Track Access Charges should be left in the sidings
‘Waive’ goodbye to Track Access Charges (TAC) – the Department for Transport and Network rail have announced that for the next six months, they’re waiving TAC for new freight trains on the railways. This is something we’ve long been calling for as a way to boost rail freight growth and get damaging HGVs off our roads. But what are these charges, and why is waiving them such a good thing?
In Britain, rail infrastructure is primarily managed by Network Rail, which charges train operators a fee for using its tracks. These fees, known as Track Access Charges, are vital for funding the maintenance and development of the rail network. However, these charges have significant implications for both the rail freight industry and Open Access Operators (OAOs).
TAC cover the cost of maintaining and upgrading the tracks, signals, stations, and other railway assets. They consist of: Infrastructure Cost Charges (ICC), Variable Charges and Stations Charges. These are sub-divided into various fees paid by freight or passenger operators or both. Freight operators have to pay ICC for Freight Services, a Variable Usage Charge (paid by all operators based on the number of trains they run, compensating for wear and tear on the tracks), and those that run electric-powered trains pay Electrification Asset Usage and Traction Electricity Charges. The complexity of all these levies also acts as a deterrent to companies moving their goods by rail.
While TAC are essential for sustaining the rail network, they also represent a significant cost for operators, particularly in the rail freight sector and for OAOs, which do not benefit from government subsidy in the way franchised passenger operators do.
A six-month waive on TAC is a welcome helping hand as the high start-up costs for rail freight flows are a significant disincentive to companies considering the switch from road. Removing the access fees – even just for six months – could make all the difference.
Rail freight is a considerably more sustainable mode of transport than relying on HGVs, offering lower carbon emissions, reduced congestion, and causing less wear on roads – one freight train can replace up to 129 HGV journeys. However, high TAC make rail freight less competitive than road transport. By reducing or removing these charges, the cost advantage of rail freight increases, incentivising more companies to shift their goods from road to rail. This is crucial for meeting the UK’s environmental goals, including reducing greenhouse gas emissions and air pollution.
For rail freight operators, permanently lowering TAC would have a transformative impact on the industry. With lower costs, rail freight companies can offer more competitive rates to customers, attracting more business and increasing the volume of goods transported by rail. This growth will have several positive results:
- Increased rail freight use can significantly reduce carbon emissions, as trains produce up to 76% less CO2 per tonne of freight moved compared to road transport.
- Shifting more freight to rail can alleviate congestion on the UK’s roads, particularly on major motorways and routes leading to ports.
- Rail freight is often more reliable than road transport, particularly for long-distance and bulk goods, contributing to more efficient supply chains and lower overall logistics costs.
- Transporting freight by rail is also more secure, with theft from rail containers rare, given the difficultly for criminals in reaching trucks and unloading trackside.
Track Access Charges are a critical component of the UK’s rail industry, but their impact on rail freight operators cannot be overlooked. By reducing these charges, the government can unlock significant benefits, including promoting a shift from road to rail freight, increasing competition in the passenger market, and supporting economic growth and environmental sustainability. Network Rail has calculated that there are £1.2 billion of productivity gains for businesses using rail freight instead of the roads. Lower TACs represent an investment in the future of Britain’s railways—one that can lead to a cleaner, more efficient, and more competitive transport system.
With more than 90 per cent of goods still moved by road, there is significant market share for the railways to tap into. As the UK continues to prioritise sustainability and connectivity, reducing TACs is a crucial step towards a more dynamic and resilient rail network.
Cheaper Track Access Charges could prevent such decisions as Royal Mail’s to scrap its fleet of mail trains. If you think freight belongs on rail, sign our postcard to Royal Mail urging them to reverse this decision.
