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Shaw Report calls for 'virtual freight route'

23 March 2016

A report into the future of Network Rail has rejected privatising the company and has instead focused on devolving responsibility to its main operating routes and attracting further private sector investment.

The Shaw Report, by HS1 CEO Nicola Shaw, has also called for a new, dedicated route for the north of England.

In order to maintain the benefits of economies of scale within a system where more responsibility is devolved to the main geographical routes, the report calls for the creation of a Route Services Directorate.

This would “act as a provider to the routes of services for which economies of scale or scope might be retained through centralised delivery, or for which a degree of network-wide coordination is needed,” said the report.

The Route Services Directorate would procure specialist resources such as Network Rail’s yellow plant, which has equipment to monitor and maintain the state of lines and infrastructure.

It is unlikely other providers would be able to match this capacity, the report said.

However, it also suggests that some services, for example the welders responsible for welding rail sections together, or generic back office functions, could be outsourced.

In response to complaints that Network Rail has an ongoing skills shortage partly because over reliance on contractors and short-term thinking, the report called for better long-term planning in rail policy.

It said a longer-term understanding of political priorities, such as the timescales of major innovations such as introducing digitised signalling, would give the supply chain sufficient lead time to train delivery staff.

Zero hours contracts in the supply chain meant there was limited staff loyalty and skills were lost to other industries or countries.

Stakeholders, particularly those in the supply chain, complained to the report’s authors that five-year control periods are too short, as many projects take more than five years to plan and deliver.

Just 47% of the freight companies that responded to Network Rail’s customer satisfaction survey thought the company was doing its best for the freight industry.

The report proposed a virtual freight route to stand alongside the devolved geographical routes and manage relationships between freight operators and the other routes.

This new freight route would also help develop and implement freight policy, manage freight performance and act as a “champion” to ensure that freight operators are not overlooked in a primarily passenger-dominated railway.

It would offer freight companies and customers a single point of contact to arrange access to multiple routes and engage in very short-term train planning.

“This is particularly important given that freight flows are more variable than passenger flows and can be required at very short notice,” said the report.

It would be headed by a freight CEO who is on equal standing to route CEOs.

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