Rail Freight Group

‘Tradition is the passing on of the flame, not the worship of the ashes’, or so the quote goes. In an industry that seems often to claim more pride in its history than in the present day, it can be difficult to take this advice and to move beyond the allure of past successes.

Secretary of State Chris Grayling has perhaps fallen into this trap when he announced, ‘We will launch the new, long-term brand for the East Coast main line through the recreation of one of Britain’s iconic rail brands, the London North Eastern Railway (LNER)’.

There is of course much to be admired in LNER. According to Wikipedia, it owned 7,700 locomotives, 20,000 coaching vehicles, 29,700 freight vehicles, 140 items of electric rolling stock, six electric locomotives,10 rail motor cars, six turbine and 36 other steamers, eight canals, docks and harbours in 20 locations, including Grimsby, Hartlepool, Hull, Immingham, Middlesbrough, some eastern Scottish ports as well as those at Harwich, Lowestoft and London, two electric tramways, 23 hotels and a 49% stake in the haulage firm Mutter, Howey & Co Ltd! Its image lives on in memories of its record-breaking passenger locomotives, glamorous destinations and its ground-breaking branding and advertising.

Yet beyond the iconography, LNER was much more than just the ‘A4’s! It hauled more than one-third of Britain’s coal, and derived two-thirds of its income from freight services.

In the early years it struggled with the effects of the economic depression, shedding almost 30,000 staff in the mid-1930s (the lessons of relying on coal for income growth also perhaps forgotten in recent times!). How it managed, or otherwise, to resolve twin issues of economic uncertainty on a mixed traffic railway might actually therefore provide the greatest lessons to today’s new proposition.

Thus far, of course, we know little about the shape and structure of the future LNER. It will be a partnership between the public and private sectors, with one single team operating the railway. There will be greater staff ownership.

There will be an independently chaired Board with representatives of both the train operating team and Network Rail, as well as independent members who will ensure the interests of other operators on the route are taken into account.

Beyond that, details are scarce.

By this description there would be little conceptual difference between this and the existing ScotRail Alliance, or its predecessor on the South Western, yet there is every indication in the rhetoric that the Department for Transport sees LNER as going further and deeper than these examples, and naturally this raises a great number of questions for freight, and indeed for other network operators beyond the ‘inter-city’ operator.

The most obvious question is that of geography. In Scotland, Network Rail’s devolved Route and the ScotRail franchise are fairly closed aligned, and the same was true of South West Trains. Not so with LNER, as the inter-city operator runs on only a fraction of the track of the London North East and East Midlands Route.

Integrating the franchise and Route therefore would mean the managing director of LNER also runs the tracks to Immingham, Whitby and elsewhere, half of the trans-Pennine routes and the entire Midland main line. This might work if the managing director of the partnership is from Network Rail, but has obvious hazards if she or he is from the franchise owner.

One option might be to split up the Network Rail geography further, but with the draft determination for Control Period 6 already setting a regulated five-year settlement for the Route, this is unlikely to be straightforward. In any case, it is unclear what you would do with the remaining parts of the network, and it certainly does little to reduce complexity.

For freight, one of the major concerns is how to ensure the new partnership is a ‘force for the good’ for freight growth. If the franchise and Route are created to deliver the best outcome for inter-city passengers within a commercial framework, the incentives to care much about other users are inevitably weak.

We would like to see a specific management incentive in place to encourage positive engagement, much like Transport Scotland has placed on the ScotRail Alliance in its High Level Output Specification. The promised board could help, but it will have to have much more authority than the current supervisory boards if it is to do so.

The role of the System Operator also needs to be clarified, and we are increasingly convinced it must have a veto at Board level if it is to continue to be part of an increasingly devolved Network Rail. There are regulatory and legal protections that also need to be considered, and we will come back to this in future columns.

Government is right to pursue a vision that delivers the very best outcome for rail users, as LNER did in the past. In doing so, it needs now to focus on the how, as well as the ambition, and make sure that freight retains its key role on the East Coast.

An opinion column of the Rail Freight Group,