Yahoo Finance How rail strikes threaten the Christmas dinner
As a lorry driver shortage pushed supply chains to the brink last Christmas, it was the railways that came to the rescue to help Tesco and other big companies get turkeys on tables and toys under the tree.
Britain’s biggest grocer began sending refrigerated goods all the way up the tracks from Tilbury to Scotland each day, while weekly “wine trains” carried millions of bottles to fortify national booze supplies.
But with rolling strikes now crippling the rail network for much of this December, the tables have turned.
Although much of the focus has been on the fallout for passengers from strikes by the Rail, Maritime and Transport workers union (RMT) this Christmas, the implications on rail freight deliveries could not be more serious.
This is because the workers that are downing tools include signalling and engineering staff at Network Rail, the state-owned body that manages the country’s railway tracks and infrastructure.
Without them, swathes of the system simply cannot function, forcing freight train companies to cancel hundreds of services.
Retailers transport most of their food and drink by road rather than rail, according to the British Retail Consortium, meaning the strikes are not expected to threaten food supplies.
But Liam Bogues, a senior policy manager at Rail Partners, which represents freight and passenger rail companies, says trains loaded with food, drink and other goods destined for supermarket shelves will inevitably be among those caught up in the chaos, leading to possible delays.
“You’re looking at food, drink and other perishable items, clothing, toys, electronics - lots of stuff that people will be ordering online and looking out for on the shelves this Christmas,” explains Bogues.
John Smith, chief executive of GB Railfreight, one of Britain's biggest operators fears the worst.
“The rail strikes have already been putting undue pressure on the supply of consumer goods and the latest proposed dates will mean access to much of the network is restricted," he says.
"This comes when the demand for consumer goods – from pigs in blankets to presents for under the tree – peaks around the festive period.
"The strikes will mean that every week up to 10,000 containers worth of goods, due to be transported by rail, may be driven onto our increasingly busy roads or forced to wait at a shipping terminal. As a result, we could see stock shortages into the new year if a resolution is not reached.
“Even though we may still get our Christmas turkey the outlook doesn’t look as promising for our New Year’s fireworks.”
At the moment as many as 3,500 freight services are running every week, but that number is likely to be cut in half by industrial action, according to Rail Partners.
On the day of the strikes themselves, services are expected to drop by as much as 70pc - from an average of 500 to fewer than 200.
The nature of rail freight also means that days before and after disruption tend to be affected as well, leading to further mayhem.
Bogues says of strikes next week: “We expect to see real disruption. Quite what that looks like, it's difficult to say in advance, but the overall picture is pretty bleak.
“There will be consumers who have ordered online and are expecting gifts to arrive - who's to say what disruption they'll face? But I can't see that not being something consumers notice.”
Most rail freight in the UK is transported by four companies: Direct Rail Services (DRS), Freightliner, GB Railfreight and DB Cargo.
A spokesman for DRS, which counts Tesco among its customers, said on Thursday that strikes have forced it to cancel or amend three quarters of services that were scheduled for next week.
While it would normally run 124 trains, 51 have been called off and 43 amended. Only 30 will run as normal.
“We are working with our customers to mitigate the impact of industrial action and keep any potential disruption to an absolute minimum,” a spokesman for the company adds.
It is in stark contrast to a year ago, when rail freight was being championed by DRS and Tesco as a way to overcome supply chain chaos.
With a chronic shortage of lorry drivers driving up fees and competition for deliveries, DRS teamed up with the Big Four grocer to run long trains of refrigerated containers carrying hundreds of fresh food items, including Brussels sprouts, parsnips, carrots, onions, oranges and lemons.
The twice-daily services, which run from Tilbury to Coatbridge, in Scotland, were hailed as a huge success story that also took 17,000 containers off the roads per year - shrinking the supermarket’s carbon footprint.
Senior figures in the industry fear the continuing spectre of strikes is damaging the rail freight industry’s image and pushing customers back towards lorries.
Phil Smart, policy manager at the Rail Freight Group, says the sector has been caught in the crossfire in a row that is really between unions, passenger rail operators and the Government.
“Rail freight companies are not in dispute with the unions, because they have already settled,” he explains, “but they are still a victim of this.”
Even though they are run separately, freight trains are scheduled around passenger services and still rely on infrastructure operated by Network Rail. As a result, their route plans - known as “signal paths” - are fiendishly complicated and freight journeys tend to take far longer than passenger ones.
Smart says cargo trains are often held up at busy junctions or held in sidings, and can take days to travel between destinations.
“When you have strikes, it doesn’t just affect that day but those on either side of it as well, so it can be quite devastating,” he adds.
“Companies can try to get around it by running extra services beforehand, but of course there is only finite capacity on the network to do that.”
In response to strike action, Tesco is understood to be putting back-up plans in place. A spokesman would not comment on what this will involve.
Experts expect the answer will be many more lorries, as retailers switch deliveries back from rail to road. Tailbacks on the roads are almost inevitable as more people get into their cars to get to work and family, meaning trucks may not be much more reliable than trains.
The bleak outlook means industrial action could be felt around the Christmas table this year as food, presents and other supplies face delays and disruption.
