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DB surrender further contracts ?


br2975
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I've been told today that DB has 'surrendered' two contracts in South Wales, namely the container traffic to Dow Corning on Barry Dock (tripped from Newport ADJ) and the Ford engine plant at Bridgend (the future of which is in jeopardy anyway).

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Can anyone confirm this ?

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Is another operator lurking in the wings (the American green team, or the French yellow jersey ) ?

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Brian R

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Surrendering sounds like a very worrying word on a business, when your core business of coal has gone surely you want to be expanding intermodal and automotive contracts.

 

Or is it simply a cost benefit to withdraw from much of Wales and allow those with lower costs to take over, that doesn't sound much better.

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I've been told today that DB has 'surrendered' two contracts in South Wales, namely the container traffic to Dow Corning on Barry Dock (tripped from Newport ADJ) and the Ford engine plant at Bridgend (the future of which is in jeopardy anyway).

.

Can anyone confirm this ?

.

Is another operator lurking in the wings (the American green team, or the French yellow jersey ) ?

.

Brian R

I went down to see mum at Llandough yesterday; just past  Canton depot, a DBC 66 passed with an empty rake of intermodal flats. It gave the impression that the next time I saw this train, it wouldn't be a red and gold engine on the front.

The only problem I can see for any of the other three operators (don't rule out GBRf) haven't got much in the way of yard facilities. Freightliner have East Usk, or so it would seem from the number of wagons stabled there, but Colas and GBRf don't seem to have anywhere. DBC have ADJ and Tidal Sidings; I don't know if Network Rail or the ORR could compel them to hand these facilities to potential competitors.

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I went down to see mum at Llandough yesterday; just past  Canton depot, a DBC 66 passed with an empty rake of intermodal flats. It gave the impression that the next time I saw this train, it wouldn't be a red and gold engine on the front.

The only problem I can see for any of the other three operators (don't rule out GBRf) haven't got much in the way of yard facilities. Freightliner have East Usk, or so it would seem from the number of wagons stabled there, but Colas and GBRf don't seem to have anywhere. DBC have ADJ and Tidal Sidings; I don't know if Network Rail or the ORR could compel them to hand these facilities to potential competitors.

 

Technically all freight yards are still owned by NR - they were leased in a long term basis to the FOCs upon privatisation, but a couple of years ago quite a few were handed back to NR.

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Indeed - there is always the human side to consider, that figure is a small proportion of the jobs that were lost in the 60s but its probably harder to find alternative employment these days...

 

Phil

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In early next year, there was meant to be an Invitation to Tender for a new FOC for the Clitheroe - Avonmouth/Mossend cements which has been DB for as long as I can remember. Apparently, the process has been brought forward and there could a new FOC this year. 

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Indeed - there is always the human side to consider, that figure is a small proportion of the jobs that were lost in the 60s but its probably harder to find alternative employment these days...

 

Phil

 

But DBS are not a Charity - they are a private business with non UK shareholders to satisfy. Thanks to the rapid cessation of coal trains due to HM Government policy it was inevitable that there would be shrinkage in the company.

 

I guess the other issue might be that due to DBS basically ending up with the bulk of BR freight operations in EWS days it may well have inherited inefficient working practices that are hard to change due to staff / Union hostility. By contrast smaller and more recently established small players like GBRF and Colas will have been less encumbered by 'BR era baggage' with respect to T&Cs etc and thus make them better positioned to take on smaller or more unusual contracts or cherry pick the most remunerative ones from DBS.

 

Obviously not much comfort to DBS staff mind....

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The biggest problem is the FOCs have undercut each other to the degree where there is hardly any profit for anyone

Its a very sad state of affairs when the competition they should be targeting, road haulage gets even bigger

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The biggest problem is the FOCs have undercut each other to the degree where there is hardly any profit for anyone

 

 

But what else could they legally do?

 

And I imagine that road haulage is just as fiercely competitive.

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But what else could they legally do?

 

And I imagine that road haulage is just as fiercely competitive.

I'm sure it is ,but rail freight has got stupid with everything pared right back to the bone.

