Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence


Memorandum by Combined Transport Limited (CHT 11)

1.  WHO WE ARE:

  Combined Transport Limited (CTL) is a wagon operating company moving canvas sided swap-bodies and steel containers as unitized cargo for a number of different Freight Forwarding customers. We contract with railway operators: English, Welsh and Scottish Railway, SNCF, and Trenitalia to provide through timetables and locomotives to haul our wagon sets between nominated UK and Continental rail terminals. Our services commenced in the summer of 1994 and grew slowly year-by-year despite experiencing a Channel Tunnel fire, blockades of facilities, floods in Northern Italy and numerous railway strikes.

2.1  THE DISRUPTION:

  The Committee will already be aware of the measures of fines that were introduced in 2001 under the "Extension of the Civil Penalty to Rail Freight Wagons" by the Home Office Immigration and Nationality Directorate. We had been provided with a Consultation Paper in the autumn of 2000. The industry's general response was that a fine of £2,000 per head was not a positive solution to the growing problem of illegal immigrants attempting to enter the UK from across the Channel. Nevertheless reasoned arguments for alternative measures appeared to have been disregarded and the Home Office proceeded with their plans. Letters of protest to Ministers in office at the time brought no satisfactory answers to indicate they shared the concerns of the rail freight industry and furthermore such measures would do nothing to help the Government policy in getting more freight onto rail. However later in 2001 the imposition of fines was suspended with the problem of "asylum seekers" and the imposition of fines being totally ineffective.

2.2  CALAIS-FRÉTHUN

  On 6 November SNCF suddenly stopped all UK bound trains for Health & Safety reasons. French Customs have their frontier post at Fréthun Freight terminal where a change of National locomotives takes place. Stationary trains were now being invaded, en mass, by several hundred asylum seekers.

2.3  REVISED SERVICE CONTINGENCIES

  A reduction in active train paths and a revised timetable were imposed by SNCF to meet the limited "time window" for trains to proceed from Calais to the UK. This had the immediate affect of significantly reducing the level of business we were able to maintain. In order to assist the railway operating companies we suspended our Paris service on 3 December so that our wagon resources could be concentrated on the more profitable services to and from terminals in the Milan area.

2.4  CTL'S WAGON FLEET COSTS.

  These disruptions seriously affect our wagon flows. Wagons are our sole working asset with a large majority on long term rental contracts. We are operating and having to maintain (for Railway Health and Safety) far more wagons that we need under these service restrictions. Although we have, wherever possible, returned some in an attempt to reduce our wagon fleet maintenance and rental costs the overall affect is a significant decline in our financial results and place our long term viability into question

2.5  RAIL SERVICES BEING ABANDONED BY THE FREIGHT MARKET

  A service operator needs to maintain a reliable product to satisfy the needs of its customers. The affect of these restrictions is for customers to seek alternative means of transporting their goods. Many of our customers have reverted to road haulage. This has meant that gradually our bookings have decreased to the level needed to meet the rail journeys we were allowed to operate but since the restrictions have continued far longer than anyone could reasonably expect we now find ourselves being unable to find the traffic to fill the services we are permitted to operate. Some customers have openly written to us advising they will never use rail services ever again. If a solution is ever reached it will take many years of highly reliable rail services to persuade, not only these, but to attract new customers.

2.6  EUROPEAN LAW

  It is essential for businesses to be masters of their own destiny and be in control of the basics that govern their profitability. The Treaty of Rome intended for trade to move freely between the countries that form the European Community. However this has hardly been the case for us since 6 November 2001 and there is no visible evidence that this prevailing situation is likely to change in the immediate future. There is a case for the French and British Government to answer in the Strasbourg Courts under European Law on Human Rights for failing to allow trade on this route to move freely.

2.7  CTL'S COST CONTROLS

  Naturally we have taken cost cutting measures.

  1.  Off-hiring some wagons rented on short term leases.

  2.  Moving our London office to cheaper and smaller premises.

  3.  Closing local rail terminal offices in Scotland and London, Willesden.

  4.  Significant reductions in staff by redundancies (43%).

  5.  Naturally wherever possible overheads are being kept to a minimum. With the significant decrease in income our trading position is extremely precarious and continues to give us cause for alarm.

2.8  THE POSSIBLE FUTURE OF RAIL FREIGHT THROUGH THE CHANNEL TUNNEL

  To allow a company such as ours to go out of business will not mean that once these restrictions in Calais are lifted there are likely to be other companies ready to take our place or that we can reform and re-emerge. From our knowledge of the market it will be many years with or without Government incentives before any similar services emerge. The British Government's policy to get more freight onto rail is affected by these current measures because much of our traffic and that of our competitors are moving by road.

2.9  WHAT DOES THE FUTURE HOLD FOR CTL

  Last year we began planning an auxiliary service to accommodate traffic that had either limited access or was unable travel through the Channel Tunnel. The subsequent events in Calais now mean that we can add to this new route traffic intended for our Channel Tunnel services. This is subject to our customers being satisfied in accepting a longer transit time between Manchester and continental rail terminals by our using ferry services operating between Purfleet and Zeebrugge. In June 2002 we intend to launch such a service.

3  THE IMPACT ON SUPPLIERS

3.1  Railway Operators

  There must have been significant impact on the services provided by the National railway companies in France and Italy; not least of the increased cost in security by SNCF in Calais—Fréthun. Our concern is the viability of the International division of the UK private operator English, Welsh and Scottish Railway Ltd. We are confident they will produce their own paper for the Sub-Committee.

3.2  UK Terminal Operators

  As a result of service disruptions in Calais the operator for the Hams Hall terminal in the Midlands, Parsec of Europe Ltd., gave their intention to dispose of their terminal. Hams Hall facilities have since been acquired by ABP Connect and it is hoped they will wish these facilities to be used for international rail business. Another terminal in the Midlands, operated by Tibbett & Britten at Daventry, is being continuously monitored and reviewed by the operator. They too will probably present their situation to the sub-committee.

4  THE IMPACT ON CUSTOMERS

  Several customers have actually written declaring their intentions never to use rail transport. Some of these have lost contracts with Supermarket customers, not just for rail but all traffic worldwide. We have learned that some of these decisions not to use rail have been based on their receiving instructions from their own clients. Many thousands of tons of cargo have been destroyed because of damage beyond economical use. In the case of foods stuffs whole consignments have to be destroyed having been contaminated by human waste and in violation of the Food Safety Act. Customers are continually taking out of service units damaged by illegal immigrants thereby disrupting their traffic flows and subsequently their margins. Insurance premiums are being affected by these losses. In recent months the level of damage has worsened as it appears there have been many incidents of gratuitous damage.

June 2002

  Annex

REDUCTION C.T.L. WAGON FLEET
@ 06/11/0131/05/02
18195


NB.

  Today's fleet: all wagons are long-term lease contracts. We continue to seek further reductions with the help of the Lessor.

CTL CONTRACTED TRAINS—CANCELLED

  For the period covering 6 November 2001 through to 30 April 2002

    All contracts: 695

    Actual trains 242

    Lost Trains 453


 
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