Royal Mail announces plans to cease all rail freight activities

Royal Mail[1] has announced it is to make its final delivery by the railway in October, bringing almost two centuries of mail rail to an end. The postal service, which is Chaired by Keith Williams, who is also the Chair of the Board of the Great British Railways Transition Team and was also the man behind the Williams Review, informed staff on Wednesday of its plans to sell off its freight trains and switch to road deliveries. This is despite previous commitments to increase its use of rail freight to help meet its own net zero targets, and following the opening of its largest UK parcel facility launched at Daventry International Rail Freight Terminal late last year.

DB Cargo UK[2], which has been contracted to operate and maintain Royal Mail's 15-strong fleet of Class 325 electric trains for the last 11 years, issued a statement to staff on Wednesday morning. Its Chief Executive Officer Andrea Rossi said: "Today's decision is a blow for DB Cargo UK and our many dedicated colleagues who have worked incredibly successfully over the years to meet Royal Mail's demands and regarding reliability and punctuality. "Our performance for Royal Mail has consistently high throughout the term of the contract, and Royal Mail have clearly stated that this decision has not been made due to any performance concerns.

"To learn that Royal Mail is now planning to rely solely on road haulage to move customers' letters and parcels around the UK is not just disappointing for DB Cargo UK, but the wider rail freight sector too." DB Cargo UK has said the decision by Royal Mail has been made because of the increasing costs of electric traction (EC4T) and the high investment needs of its ageing 325 fleet. "It has explicitly reiterated our excellent performance in operating and maintaining their services and units over the years," added Andrea. "So, this is not a decision against DB Cargo UK but one against the economics of rail freight as a mode of transport."

The news is a real blow as the industry works towards the Department for Transport's rail freight growth target of 75 per cent growth in net freight tonne kilometres by 2050. Based on current volumes, it is estimated that Royal Mail's decision will lead to an additional 10,000 HGV movements per year on the UK's road network. This isn't including its plans to reduce the number of domestic flights in half, something announced earlier this month which will further increase HGV movements.

It adds to growing concerns that the difference between road costs and rail costs is widening further with ever-increasing prices including the inflationary pressures, track access costs going up even more than the Consumer Prices Index, and port charges increasing substantially with lifting and handling charges applying to freight but no to road hauliers. Andrea has said DB Cargo UK will be seeking urgent talks with the new Labour Government, policymakers and other key industry stakeholders to see what more can be done to level the playing field between rail freight and the "heavily subsidised" road haulage sector. He adds: "For some time now we have been lobbying Government to address the issue of high EC4T charges which are beyond the price many of our customers can afford to pay - indeed this is why we ourselves had to take the difficult decision to withdraw our Class 90s.

"The decision by Royal Mail, one of the UK's highest profile companies, shows that real change is needed now if we are to have any chance of meeting the Government's plan to boost modal shift by 75 per cent by 2050. "Rail freight has the potential to play a major role in helping the UK to meet its net zero carbon reduction targets, we just need the political willpower and the right policy framework to deliver." A Royal Mail spokesperson said: "Royal Mail will continue to use rail services to transport mail across the country however our own freight trains are at the end of their operational lives.

The trains are almost 30 years old and it is increasingly difficult to secure parts for maintenance and the routes we need to meet our service requirements. "To improve reliability, increase cost effectiveness and remain consistent with our environmental goals, over the coming months we will cease operating our own trains whilst continuing to use a mix of rail, road and air to transport mail to all corners of the UK." Michael Solomon Williams, from Campaign for Better Transport, said: "This is a deeply concerning decision from Royal Mail which undermines the huge economic and environmental benefits of transporting freight by rail.

By ending nearly 200 years of mail rail, Royal Mail will be directly responsible for more lorries congesting and polluting our roads. "High electricity costs are a barrier for many businesses wanting to use rail freight which must be addressed. The new government should work with Royal Mail to reverse this decision and make it clear that freight belongs on rail."

Rail Partners' chief executive Andy Bagnall said: "Today's announcement reflects the challenging conditions affecting the rail freight sector. "Despite the wide consensus on the importance of rail freight growth to reducing carbon emissions and getting lorries off our roads, such growth won't happen on its own. To ensure we fully realise the benefits of rail freight, it is essential to create a level playing field between different modes of transport so that freight customers aren't priced out of making the right decision for the environment by rising costs compared to road haulage.

"Rail Partners and its freight members want to work with the new Labour government on policies that will make rail more competitive against road and drive continued private sector investment from the rail freight industry to grow and further decarbonise the sector."

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References

1. ^ Royal Mail (www.royalmail.com)
2. ^ DB Cargo UK (uk.dbcargo.com)
3. ^ Download article (news.railbusinessdaily.com)