Wagon maintenance for instance used to be carried out in proper depots now its often done by a man in a van working outside in mud and all sorts.

Although pay is good on some companies the conditions are awful and quite often some feel their lives are not their own

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The biggest problem is the FOCs have undercut each other to the degree where there is hardly any profit for anyone

Its a very sad state of affairs when the competition they should be targeting, road haulage gets even bigger

You can only compete with road haulage if your costs are low enough!

 

The road freight industry has taken advantage of EU enlargement to recruit large numbers of drivers from Eastern Europe on very low wages and who are willing to put up with some pretty awful conditions. For example https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-39196056

 

How exactly is railfreight going to compete against such practices?

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Wagon maintenance for instance used to be carried out in proper depots now its often done by a man in a van working outside in mud and all sorts.

 

What makes you think road haulage is any better on average. Many old farmyards or muddy railway yards are now home to HGV operators. Heavy construction equipment is near always maintained out of a van often in muddy fields.

When you have to pay business rates on depot buildings, it's easy to see why man in a van has been adopted more widely (I think private owners often used this method even in BR days).

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I've been told today that DB has 'surrendered' two contracts in South Wales, namely the container traffic to Dow Corning on Barry Dock (tripped from Newport ADJ) and the Ford engine plant at Bridgend (the future of which is in jeopardy anyway).

.

Can anyone confirm this ?

.

Is another operator lurking in the wings (the American green team, or the French yellow jersey ) ?

.

Brian R

Have a heart Bri,think of me eyesight butty !

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You can only compete with road haulage if your costs are low enough!

 

The road freight industry has taken advantage of EU enlargement to recruit large numbers of drivers from Eastern Europe on very low wages and who are willing to put up with some pretty awful conditions. For example https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-39196056

 

How exactly is railfreight going to compete against such practices?

 

 

By having only one driver per train, equivalent to over twenty or thirty by road for the same load and by being much more efficient users of fuel thanks to the much lower rolling resistance of rail verses road

 

Road transport is mostly favoured for its wagon load flexibility, rather than a bulk carry, and I believe the vast majority of road haulage journeys are under forty miles.

 

The main problem rail freight has are track access charges which reflect (or near reflect) the true cost of providing their infrastructure, with no subsidy.

 

Road haulage vehicle duties do not reflect the true cost of the roads they use, where they enjoy enormous cross subsidy from other road users and to a significant extent on local roads from the state (local councils).

 

Go check your council tax bill there's a nice wedge of cash that goes to pay for highways.

 

There was a story in the newspapers of complaints from various businesses about a key road over rail bridge in Birmingham that couldn't take the latest heaviest EU HGVs. Turns out it was Network Rail's responsibility to do the work and bare the cost of the upgrade, an upgrade that was going to disadvantage rail's competitiveness and the local media, with no lack of irony, were giving them hell for dragging their heals.

 

That's how the rules can often be rigged against the railway.

 

They tried to open a quarry up in the North Yorkshire Moors the locals wanted the aggregates to go out by rail but the company wanted to use HGVs, turns out those HGVs were going to hammer the local lanes and guess who would have to to pick up the bill for the extra millions it would cost to maintain them, you guessed it the local council.

 

No wonder they didn't want to use rail, though I don't believe the quarry ever went ahead in the end.

 

Travel to a football match by train and the police and signalling cost is payed for out of the fare box, watch the match and the police cost is paid from the ticket price, drive home and the police cost and signalling all comes courtesy of the local council or Highways agency

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They tried to open a quarry up in the North Yorkshire Moors the locals wanted the aggregates to go out by rail but the company wanted to use HGVs, turns out those HGVs were going to hammer the local lanes and guess who would have to to pick up the bill for the extra millions it would cost to maintain them, you guessed it the local council.

 

No wonder they didn't want to use rail, though I don't believe the quarry ever went ahead in the end.

 

 

 

If it is the same one, the world's largest potash mine, just south of Whitby, it is going ahead and will open in 2021. It involves a 23 mile tunnel, under the NY Moors National Park, from the mine to a processing plant on Teeside. Whilst rail will be heavily involved in construction and waste trains, the material, once opened, will be transported along the tunnel by conveyor belt.

