentration on bulk commodities

(e.g. coal, aggregates, steel)• Led to limited role for and narrow focus of rail

freight market – not much activity “downstream” in the supply chain

• General desire for rail to play greater role – sustainability reasons

A (very) simplified supply chain

Raw materials Processing Distribution

to customer

Significant rail use Limited rail use

Declining importance in UK Increasing importance in UK

Wagonload rail freight – mix of goods

Trainload rail freight - aggregates

Composition of British rail freight market (1998-99 – 2010-11; freight moved)

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Coal Metals ConstructionOil & petroleum International Domestic intermodalOther

Source: ORR (2011)

Key trends in rail freight volumes

• Bulk commodities share increased from 59% in 1998-99 to 63% in 2010-11, but mixed pattern:– Large increase in ‘coal’ from 1998-99 to 2006-07,

with general decline since– Decline in ‘international’, particularly from 2000-01

to 2001-02, with fairly minor fluctuations thereafter– Year-on-year increase in ‘domestic intermodal’ since

2001-02, rising from 18 per cent of the market to 30 per cent

– Considerable decline in ‘other’ since 2003-04

Bulk share increased - no diversification?

• So, little structural change in the rail freight market since the 1990s?

• Some hints of change, particularly with growth in intermodal:– Container traffic to/from deep-sea ports– Containers and swapbodies through Channel Tunnel– Containers and swapbodies on Anglo-Scottish corridor

• Limited evidence of diversification other than intermodal

Intermodal examples

Current rail freight use in the supply chain

Raw materials Processing Distribution

to customer

Significant use Limited use

Declining importance in UK Increasing importance in UK

Intermodal rail freight

Limited use

Traditional rail freight

Significant use

Conclusions

• Key bulk sectors still dominate rail freight market

• Other flows in traditional wagons have been in (irreversible?) decline

• Intermodal volumes have grown by 60% since 1998-99

• While not hugely significant in volume terms, evidence of some diversification