Keeping Aggregates On Track
In recent years the rail industry in general has been through many changes that have generated a poor press. However, in rail freight the story has been a great deal more positive. What customers are looking for here is predictability, quality of service and a commitment from the rail freight service providers that they can deliver the reliability they promise. In the following article Chris Pendlenton, general manager construction and petroleum of English Welsh & Scottish Railway (EWS), Britain’s leading haulier of aggregates and minerals, outlines how EWS are helping to meet the needs of the quarrying industry.
As the private sector successors to British Rail’s bulk freight division, EWS have now been hauling aggregates to market for seven years. It has been a time of profound change for both the railway industry and its customers. Happily, at least in this particular market, the changes and events have not been as cathartic as those affecting the company’s other base-load markets, such as steel and coal, and from the railway perspective it has seemed a very positive period, with a similarly positive outlook.
EWS’s quarry customer base remains intact, albeit that recent mergers and takeovers have changed names and sometimes rationalized operations. When the company began the minerals industry was contemplating growth of huge proportions in MPG6, with coastal superquarries proposed as the key sourcing solution. These are more sober times, but the fact remains that EWS now haul 50% more tonnes of crushed rock than they did seven years ago. Given that rock production nationally remained almost static during that time, this implies that rail has increased its role in the haulage of crushed rock from 12% to 17%. That this is not simply the effect of economic cycles or regional market demand variations is shown by the number of new terminals opening up around the country. In 1996 there were 55 aggregate railheads nationally with only one in Manchester. Today there are 75 nationally, five of them in Manchester, and another 10 are expected to join the national map in the next 12 months.
EWS have therefore been true to their business objective of growth and can see further opportunities in the future. This growth strategy rests on the key elements of awareness of market, customer needs and opportunities, together with the right products, facilities and development capability for them, at the right prices and the right time, all backed up with consistently satisfactory delivery performance within a customer service ethos.
From a railway operators point of view, the market has changed in several ways over this seven-year period, all of them offering a challenge or an opportunity. There has been the relative slowdown in trunk-road building, the advent of the aggregates tax and the resultant rise of secondary aggregates and recycled materials, the growing role of gritstone wearing courses, and the environmental pressures on replenishing sand and gravel permissions. EWS have responded to, and aimed services at, each of these. For example, seven years ago there were no stone trains out of South Wales, whereas today there are 10 a week bearing gritstone to asphalt plants in the Midlands and the South-East. The company also moves slag from the major steel plants into the market, as well as PFA for use as a fill material in road schemes, such as the A63 at Selby.
The changing make-up of the markets, with the emphasis on major road building giving way to more varied work, seems to be swinging the advantage in favour of companies that have marketing bases, depots and added-value plants located in the market rather than at the quarry, and this may partly lie behind the rise in the number of railheads. Such facilities may also offer space for blending recycled materials with primary aggregates to meet price- and quality-sensitive specifications. EWS have a large land bank of sites in the right places to meet this need.
Customer mergers and quarry exhaustions have also raised the possibility of production rational-izations, and have led to more of the market being sourced from rail-connected quarries, and in some cases to interest in reconnecting inherited quarries to the rail network to serve expanded or changed market hinterlands.
Products, capability and flexibility
EWS’s core ‘product’ remains a national coverage of mainly trainload services between quarries and railheads or plants. In one respect, however, the company has caught up with the revolution in hauling power and reliability pioneered by Foster Yeoman with their GM locomotives hauling very heavy train loads. With payloads up to 3,750 tonnes per train, as opposed to the more typical norm of around half that amount, these ‘supertrains’ hugely improved unit costs and remain a goal to which other operations aspire. One of EWS’s first actions was to order a 250-strong fleet of similar locomotives to achieve the same benefits of heavy haulage capability and reliability.
Customer needs have changed too, and it is EWS’s belief that there must be expansion in the utility of the rail assets that the company’s customers have invested in, ie rail-loading plant, market railheads and wagons. This has seen more flexible single deals being made to secure rail a role in passing major projects through regular or temporary terminals. The benefit of this has not only been better utilization and cash generation, but also the habit of temporary terminals to mutate into permanent depots handling routine market demands once the ‘big’ job has finished. There are many examples of this, Hamworthy, Exeter and Ashbury being but three.
To serve this sort of opportunity and also to prime the pump, EWS have invested in a fleet of high-capacity box wagons and now offer packaged terminal provision and handling services as part of the deal. This is usually deployed against short-term jobs but, once again, can continue into a permanent arrangement. One customer, for example, contracts with the company to lead stone from the quarry directly into a number of its plants via EWS’s own railheads and sub-contracted handling and haulage.
A large fleet of intermodal flats has also been added to the company’s conventional bulk haul equipment, and very soon EWS will be leading construction materials into Heathrow’s Terminal 5 project in tanktainers. There is every reason to explore intermodal applications in the fields of niche stones on network services, perhaps in leading containerized bitumen into asphalt plants in quarries, railheads and their hinterlands. A fleet of cement or powder/filler pressure tankers has also been acquired to allow offers into these markets, which are currently showing an interest in rail haulage.
Part of EWS’s unique offer as a rail operator is the degree of capacity and flexibility the company is able to make available to its customers. Compared with road, EWS offer an unparalleled ability to place thousands of tonnes of stone in a terminal through a single phone call the previous week to the company’s customer service centre in Doncaster. While most services need to be timetabled, EWS’s short-term planning team can generally expedite most requests whether in a timetable or not. Longer-term capacity is also available, through the company’s land assets, to provide terminals for permanent or one-off project needs.
