Release Date: 01 February 2007
Release ID: 1194
The closure of Belgian company Unilog on Wednesday due to reported 24% increase in traction rates on their intermodal services between Muizen (Belgium) and Daventry/Manchester, along with the reported cessation of the GTS intermodal service from Bari in Italy to the UK, leaves just three to four rail freight services through the Channel Tunnel each day.
Unilog’s letter to its customers (see below) indicates that it has done all it can to increase the efficiency of its train services, and customers have for many years praised the dedication of their staff to providing a competitive and reliable cross-Channel intermodal service.
However, faced with a total rate increase from the traction providers of 24% in two months, they felt that could not pass these on to customers and hope to retain business in a highly competitive cross-Channel freight market.
RFG Chairman Tony Berkeley commented ‘this confirms our view that the arrangements made by the UK Government to ensure the continuation of services from the end of November 2007, welcome though they were, are no more than sticking plaster to cover a widening gap between the increasingly unrealistic aspirations of some of the current operators and infrastructure managers, and the market for cross-Channel freight services - by ferry or shuttle through the Channel Tunnel.
Eurotunnel’s Network Statement demonstrates their thinking that, if you increase charges, you will increase revenue. These latest service closures clearly demonstrate the opposite - that the current charges are totally unsustainable (even with the payments from the Department for Transport) and that the only solutions are to:
- price the infrastructure at rates that the market can bear (as the European Directives require)
- bring in competition above Rail
‘The Department for Transport set the competition issue in motion in December 2006; they and the French Government, acting as the Inter- Governmental Commission, must now take urgent action to ensure compliance with the regulations on infrastructure charging and in ensuring the removal of technical barriers to competitive service through the Tunnel.
‘I met DG TREN officials on Wednesday 24th January, and urged them also to put the maximum pressure on the parties to comply with the Directives on open access.
Tony Berkeley concluded:
‘At a time when there are 10,000 cross-Channel trucks a day running on the parallel M20, this must be the economics of the madhouse. These trucks would fill 200 trains a day, and there is capacity now for these through the Channel Tunnel and on the rail network.’
In the course of 2006 Unilog was confronted with a huge price increase for the rail haulage between Muizen and Daventry & Manchester via our daily shuttle services through the Channel Tunnel from December 2006 onwards. Unilog was, with the cooperation of the railway traction providers, able to adapt its production model by increasing the capacity of the train to 1790 tonnes trailing weight, which means that 19 twin wagons per train or 38 slots are available. Nonetheless Unilog had to introduce substantial rate adjustments in the hope of realising a break even result.
Having just digested the rate increase from the Railways in December 2006, Unilog has again been advised upwardly revised conditions. New surcharges have increased the traction costs even further, bringing Unilog in a severe loss making situation. Intensive discussions and meetings with all concerned could not be positively concluded.
The Board of Directors discussed the situation on Wednesday 24 January, and was obliged to note that the current business model of the company is not viable and that a new price increase for our customers was not a feasible option. Faced with the new situation, and seeing no alternatives in the near future, it was decided to halt all activities as soon as deemed appropriate.
With regret, we formally advise you that Unilog will halt the train service with effect from 2 February. The last scheduled train to/from the UK will be on Friday 2 February.
On a personal note, we wish to thank all our customers for the trust placed in our services since May 1994.
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