 

I totally agree with all of the rest of your post.

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But DBS are not a Charity - they are a private business with non UK shareholders to satisfy. Thanks to the rapid cessation of coal trains due to HM Government policy it was inevitable that there would be shrinkage in the company.

 

I guess the other issue might be that due to DBS basically ending up with the bulk of BR freight operations in EWS days it may well have inherited inefficient working practices that are hard to change due to staff / Union hostility. By contrast smaller and more recently established small players like GBRF and Colas will have been less encumbered by 'BR era baggage' with respect to T&Cs etc and thus make them better positioned to take on smaller or more unusual contracts or cherry pick the most remunerative ones from DBS.

 

Obviously not much comfort to DBS staff mind....

I'd counter this by saying that some drivers have effectively stabbed their own colleagues in the back by agreeing to work to some of the "conditions" that smaller players have . Whilst industry terms and conditions could well do with modernising in some cases , perhaps not to the extent that some seem to go to.  

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The fact that sadly DB are shedding between 700 and 800 Driver's is part of this.

The irony of this is that in conversation with a DBC controller around the Southampton area it was stated that trains are being cancelled because they haven't enough drivers.

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You can only compete with road haulage if your costs are low enough!

 

The road freight industry has taken advantage of EU enlargement to recruit large numbers of drivers from Eastern Europe on very low wages and who are willing to put up with some pretty awful conditions. For example https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-39196056

 

How exactly is railfreight going to compete against such practices?

 

This may, or may not, all change after 2019. EU competition rules allow "cabotage" (known as the Community Licence to Operate) which is the ability by the road haulage companies of one country to move goods internally in another, or between two other countries. If this rule disappears after Brexit, and cabotage is no longer allowed, a number of things may happen:

 

a) Road transport costs may rocket within the UK if lorry firms have to pay full minimum wage rates, or better, to UK nationals or legal EU residents.

 

b) Road haulage may become unreliable or very short of capacity, unless major investment takes place, including item (a)

 

c) Transport firms may find another way around the new rules, by creating UK satellite companies and continuing to employ cheaper foreign labour, on visas or whatever the new arrangements might become, but in UK registered lorries.

 

d) Continue the Community Licence arrangements, post-Brexit. This is the option that the RHA have been calling for. Currently that system only works for those countries within the EU, or EFTA, and for Switzerland under a bi-lateral agreement. All those countries have to acknowledge the ECJ as the highest court for the enforcement of the applicable rules and conditions. That could be the red line that this government may have to step across, if they want to go down this route.

 

 

On the other hand, the disappearance of cabotage may make the business of some UK hauliers much harder in Europe. Although a much smaller number (just 14% to 86% for the rest) than say Portuguese, Spanish or Eastern European trucks, UK trucks are still around and make a profit primarily on back loads with drop-offs to other countries, just like the rest do. There may be some compromise over the rules, in Brexit negotiations, to protect what little UK business there is, and in recognition of the significant damage such a change would make to UK transport and industry costs.

 

The application of the UN rules on international freight - TIR carnets and full inland customs checks and seals - would hurt even more, but are probably the only real answer to 30 mile traffic jams at Dover/Cheriton and Calais/Frethun. The UK would have to sign, and be accepted, as a member to the existing convention, as its membership for non-EU trade currently resides with the EU. It would require the setting up a larger number of secure, inland customs departure clearance, seal and certification areas than exist at present, in both the UK and in France, Belgium and the Netherlands, for it to work.

 

We will have to wait and see (as I can see little mention of the issue in reports of the negotiations thus far - the RHA were still pleading for a government strategy on this in the early summer). There will presumably be some sort of compromise eventually, certainly during transition (if that happens), but it could potentially give rail transport a better competitive footing domestically, and perhaps internationally. That might explain why there is growing interest in inter-modal traffic, and in further rail connected inland distribution centres. Some outfits have identified this future problem. The cost of that to the national economy and to our individual buying power however, could be significant.

