Rail Freight
THE FREIGHT Transport Association (FTA) has raised concern about higher charges for freight operators during Control Period 6 (2019-24).
Responding to the Oice of Rail and Road’s Final Determination, published on 31 October, the FTA has welcomed the funding allocation but believes the regulator has missed an opportunity to boost use of the rail sector. The increase in charges recommended by the determination provides a two-year freeze in costs, followed by a ramping up of charges over the inal three years of CP6, generating an increase in the total variable charges of 10% for freight in real terms. FTA says it expects further increases in the subsequent Control Period unless there is a dramatic increase in the eiciency of Network Rail in the longer term. It highlights concern that the rise in charges could afect the cost efectiveness of rail and leave customers with little choice but to switch to road.
Elizabeth de Jong, Director of Policy at FTA, said: ‘The introduction of increased charges for the use of the network could act as a deterrent for businesses looking for alternatives to road freight. At this time of economic uncertainty and challenging trading conditions, an increase of this size should have been avoided.’
Ms de Jong also called for further eiciencies to be achieved, adding ‘Rail’s cost base must reduce sooner if it is to win market share from road and achieve growth. Frustratingly, ORR knows that further eiciencies are possible – while the 10% eiciency improvement over the ive-year period is positive, ORR also acknowledges that “there was some evidence that Network Rail could go further on eiciency” – and this is something our members would be keen to see actioned.’
