## Freight Customer Event

Manchester, 13 November 2019
"ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future"

Agenda
Welcome/housekeeping
10:30
Dan Brown
Panel session on strategic challenges for the freight industry (60 minutes including audience discussion)
10:35
Coffee (15 mins)
11:35
Network Capacity and timetabling (25 mins)
11:50
Paul McMahon - Network Rail 
Discussion (25 mins) 
12:15
Discussion chaired by Catherine Williams 
Lunch and networking (50 mins)
12:40
Safety (25 mins)
13:30
Paul Appleton 
Discussion (25 mins)
13:55
Discussion chaired by Dan Brown
Competition (20 mins) 
14:15
Tom Cole 
Discussion (20 mins)
14:35
Discussion chaired  by Catherine Williams
Round up and close (5 mins)
14:55
Dan Brown
Dan Brown - ORR Maggie Simpson - RFG
Andy Saunders - Network Rail Discussion chaired by Dan Brown

## Panel Discussion Dan Brown - Orr Maggie Simpson - Rail Freight Group Andy Saunders - Network Rail Catherine Williams - Orr

"ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future"

# Network Capacity And Timetabling

Paul McMahon ORR annual freight customer event
13 November 2019

## Purpose Of Session

•
Summarise the end to end process for track access timetabling
•
Explain how freight fits in to capacity planning
•
Clarify how the processes for ORR 
and Network Rail work
•
Explain how access rights and timetabling relate 
•
Summarise what the industry is doing to improve things

## Some Key Facts

•
Network Rail runs around 25,000 trains each weekday
- 6.4% growth in last two years
- 600+ freight trains typically run each 
weekday (2.5% of total)
- Network Rail employs c400 train 
planners; c150 work in freight (38% of total)

## Timetable Preparation And Publication (Key Activities) Abbreviations

Short notice freight 

## Access Rights And The Timetable

•
Passenger services need rights within their TAC to operate on the network
•
Freight operators can operate with just a timetable offer, prior to rights being approved 
•
TAC rights give an operator higher priority and more 
guarantee of getting the path it wants
•
Network Rail and operators negotiate access rights via its Route Customer teams and Sale of Access Rights process, before applying to ORR
•
ORR makes the final decision (approval or direction)
•
Freight operators tend to apply for rights after new traffic has started running
•
Freight end customers can hold access rights in their own TAC

## What Determines If Operators Can Get Access Rights And Trains Timetabled?

•
Access rights
o
Is there capacity?
o
Are there competing aspirations?
o
What are the performance impacts / mitigations?
o
Other factors
•
Timetable
o
Compliance with process, TPRs, etc
o
Does the timetable bid conflict?
o
Rights priority
o
Decision Criteria
•
Strategic Capacity
•
Dispute mechanisms

## Improvements

•
Earlier approval of access rights
•
Improving capacity planning resources
•
Network Rail's devolution programme 
•
Review and alignment of sale of access rights process in line with Network Rail devolution
•
Definition of available capacity 

## Health And Safety Orr Freight Customer Event

Paul Appleton, HM Deputy Chief Inspector of Railways Patrick Talbot, HM Principal Inspector of Railways
"ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future"

## Overview

■Introduction ■GB Rail Safety Performance
- Key challenges
■Work with FEUs ■Collaboration 

## Introduction ■Hm Deputy Chief Inspector Of Railways

■Responsible for all inspection work at ORR
- Network Rail and contractors - TOCs - Heritage - Light rail and Metros - Freight

## Gb Rail Safety Performance 2018-19 ■Key Headlines

- Britain's railways remain one of the safest in Europe - However… this rate of improvement is slowing - Two workers tragically lost their lives on Britain's railways 

## ■Orr Annual Health And Safety Report Gb Rail Safety Performance 2018-19

■Harm on the mainline to passengers rose–seven of the 13 
passenger fatalities were at platform-train interface
■Underlying SPAD risk has increased since Autumn 2018–Increase 
in the number of SPADs given a "potentially severe" ranking 
■Objects on the line ■Infrastructure operation and signaling errors and irregularities ■Trespass 

## Industry Challenges

■Responding to increased pressure on the system arising from 
disruption across the network, more trains and ageing assets
■Managing the effective introduction of new technology while taking 
human interactions into account 
■Supporting our people who are often the last line of defence in 
preventing a major failure 

## Freight End User Safety

■Management of risks at a key interface- risks can be imported 
from and to the mainline network
■Proactive inspection work focussing on infrastructure maintenance 
at intermodal sites 