 

Who can plan ahead in this situation? But I am surprised DBC is retrenching as much as it is, despite the huge decline in coal haulage, rather than holding on a bit longer to be able to take advantage of the potential situation. What do they know that we don't, I wonder?

Edited by Mike Storey
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DB is also trying to get rid of its Arriva buses division in the UK, maybe a sign for post 2019? Quite who will fill this gap is unknown, as most of the other large bus operators are owned by foreign companies. How many of our FOCs are wholly-owned by UK companies? Very few I suspect.

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DB is also trying to get rid of its Arriva buses division in the UK, maybe a sign for post 2019? Quite who will fill this gap is unknown, as most of the other large bus operators are owned by foreign companies. How many of our FOCs are wholly-owned by UK companies? Very few I suspect.

 

FOCs - ultimate owners country of origin

 

Colas - French

Devon & Cornwall - US

DRS - UK

DB Cargo - German

Freightliner - US

GBRf - Swedish

Mendip Rail - German

 

Interesting times ahead!

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This may, or may not, all change after 2019. EU competition rules allow "cabotage" (known as the Community Licence to Operate) which is the ability by the road haulage companies of one country to move goods internally in another, or between two other countries. If this rule disappears after Brexit, and cabotage is no longer allowed, a number of things may happen:

 

a) Road transport costs may rocket within the UK if lorry firms have to pay full minimum wage rates, or better, to UK nationals or legal EU residents.

 

b) Road haulage may become unreliable or very short of capacity, unless major investment takes place, including item (a)

 

c) Transport firms may find another way around the new rules, by creating UK satellite companies and continuing to employ cheaper foreign labour, on visas or whatever the new arrangements might become, but in UK registered lorries.

 

d) Continue the Community Licence arrangements, post-Brexit. This is the option that the RHA have been calling for. Currently that system only works for those countries within the EU, or EFTA, and for Switzerland under a bi-lateral agreement. All those countries have to acknowledge the ECJ as the highest court for the enforcement of the applicable rules and conditions. That could be the red line that this government may have to step across, if they want to go down this route.

 

 

On the other hand, the disappearance of cabotage may make the business of some UK hauliers much harder in Europe. Although a much smaller number (just 14% to 86% for the rest) than say Portuguese, Spanish or Eastern European trucks, UK trucks are still around and make a profit primarily on back loads with drop-offs to other countries, just like the rest do. There may be some compromise over the rules, in Brexit negotiations, to protect what little UK business there is, and in recognition of the significant damage such a change would make to UK transport and industry costs.

 

The application of the UN rules on international freight - TIR carnets and full inland customs checks and seals - would hurt even more, but are probably the only real answer to 30 mile traffic jams at Dover/Cheriton and Calais/Frethun. The UK would have to sign, and be accepted, as a member to the existing convention, as its membership for non-EU trade currently resides with the EU. It would require the setting up a larger number of secure, inland customs departure clearance, seal and certification areas than exist at present, in both the UK and in France, Belgium and the Netherlands, for it to work.

 

We will have to wait and see (as I can see little mention of the issue in reports of the negotiations thus far - the RHA were still pleading for a government strategy on this in the early summer). There will presumably be some sort of compromise eventually, certainly during transition (if that happens), but it could potentially give rail transport a better competitive footing domestically, and perhaps internationally. That might explain why there is growing interest in inter-modal traffic, and in further rail connected inland distribution centres. Some outfits have identified this future problem. The cost of that to the national economy and to our individual buying power however, could be significant.

 

Who can plan ahead in this situation? But I am surprised DBC is retrenching as much as it is, despite the huge decline in coal haulage, rather than holding on a bit longer to be able to take advantage of the potential situation. What do they know that we don't, I wonder?

 

 

I rather suspect if Macron gets his way cabotage is about to disappear within the EU as well.

 

One or two other EU nations are making a fuss about this because the drivers (and other workers) pay their taxes back home, not in the host country, and the respective revenue authorities have woken up to the fact it's costing them a lot of lost revenue.

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