Above all, EWS’s commercial philosophy, backed by a large, nationally disposed resource base, is to offer customers more than just the tidy contracted regular routes. Given a good base of that type of traffic, the company is also able to handle the not so tidy, the campaign of several trains, the radial operation or the movement of customers’ wagons to and from repair works. Added to this is an organizational capacity to develop new routes, terminals and wagon designs, with all the necessary technical back-up, through to planning and political assistance, and the services of an in-house grant-procurement expert.
Part of the flexibility that customers look for is commercial, and once again the aim is to meet these expectations by offering contract structures that recognize a fair balance between the company’s need for revenue-earning utilization of its trains — which, after all, if not used, are instantly perishable — and customers’ own requirements for fair recognition of the vagaries of modern competitive markets and the need to change plans and commitments accordingly.
On today’s congested railway, and in the often constrained limits of many quarries and terminals, there are practical limits to the extension of the really big ‘supertrain’ concept. Growing the role of rail in the stone and sand and gravel markets must now also rely on flexibility and the efficient use of smaller units achieving throughput through higher speeds of running, as well as the efficient use of terminal handling time.
A key post in EWS’s construction team is devoted to the constant pursuit of improved efficiency. There is much to be gained to mutual financial advantage by refining train plans, aiming always at the twin prizes of lower unit costs and better reliability.
The key word here is mutual, as the big benefits stem from railway operators, network providers and customers working together to overhaul and refine all the many components of efficient haulage cycles, eg payloads, round-trip times etc. Here, EWS are pushing for improvements from Network Rail regarding the gross loads they will allow the company’s locomotives to pull, as well as targeting wagon design, with its potential for better tare-to-payload ratios, and optimum length, so the maximum amount of stone can be loaded in sidings of finite length. The company is also looking at wagon suitability for various stone densities, and at incentives for full loading, within safety parameters.
The next target is running times on the network in order to beat bottlenecks such as crossing London or other major conurbations in the rush hour, and getting into terminals in good time before planning constraints stop unloading for the night.
Coupled to this are train turnaround times, ie the loading and unloading rates, where the aim is always to try to reach the goal of the most round trips for the train per week, thereby obviating the need for additional wagon sets to meet the target throughput.
There are opportunities to explore, with customers, the redesign of terminals in terms of their capacity to handle longer trains, to speed up discharge and to allow the handling of more than one train at a time. A bolder step, and one that EWS believe the quarrying industry ought to consider, is shared occupation of a terminal, especially where sites and planning permissions are hard to obtain. The more that planning authorities are pressed to allow added-value planted railheads in their regions, the more the big conurbation authorities in particular are likely to insist on some limit to their proliferation if ‘everybody wants one’.
Ultimately, the goal is continuous improvement that benefits both parties, drives down the unit cost and, from EWS’s point of view, helps secure and grow the economic place of rail in the construction market.
The rail industry has been affected by some high-profile shortcomings in the performance of its infrastructure and particularly its passenger trains. The transition to the private sector has been accompanied by much inwardly focused change, and EWS have had their share of this. For example, centralizing customer service and planning in Doncaster a few years ago resulted in lost experience and huge training needs for raw recruits. But this is in the past and today EWS are fully confident of meeting any of their customers’ needs for good, predictable performance underpinned by key performance indicators. The key measures of the success of the company’s performance are that the ordered trains run, that they run punctually and that they run full. Contract performance is kept under regular joint review to ensure that the company meets its obligations, even when it is required to stretch to deal with changes of volume, route or time at short notice.
The rail industry
Much energy is applied towards ensuring freight keeps its rightful place on the rail network. With increased congestion in some areas, the backlog of maintenance and renewal, major upgrades (as on the west- and east-coast routes), and the competition for space from the passenger companies, there is a lot to do to manage performance and growth. A constant challenge is the ever-growing pressure from Network Rail for blockades of routes in order to carry out ‘big bang’ renewals. This magazine’s audience will have links with the construction companies that carry out these jobs but, as a freight operator, EWS have to challenge such blockades where diversions are not practicable – passengers can be bussed but stone cannot! There is also the constant battle for the best paths across the network and through the big bottlenecks. As the biggest rail freight operator, EWS is powerful enough fully to press for the interests of its business and customers in an increasingly passenger-dominated railway, whether this be at the courts of the Strategic Rail Authority (SRA), at the Office of the Rail Regulator or at the Department for Transport.
Another battle the rail industry and its customers must join forces to fight is to ensure the restoration of the SRA’s budget for Freight Facility Grants. These have been frozen for the financial year 2003/4, at least in England. The aggregates industry has been a major user of these grants and the current freeze, even if it is only for a year, will disrupt the continuity of development. Although this is not thought to be anything more that a short-term freeze, all those who have an interest in the continued expansion of rail freight’s role should not relax in their efforts to lobby for the earliest possible restoration of the grants. Individual customers, both existing and potential, have put their views to SRA chief Richard Bowker and the Secretary of State for Transport, Alistair Darling. So too has the Quarry Products Association, which has quite rightly reminded the Government of its statements linking the aggregates tax and support for rail grants.
EWS enjoy the mature and confident relationships that have developed over the company’s long association with the quarrying industry. Above all, the company would like to feel it is a part of the quarrying industry as much as it is a rail business, and to this end it maintains a team of market managers with many years’ experience in dealing with the quarrying industry. Indeed, the company recruits for these posts from the quarrying industry as well as from within, thereby giving the team a balance of experience from both sides. These individuals are account managers in the full sense and have the range of skills and support necessary to keep the business moving forward through service, development and negotiation.
EWS will once again be exhibiting a range of current hardware at this year’s Hillhead exhibition in June, where all the team will be on hand to discuss any of the issues outlined above.