## Collaboration

■Legal duty of co-operation 
- ROGS 
■Collaboration amongst duty holders has already resulted in 
considerable improvements in health and safety risk control 
- Cross Industry Freight Derailment Group - National Freight Safety Group 

## Collaboration

■Freight End User Safety Day 
- Organised by Network Rail FNPO - ORR will be attending
■28 November, The Wesley Hotel- London, Euston 
ORR's approach to competition policy in the rail freight industry Freight Customer Event November 2019

## Agenda

■ORR's competition role ■Rotherham Depot
■Siemens/Alstom merger ■Going forwards

## Orr'S Competition Role Orr'S Competition Role

We use competition policy 
(and where necessary our powers) to optimise competitiveness and create conditions for innovation, efficiency and growth

## Our Powers

Enforcement - against:
■Agreements between businesses which restrict or distort 
competition (e.g. price fixing, market sharing, bid rigging)
■Abuse of a dominant position in a market (e.g. customer 
reservation, excessive pricing)
Market studies
■To investigate markets and develop remedies to improve 
competition and outcomes for consumers
Regulatory access powers
■Regulation 34 provides ORR with the power to issue directions to 
correct discrimination against applicants for access to the rail network, market distortion; or undesirable developments in relation to the competitive situation in the rail services markets 

## We Always Seek To Address Issues In The Most Proportionate Way Possible And Are Led By Our Prioritisation Principles When Deciding If/What Power To Use

Rotherham Depot

## Overview

■
We received a complaint from an 
intermodal freight customer threatened with eviction from the Rotherham 'Steel' Depot
■
Importantly it was supported by 
evidence appearing to demonstrate that the depot owner may have been acting to protect its own 'downstream' commercial interests, rather than make best use of/carefully balancing the interests of users of the site

■
Protection of competition in the 
intermodal market has been continuing priority of ORR following its earlier competition investigation 

## Orr'S Actions

■
Undertook a site visit
■
Liaised with all parties involved (customers, freight operating companies, and depot owners
■
Used evidence and data to take 
a view on balancing needs of users of the site
■
By giving a regulatory 'steer' able to ensure an 'access' resolution which balanced needs of users of the site and improved competition in the intermodal market

## Outcome

Siemens/Alstom merger

## What Is Merger Control?

■Market power is a bad thing for customers. It means high prices, cost 
inefficiency, and low product quality/innovation.
■Economic regulation seeks to protect customers in situations where 
significant market power exists.
■Merger control:  prevents situations of market power arising **before** harm 
arises.
■Merger control –CMA in the UK, the European Commission for European 
mergers have powers to block mergers or clear conditional on remedial action.

## Siemens/Alstom

■26 September 2017: Siemens and Alstom announced a "merger 
of equals" to create a "European champion in mobility"
■A combined entity would have 62k employees in 60+ countries, 
with annual revenues in excess of €15bn p.a.

## The Markets And Issues Caused Signalling Rolling Stock

■Used by Network Rail to direct 
traffic.
■Siemens/Alstom collectively 
supply c 93% of the UK 
market.
■The other 7% is reliant on 
Siemens/Alstom technology.
■Siemens, Alstom not the only 
players but are perennial rivals for the largest contracts:
- IEP (2009, £4.5bn)
- Deep tube (2018. £1.5bn) - Thameslink (2011, £1.6bn) - HS2 (forthcoming, £2.75bn)

## Why This Matters

■Increased costs and loss of efficiency brought about by loss of 
competition in Network Rail's key supply chains is ultimately borne by taxpayers and railway users (including freight customers)

## Feb 19: Prohibition

■Only the Commission's 8th prohibition decision in the last decade;
■Decision reflects the seriousness of the Commission's concerns 
and the shortcomings of the Parties' commitments offer.
■The Commission resisted strong political pressure during the 
investigation. France and Germany now pushing for reform?.

## Going Forwards ■If You Experience An Issue Which Could Be Anti-Competitive Contact Us:

http://orr.gov.uk/rail/promoting-competition/how-to-report-a-breach-ofcompetition-law

■Examples of anti-competitive conduct: 
–
Issues with getting access to rail facilities  
–
Price fixing between freight operators
–
Markets being split by geography or customer by freight operators (customer sharing)
–
Exclusivity requirements by freight operators

## Summary And Close

Thank you for joining us today
"ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future"