End of line for trains as Royal Mail drops rail

The Royal Mail has announced that it is the end of the line for the mail train as it unveiled plans to put in place a more efficient and flexible UK-wide distribution network by road and air.

Although the original plans included rail, this has been dropped after Royal Mail failed to reach agreement with rail freight supplier EWS, despite “protracted negotiations”, because the cost was too high. Royal Mail concluded that it has no alternative but to move forward with a structure based on a road and air network.

Royal Mail’s Managing Director, Logistics, Paul Bateson, said: “There is a marked difference between the price we believe we should be paying for rail services and that which was on the table. Quite simply, other forms of transport can give us the same benefits, in terms of flexibility and quality, but at a lower cost.

“We are disappointed that, after two years of discussions with EWS, we have been unable to make any headway. But we cannot negotiate any longer. We need to move ahead and create a new distribution network which is more robust and has greater flexibility to improve quality of service as well as one which is more cost-effective than we have now.”

Royal Mail has advised EWS of its plans to cancel train services by March 2004.

EWS warned that the move would not only increase road congestion, but also threaten 500 jobs on the rail network. EWS, which currently handles around a quarter of the first-class mail, said that this volume would add 160,000 lorry journeys, covering 30.5 million miles per annum, to Britain’s roads.

The rail company said that 99.9% of all trains had run over the past 17 months, and Royal Mail train punctuality was 93.5% against a 95% target.

Allen Johnson, EWS Chief Operating Officer, said: "We are shocked that Royal Mail is threatening to walk away from the railway. EWS has made numerous competitive price offers in response to changing specifications from Royal Mail. EWS will continue to press the many benefits of rail to Royal Mail as an integral part of the mail distribution solution."

EWS has had discussions with a number of companies who are exploring mail liberalisation. These discussions have focused on providing a rail-based network for mail distribution, as the companies concerned recognise the problems with increasing road congestion affecting the reliability of a road-based network of operations.

Work on a new £40 million National Distribution Hub in the Midlands, which underpins the network, is underway and the phased opening will begin later this year.

The Royal Mail expect annual cost savings in the region of £90 million and a reduced impact on the environment through more efficient use of road vehicles.

(SP)