Who operates rail freight?
When British Rail was privatised in the mid-1990s:
- the ownership of the track and infrastructure passed to Railtrack
- the passenger operations were franchised to individual private sector operators and
- the freight services were sold outright to private companies.
Since then, Railtrack has become Network Rail, passenger operations continue to be run under franchise and with significant public subsidy by a variety of train operating companies (TOCs), and most freight operations are run by five private sector companies. There is no public subsidy for freight operations.
Freight Operating Companies (FOCs)
The two largest freight operating companies (FOCs) are DB Cargo and Freightliner, with Colas Rail, Direct Rail Services (DRS) and GB Railfreight (GBRf) accounting for most of the rest. Various other companies run rail operations within their own manufacturing or production sites.
Colas Rail primarily operates infrastructure maintenance services for Network Rail. In addition to the engineering trains, they operate a successful timber service from Carlisle and Scotland to Chirk and convey steel coil from Immingham to Heartlands Park, Birmingham. Colas Rail’s freight business is emerging as a strong contender to established operators. It is owned by Bouygues, the construction and services group based in France.
DB Cargo UK
DB Cargo UK operates intermodal, bulk and logistics services throughout Great Britain and between the UK and Continental Europe via the Channel Tunnel. DB Cargo is owned by the German national railway, Deutsche Bahn (DB).
Direct Rail Services
Direct Rail Services (DRS) was established in 1995 as a supplier of transport services to the nuclear industry and has since expanded to become a leader in providing domestic (i.e. inland terminal to inland terminal) intermodal services. It is a wholly-owned subsidiary of the Nuclear Decommissioning Authority.
Freightliner is the largest rail haulier of intermodal (containerised) traffic in the UK. It also has a bulk division called Freightliner Heavy Haul and it offers bespoke intermodal logistics services through Logico. It also has operations in Australia and continental Europe and is owned by US-based rail company Genesee & Wyoming Inc.
GB Railfreight (GBRf) was launched in 1999 and operates in a range of markets, running intermodal and bulk services as well as infrastructure maintenance services. It is owned by EQT infrastructure through Hector rail Group
There are various other rail freight operators including Victa Railfreight and British American Railways Services Group which has various subsidiaries including Devon & Cornwall Railways, Weardale Railway and Dartmoor Railway.
The tracks and rail Infrastructure
Network Rail owns and operates the UK rail network and infrastructure. It is a public sector monopoly business, answerable to the government via the Department for Transport (DfT), and runs the day-to-day railway through nine devolved, geographically based businesses, called routes.
Freight is included in Freight and National Passenger, the only non-regional ‘route’ as it looks after the interests of services which cross regional boundaries.
Network Rail is 70% funded through a direct grant from the Department for Transport and Transport Scotland. The rest of the funding comes from operators – 11% from fixed track access charges and 14% from variable charges – and 5% from national property and station retail portfolio.
Office of Road and Rail
Network Rail is regulated by the Office of Rail and Road (ORR) an independent economic and safety regulator for Britain’s railway. The ORR sets the targets which Network Rail has to achieve and reports regularly in its performance. It sets the charges to operators, the framework of incentives and the approach to the monitoring and enforcement of ‘control periods’.
Periodic reviews are one of the principal mechanisms by which ORR holds Network Rail to account, and secures value for money for users and funders of the railway. The 2018 periodic review (PR18) covers Network Rail’s outputs and funding for control period 6 (2019-24).